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West v. Umialik Insurance Company (9/29/00) sp-5317

     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.



             THE SUPREME COURT OF THE STATE OF ALASKA
                                 


JAMES and JANE WEST,          )
                              )    Supreme Court No. S-9070
             Appellants,      )
                              )    Superior Court No.
     v.                       )    4FA-97-02518 CI
                              )
UMIALIK INSURANCE COMPANY,    )    O P I N I O N
                              )
             Appellee.        )    [No. 5317 - September 29, 2000] 
______________________________)



          Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
                    Richard D. Savell, Judge.


          Appearances:  Thomas R. Manniello, Borgeson &
Burns, PC, Fairbanks, for Appellants.  Michael A. Budzinski, Alex
K.M. Vasauskas, Stone, Jenicek & Budzinski, Anchorage, for
Appellee.


          Before:   Matthews, Chief Justice, Eastaugh,
          Fabe, Bryner, and Carpeneti, Justices.  


          MATTHEWS, Chief Justice.      


I.   INTRODUCTION
          This case involves coverage under a homeowners insurance
policy for damage caused by the settling of a house when soil under
the foundation was washed away by water from broken plumbing.  The
superior court entered summary judgment in favor of the insurer,
applying policy exclusions for loss caused by settling, earth
movement, and water damage.  Because the listed exclusions only
apply to external or natural phenomena such that the damage does
not fall within the exclusions, we reverse and direct the superior
court to enter summary judgment in favor of the homeowners.
II.  FACTS AND PROCEEDINGS
          This case concerns a dispute whether damage to the
Fairbanks house owned by James and Jane West is covered under the
their homeowners insurance policy.  The facts are uncontested and
set out in the parties' Stipulation of Facts.  The Wests' house was
insured under a homeowners insurance policy issued by Umialik
Insurance Company.  The water source for the house is a well.  The
pump for the well is located next to the house in an insulated
chamber buried four or five feet below ground.  The chamber is
connected to the house's basement by a water pipe which runs
through an insulated causeway.  Ordinarily, heat from the basement
also heats the causeway and prevents the system from freezing.
          In late 1995 or early 1996 the temperature in the
basement dropped below freezing, causing the pipe to break at the
well pump and allowing water to gush out of the pump into the
ground.  The water infused the ground beneath the house's
foundations.  The Wests repaired the pipe.  At the time, the house
did not appear damaged.
          But the northeast corner of the house later settled about
three feet as a result of the leak.  The parties agree that "[t]he
water from the frozen broken water line had seeped under the house
and undermined the dwelling's foundation, causing the settling of
the house."  Although the house was not breaking apart or
collapsing, the house was racking, i.e., twisting, which caused
sheetrock cracks, gaps in the ceiling and floor, uneven flooring,
and doors that were out of plumb.  In order to correct the problem,
"a new basement foundation system would have to be built and the
upper structure moved onto it" or "a two-story house above ground
could be built on a different type of foundation to provide
equivalent living space."
          The relevant provisions of the Wests' homeowners
insurance policy are set forth in the margin. [Fn. 1]  The policy
is an "all risks" policy.  In contrast to a "specific designation
of risks" policy, which provides coverage only for enumerated
perils, an "all risks" policy provides coverage for all perils not
specifically excluded by the policy language. [Fn. 2]
          The Wests reported this loss to Umialik, which denied
coverage.  In denying coverage, Umialik relied on the exclusion for
settling contained in paragraph 2.e(6) of the Perils Insured
Against clause.  Umialik also relied on paragraphs 1(b) and (c) of
the Exclusions clause, which exclude earth movement and water
damage "regardless of any other cause or event contributing
concurrently or in any sequence to the loss."
          The policy also specifically excludes coverage for
freezing or the discharge from plumbing which has burst because of
freezing.  But because this exclusion does not apply when the home
is occupied, the parties agree that this exclusion does not apply. 
          On December 5, 1997, the Wests filed this action in
superior court, seeking damages and a declaration that the damage
was covered under the policy.  The parties stipulated as to the
facts and filed cross-motions for summary judgment.  The court
concluded that Umialik had properly denied the claim and entered
summary judgment in favor of Umialik.  The Wests appeal.
III. STANDARD OF REVIEW
          This court reviews an order of summary judgment de novo.
[Fn. 3]  Summary judgment is appropriate where "there is no genuine
issue as to any material fact and . . . any party is entitled to
judgment as a matter of law." [Fn. 4]  Normally, we will construe
all facts in favor of the non-moving party. [Fn. 5]  Here, the
parties agree on the material facts, and each seeks judgment as a
matter of law.  Therefore, we need only determine which party is
entitled to judgment as a matter of law.  In reviewing questions of
law, this court exercises its independent judgment and adopts the
rule of law that is most persuasive in light of precedent, reason,
and policy. [Fn. 6]
IV.  DISCUSSION
          Umialik denied the Wests coverage under exclusions for
settling, earth movement, and water damage.  The Wests contend that
they reasonably expected the policy to cover this loss.
     A.   The Doctrine of Reasonable Expectations
          Alaska has adopted the doctrine of reasonable
expectations.  We have held that "[t]he obligations of insurers are
generally determined by the terms of their policies." [Fn. 7]  But
because insurance policies are contracts of adhesion, they are
construed according to the principle of "reasonable expectations."
[Fn. 8]  Under the reasonable expectations doctrine, "[t]he
objectively reasonable expectations of applicants . . . regarding
the terms of insurance contracts will be honored even though
painstaking study of the policy provisions would have negated those
expectations." [Fn. 9]
          It is a settled principle that ambiguities in an
insurance policy are construed in favor of the insured. [Fn. 10] 
The court need not find the policy ambiguous, however, to construe
it under the reasonable expectations doctrine. [Fn. 11]  To
determine the parties' reasonable expectations, the court examines
(1) the language of the disputed policy provisions; (2) the
language of other provisions in the same policy; (3) extrinsic
evidence; and (4) case law interpreting similar provisions. [Fn.
12] 
     B.   The Exclusion for Settling Does Not Apply.
          Umialik denied coverage to the Wests under the exclusion
for loss caused by settling.  The Wests argue that a reasonable
person could understand "settling" to refer exclusively to settling
caused by natural phenomena.  Umialik contends the term plainly
excludes a sinking of the land by any means.  The term is not
defined in the policy.  We agree with the Wests that the settling
exclusion does not preclude coverage for their loss.
          1.   The language of the disputed policy provision
          The reasonable expectations doctrine directs the court to
look first at the language of the disputed policy provision.  The
policy does not insure "for loss . . . [c]aused by . . .
[s]ettling, shrinking, bulging or expansion, including resultant
cracking, of pavements, patios, foundations, walls, floors, roofs
or ceilings."  The parties agree that, descriptively speaking, the
house "settled."  As both the superior court and Umialik note, the
Stipulation of Facts provides that, because of the water, "the home
had settled about three feet."  However, this is not dispositive. 
That the Wests describe the loss in terms of "settling" does not
mean that settling was the cause of the damage. [Fn. 13]
          2.   Other policy provisions
          To determine the insureds' reasonable expectations, we
also look to other provisions of the policy.  Paragraph 2.e of the
Umialik policy lists eight separate exclusions including the
settling exclusion and an exclusion for "wear and tear, marring,
deterioration."  In Winters v. Charter Oak Fire Insurance Co., [Fn.
14] the court ruled that "settling" is akin to normal wear and tear
where the policy lists "settling" under a general heading of "wear
and tear."  Umialik distinguishes the case, arguing that the
present policy is different because it separates "wear and tear"
(paragraph 2.e(1)) from "settling" (paragraph 2.e(6)).  This
distinction is unpersuasive.  The policy groups both "wear and
tear," "settling," and six other clauses into paragraph 2.e,
indicating that the eight clauses are somehow related, while
paragraphs 2.a though 2.d list four unrelated provisions for
denying coverage.
          Indeed, Winters supports the view that grouping these
clauses together leads a reasonable insured to infer a
relationship.  Winters cites with approval Holy Angels Academy v.
Hartford Insurance Group for the proposition that 
          it is not unreasonable for an ordinary
individual . . . to conclude that the policy language "settling,
cracking" contained in a paragraph beginning, "Loss caused by: wear
and tear . . ." was limited in meaning to the gradual sinking of a
building from the yielding of the ground under its foundation or by
the natural constriction and expansion of its construction
materials.[ [Fn. 15]]

In Holy Angels Academy, the Hartford policy was almost identical to
the Umialik policy.  Like the Umialik policy, the Hartford policy
grouped a number of seemingly related exclusions, separated by
semicolons, into one paragraph. [Fn. 16]  All the policy exclusions
in this paragraph entail natural or environmental concerns.  The
Umialik policy only differs in that each semicoloned exclusion is
preceded by a number (one through eight).  Therefore, as in Holy
Angels Academy, it would be reasonable for the Wests to understand
settling, when included in a paragraph that begins with "wear and
tear," as "the gradual sinking of a building from the yielding of
the ground under its foundation or by the natural constriction and
expansion of its construction materials." [Fn. 17]
          One additional policy provision is relevant to the Wests'
claim.  Under paragraph 2.a, the policy excludes coverage for loss
caused by plumbing which has frozen and burst if the home is
unoccupied (subject to exceptions not relevant here).  The parties
agree that this exclusion does not apply because the home was
occupied.  But in light of this exclusion, damage caused by burst
pipes because of freezing is more than just one of numerous perils
covered under the all-risks policy.  Rather, a reasonable
individual would understand that losses so caused are covered
except where the house is not occupied.  In other words, regardless
of the settling exclusion, the policy implies coverage for the
damage caused by water discharged from pipes which are ruptured by
freezing.  
          3.   Extrinsic evidence
          The parties do not point to any extrinsic evidence, such
as representations made to the homeowners.  Therefore, we disregard
this element of the reasonable expectations test.
          4.   Case law examining similar provisions
          Finally, we look to case law examining similar
provisions.  Although this court has not had occasion to interpret
the word "settling," various other jurisdictions have explained its
meaning.  Souza v. Corvick [Fn. 18] and Winters v. Charter Oak Fire
Insurance Co. [Fn. 19] are the most persuasive in this regard.
          Souza stands for the proposition that settling involves
the condition of the ground. [Fn. 20]  After the insured presented
evidence that her house had settled due to explosions, the trial
court in Souza granted the insurer a directed verdict, based on the
policy exclusion for settling. [Fn. 21]  The appellate court
reversed, finding that "'settling' should be interpreted to mean
the gradual subsidence of a structure resulting from the condition
of the ground." [Fn. 22]  The court concluded, "since it certainly
can be inferred that the subsidence involved here resulted from
something other than the condition of the ground, we cannot say as
a matter of law that the damage to [the insured's property] was
excluded from the coverage of her policy." [Fn. 23]
          The facts of Winters are even more akin to the case at
hand.  In Winters, the parties stipulated that "a water line broke
in plaintiffs' clubhouse which caused soaking and subsequent
shifting of the soil beneath the building, leading to structural
damage." [Fn. 24]  The court denied the insurer's motion for
summary judgment based on an exclusion for "settling," holding that
the term "has generally been taken to mean a gradual, natural
process that every building endures. When the settling occurs from
an accidental cause and happens abruptly and unexpectedly, that is
not the sort of 'settling' to which the policy language refers."
[Fn. 25]
          Other authorities that have addressed the issue concur. 
One commentator defines "settling" or "subsidence" in a policy
exclusion to occur "when the soil compacts downward vertically over
time." [Fn. 26]  The Ninth Circuit, applying California law, has
characterized the conclusion slightly differently, focusing on the
unanticipated versus the inevitable: 
          [A]n all physical loss home policy excluding
coverage for damage sustained as a result of 'settling,' would not
cover damage sustained due to a house settling into the soil
thereunder unless the immediate cause of the settling is an
unanticipated event or casualty rather than an inevitable
occurrence.[ [Fn. 27]]
Similarly, in Hartford Accident & Indemnity Co. v. Phelps, the home
suffered damage from a leaking underground pipe. [Fn. 28]  When the
water was "pumped from beneath the house in repairing it, the house
settled causing additional damage." [Fn. 29]  The Florida District
Court of Appeal was of the "view that the exception as to settling,
cracking, etc., is not applicable to the factual situation in this
case." [Fn. 30]  Elsewhere, a New York trial court, contrasting
settling with collapse, held that, "[a]s applied to houses,
settling has a . . . connotation . . . of a building initially
coming to rest after construction." [Fn. 31]  All of these
definitions indicate that "settling" does not preclude coverage
where water from a frozen pipe seeps under the house.
          For its broad interpretation of the term "settling,"
Umialik relies on this court's interpretation of the term "earth
movement" in State Farm Fire & Casualty Co. v. Bongen, which
rejected the "man-made" versus "natural" dichotomy. [Fn. 32] 
Bongen, however, has no applicability to the settling language in
the present policy.  In Bongen, the earth movement exclusion was
preceded by a lead-in clause precluding coverage for earth movement
loss "regardless of the cause." [Fn. 33]  Furthermore, the lead-in
clause specifically excluded earth movement caused by both
"natural" and "external" forces. [Fn. 34]  Indeed, Bongen
acknowledges that, "[u]ntil insurance companies added the lead-in
clause, courts often limited the earth movement exclusion to
natural disasters." [Fn. 35]  Therefore, since the settling
exclusion in the Umialik policy is not preceded by a similar lead-
in clause, Bongen does not support Umialik's position.
     C.   The Exclusions for Earth Movement and Water Damage Do Not
Apply.
     
          Umialik also denied coverage on the basis of the
exclusions for earth movement and water damage. [Fn. 36]  Again,
the Wests contend that, under the doctrine of reasonable
expectations, a reasonable insured could understand these
provisions to exclude only loss caused by natural phenomena.  The
superior court rejected the distinction between natural and man-
made phenomenon and applied the exclusions to preclude coverage. 
For the reasons described below, we hold that they do not apply.

          1.   The language of the disputed policy provision
          The Wests contend that the policy language limits both
exclusions to natural occurrences.  Pursuant to the doctrine of
ejusdem generis, a general term, when followed by specific terms,
will be interpreted in light of the characteristics of the specific
terms, absent clear indication to the contrary. [Fn. 37]  The Wests
argue that the doctrine applies to both "earth movement" and "water
damage."  Both of these general terms are defined by specific terms
that are naturally occurring in character.  It follows, they argue,
that both general terms should be limited to similar natural
occurrences.
          Umialik responds that the specific terms following earth
movement include man-made occurrences.  The exclusion specifically
refers to earthquake, landslide, mine subsidence, mudflow, and
earth sinking, rising or shifting.  Umialik argues that mudflows,
landslides, and mudslides can be man-made, citing Bongen as an
example.  Umialik also adds that mine subsidence "further
communicates that human processes or 'extrinsic' causes of earth
movement were contemplated to be within the exclusion" since
"[m]ines are man made, and . . . the subsidence of earth over them
therefore arises from human action."
          Umialik's argument shows that the Wests have too narrowly
characterized the qualities of the specific defining terms as
"natural" occurrences.  Instead, the terms might better be
described as referring to natural or external occurrences.  As in
Bongen, mudslides can be natural or man-made, but they are caused
by forces external to the insured property.  Similarly, like other
forms of earth movement and settling, landslides and mine
subsidence result from conditions external to and apart from the
insured's home.  Exclusions for those events do not suggest that,
where a leaking pipe on the premises washes away soil, the
resulting damage will be excluded.
          With respect to water damage, Umialik contends that
ejusdem generis should not apply to the phrase "water below the
surface of the ground" because the specific terms are preceded by
the word "including" which, unlike the word "meaning," is
expansive, not limiting.  This argument is not convincing.  A
general term linked to specific terms with the word "including" may
be interpreted under the ejusdem generis principle. [Fn. 38]  
          The water damage exclusion describes water exerting
pressure, seeping through, or leaking through the building,
sidewalk, driveway, foundation, swimming pool, or other structure.
An individual could reasonably interpret this as water from a
natural or external source seeping through the structure.  The
language does not describe the damage incurred by the Wests.
          2.   Other policy provisions
          As discussed above, the policy provision excluding
coverage for freezing pipes when the home is unoccupied sheds light
on the Wests' reasonable expectations.
          Several other provisions are also relevant.  First, under
the Perils Insured Against caption, paragraph 2, after listing
several exclusions, provides, "If any of these [excluded forces]
cause water damage not otherwise excluded . . . we cover loss
caused by the water . . . ."  (Emphasis added.)  Although Umialik
correctly points out that the language is an "exception to an
exception" that "does not even come into play unless an exception
initially applies," the provision is nonetheless revealing: by
providing for "water damage not otherwise excluded," the policy
necessarily connotes that some water damage is covered. 
          Also of relevance are other provisions excluding water
damage.  In addition to precluding coverage for "water below the
surface of the ground," the water damage provision encompasses 
          (1)  Flood, surface water, waves, tidal water
overflow of a body of water, or spray from any of these, whether or
not driven by wind;
          (2)  Water which backs up through sewers
or drains or which overflows from a sump . . . .

Both of these definitions also involve perils unlike damage from
burst pipes of a home water system, for they ordinarily entail
water from external sources.  The contrast would reasonably tend to
lead the Wests to believe that their loss would be covered.
          Although the parties discuss the lead-in clause
extensively, we find it to be irrelevant.  Under this clause, loss
caused by earth movement or water damage is excluded "regardless of
any other cause or event contributing concurrently or in any
sequence to the loss."  But this lead-in clause is not significant
unless the peril suffered by the Wests falls within the meaning of
excluded earth movement or water damage in the first place. [Fn.
39]
          3.   Extrinsic evidence
          Again, the parties do not point to any relevant extrinsic
evidence relating to the exclusions for earth movement and water
damage.
          4.   Case law interpreting similar provisions
          Umialik relies heavily on our decision in State Farm Fire
& Casualty Co. v. Bongen. [Fn. 40]  In Bongen, the clear-cutting of
a right-of-way for the installation of transmission lines caused
mudslides, which damaged the plaintiffs' home. [Fn. 41]  This court
relied on an exclusion for earth movement to deny coverage under
the all risks homeowners insurance policy. [Fn. 42]  The court
found that the earth movement provisions were not ambiguous and
refused to limit this exclusion to strictly natural phenomena. [Fn.
43]
          But the peril suffered by the Wests is different.  As
discussed above, the water which damaged the Wests' home did not
come from an external source, but from the insured improvements on
the property. [Fn. 44]  Although the earth movement exclusion is
not necessarily limited to strictly natural events, it does not
include perils that originate from insured improvements.
          Furthermore, the State Farm policy in Bongen specifically
excluded earth movement "whether combined with water or not." [Fn.
45]  This provision is absent from the Umialik policy.
          We have reviewed other cases, including those cited by
Umialik, that have interpreted an earth movement exclusion broadly
to exclude perils similar to that suffered by the Wests. [Fn. 46] 
But all of these cases involved a State Farm policy similar to that
in Bongen explicitly excluding earth movement "whether combined
with water or not." [Fn. 47]  Thus, these other courts relied on
language missing from the present policy.  Additionally, the
interpretation of insurance contracts in Alaska differs from the
interpretation of insurance contracts in those jurisdictions
interpreting "earth movement" broadly: these courts require a
finding of ambiguity before applying the doctrine of reasonable
expectations. [Fn. 48]  We do not require such a finding. [Fn. 49]
          On the other hand, cases interpreting earth movement
exclusions that do not contain the "whether combined with water or
not" language have found coverage for damage caused by bursting
pipes.  At least two courts have distinguished the "whether
combined with water or not" language. [Fn. 50]  Also these cases
construe the earth movement exclusion to be limited to naturally
occurring events. [Fn. 51]
          With respect to water damage, we note that numerous
authorities discussing a water damage exclusion similar to the
present one have limited the water damage exclusion to natural
phenomena.  Couch on Insurance notes that "[t]he exclusion of water
below the surface has been held to apply only to natural flooding,
as opposed to flooding by water emanating from artificial means."
[Fn. 52]  For example, Couch finds "authority to the effect that
the exclusion does not encompass loss from subsurface water present
from a leak in the plumbing system." [Fn. 53]  New York cases
interpreting similar water damage exclusions have distinguished
between natural and non-natural forces. [Fn. 54]  In another case
construing a similar exclusion, the court recognized that "the
majority of the states . . . construe the underground water
exclusion as water of natural origin." [Fn. 55]  Umialik does not
point to any cases excluding coverage for water damage that
originated from the homeowners' property improvements. [Fn. 56]  
          Therefore, we hold that the exclusions for earth movement
and water damage do not preclude coverage in this case.
V.   CONCLUSION
          Because the insurance policy exclusions relating to
settling, earth movement, and water damage can reasonably be
interpreted to be limited to naturally occurring phenomena or
perils external to the insured property, we REVERSE the superior
court's judgment and direct the superior court to enter summary
judgment in favor of the Wests.


                            FOOTNOTES


Footnote 1:

          The Insurance Policy provides in relevant part, as
follows:
                    SECTION I - PERILS INSURED AGAINST
                    COVERAGE A - DWELLING and COVERAGE B - OTHER
                    STRUCTURES
                    We insure against risk of direct loss to
                    property . . . .  We do not insure, however,
                    for loss
                         . . . .
                    2.   Caused by:
                         a.   Freezing of a plumbing, heating, air
                    conditioning or automatic fire protective
                    sprinkler system or of a household appliance,
                    or by discharge, leakage or overflow from
                    within the system or appliance caused by
                    freezing.  This exclusion applies only while
                    the dwelling is vacant, unoccupied or being
                    constructed . . . .
                         . . . .
                         e.   Any of the following:
                              (1)  Wear and tear, marring,
                    deterioration;
                              (2)  Inherent vice, latent defect,
                    mechanical breakdown;
                              (3)  Smog, rust or other corrosion,
                    mold, wet or dry rot;
                              (4)  Smoke from agricultural
                    smudging or industrial operations;
                              (5)  Discharge, dispersal, seepage,
                    migration, release or escape of pollutants
                    . . . .
                              (6)  Settling, shrinking, bulging or
                    expansion, including resultant cracking, of
                    pavements, patios, foundations, walls, floors,
                    roofs or ceilings;
                              (7)  Birds, vermin, rodents, or
                    insects; or
                              (8)  Animals owned or kept by an
                    "insured."
                              If any of these cause water damage
                    not otherwise excluded . . . we cover loss
                    caused by the water . . . .
                         . . . .
                                SECTION I - EXCLUSIONS
                    1.   We do not insure for loss caused directly
                    or indirectly by any of the following.  Such
                    loss is excluded regardless of any other cause
                    or event contributing concurrently or in any
                    sequence to the loss.
                         . . . .
                                        b.   Earth Movement, meaning
                    earthquake including land shock waves or
                    tremors before, during or after a volcanic
                    eruption; landslide; mine subsidence; mudflow;
                    earth sinking, rising or shifting . . . .
                         . . . .
                         c.   Water Damage, meaning:
                              (1)  Flood, surface water, waves,
                    tidal water overflow of a body of water, or
                    spray from any of these, whether or not driven
                    by wind;
                              (2)  Water which backs up through
                    sewers or drains or which overflows from a
                    sump; or 
                              (3)  Water below the surface of the
                    ground, including water which exerts pressure
                    on or seeps or leaks through a building,
                    sidewalk, driveway, foundation, swimming pool
                    or other structure.
                    
                    
                    
                    Footnote 2:
                    
                         See Kenneth H. York et al., Cases,
                    Materials and Problems on General Practice
                    Insurance Law 229-30 (3d ed. 1994).
                    
                    
                    Footnote 3:
                    
                                        See Department of Health & Soc.
                    Servs. v. Alaska State Hosp. & Nursing Home
                    Ass'n, 856 P.2d 755, 759-60 (Alaska 1993).
                    
                    
                    Footnote 4:
                    
                         Alaska R. Civ. P. 56(c).
                    
                    
                    Footnote 5:
                    
                                        See State v. Alaska Civil Liberties
                    Union, 978 P.2d 597, 603 (Alaska 1999), cert.denied,
                     __ U.S. __, 120 S. Ct. 1156 (2000).
                    
                    
                    Footnote 6:
                    
                                        See Guin v. Ha, 591 P.2d 1281, 1284
                    n.6 (Alaska 1979).
                    
                    
                    Footnote 7:
                    
                                        Bering Strait Sch. Dist. v. RLI Ins.
                    Co., 873 P.2d 1292, 1294 (Alaska 1994).
                    
                    
                    Footnote 8:
                    
                                        See id.; State v. Underwriters at
                    Lloyds, London, 755 P.2d 396, 400 (Alaska
                    1988).
                    
                    
                    Footnote 9:
                    
                                        Underwriters at Lloyds, 755 P.2d at
                    400 (quoting Robert E. Keeton, Basic Text on
                    Insurance Law sec. 6.3(a), at 351 (1971)).
                    
                    
                    Footnote 10:
                    
                                        See, e.g., Grace v. Insurance Co. of
                    N. Am., 944 P.2d 460, 467 n.15 (Alaska 1997);
                    U.S. Fire Ins. Co. v. Colver, 600 P.2d 1, 3
                    (Alaska 1979).
                    
                    
                    Footnote 11:
                    
                         See Bering Strait, 873 P.2d at 1295.
                    
                    
                    Footnote 12:
                    
                                        See id.  
                    
                    
                    Footnote 13:
                    
                                        Cf. Souza v. Corvick, 441 F.2d 1013,
                    1020-21 (D.C. Cir. 1970) (holding that damage
                    to realty was not excluded from coverage if
                    such damage resulted from subsidence caused by
                    something other than soil condition despite
                    homeowners' expert's description of the damage
                    as "settling").
                    
                    
                    Footnote 14:
                    
                         4 F. Supp. 2d 1288, 1296 (D.N.M. 1998).
                    
                    
                    Footnote 15:
                    
                                        Id. at 1295 (citing with approval
                    Holy Angels Academy v. Hartford Ins. Group,
                    487 N.Y.S.2d 1005, 1007 (N.Y. Sup. 1985)
                    (alterations in original)).
                    
                    
                    Footnote 16:
                    
                                        The Umialik policy is set out in
                    note 1, supra.  Compare SECTION I -- PERILS
                    INSURED AGAINST, paragraph 2(e)(1) - (6) with
                    the Hartford policy, which provides in
                    relevant part as follows:
                    
                                        This policy does not
                    insure under this form against . . . 
                              E. Loss caused by: 
                                        1.   Wear and tear,
                    deterioration, rust or corrosion, mold, wet or
                    dry rot; inherent or latent defect; smog,
                    vapor or gas from agricultural or industrial
                    operations; mechanical breakdown, including
                    rupture or bursting caused by centrifugal
                    force; settling, cracking, shrinkage, bulging
                    or expansion of pavements, foundations, walls,
                    floors, roofs and ceilings; animals, birds,
                    vermin, termites or other insects; unless loss
                    by a peril not otherwise excluded ensues and
                    then the Company shall be liable for only such
                    ensuing loss.
                    
                    487 N.Y.S.2d at 1006 (emphasis added).
                    
                    
                    Footnote 17:
                    
                         Holy Angels Academy, 487 N.Y.S.2d at
                    1007.
                    
                    
                    Footnote 18:
                    
                         441 F.2d 1013 (D.C. Cir. 1970).
                    
                    
                    Footnote 19:
                    
                         4 F. Supp. 2d 1288 (D.N.M. 1998).
                    
                    
                    Footnote 20:
                    
                         441 F.2d at 1021.
                    
                    
                    Footnote 21:
                    
                         Id. 
                    
                    
                    Footnote 22:
                    
                         Id.
                    
                    
                    Footnote 23:
                    
                         Id. at 1022.
                    
                    
                    Footnote 24:
                    
                         4 F. Supp. 2d at 1290.
                    
                    
                    Footnote 25:
                    
                         Id. at 1295.
                    
                    
                    Footnote 26:
                    
                         11 Couch on Insurance sec. 153:79 (3d ed.
                    1998).
                    
                    
                    Footnote 27:
                    
                                        New Zealand Ins. Co. v. Lenoff, 315
                    F.2d 95, 96 (9th Cir. 1963) (emphasis added)
                    (citing Sabella v. Wisler, 377 P.2d 889 (Cal.
                    1963)).  The disputed New Zealand policy
                    provision was similar to the Hartford
                    provision set forth in note 16, supra.  Seeid. at 95 n.1.
                    
                    
                    Footnote 28:
                    
                         294 So. 2d 362, 363 (Fla. App. 1974).
                    
                    
                    Footnote 29:
                    
                         Id.
                    
                    
                    Footnote 30:
                    
                         Id. at 364.
                    
                    
                    Footnote 31:
                    
                                        Barash v. Insurance Co. of N. Am.,
                    451 N.Y.S.2d 603, 605 (N.Y. Sup. 1982).
                    
                    
                    Footnote 32:
                    
                                        925 P.2d 1042, 1045-47 (Alaska
                    1996).
                    
                    
                    Footnote 33:
                    
                                        Id. at 1045-46.
                    
                    
                    Footnote 34:
                    
                                        See id. at 1047.
                    
                    
                    Footnote 35:
                    
                         Id. at 1046.
                    
                    
                    Footnote 36:
                    
                         See supra, note 1, under "EXCLUSIONS",
                    paragraphs 1(b) & (c).
                    
                    
                    Footnote 37:
                    
                                        See Bongen, 925 P.2d at 1046.
                    
                    
                    Footnote 38:
                    
                                        See, e.g., State v. First Nat'l Bank
                    of Anchorage, 660 P.2d 406, 419 n.24 (Alaska
                    1982) (construing the word "disposition,"
                    which AS 34.55.044(1) defines as including the
                    "sale, lease, assignment, award by lottery, or
                    any other transaction concerning a
                    subdivision," under the doctrine of ejusdem
                    generis as limited to transactions involving
                    the transfer of an interest in land).
                    
                    
                    Footnote 39:
                    
                                        See Winters v. Charter Oak Fire Ins.
                    Co., 4 F. Supp. 2d 1288, 1291-92 (D.N.M.
                    1998).
                    
                    
                    Footnote 40:
                    
                         925 P.2d 1042 (Alaska 1996).
                    
                    
                    Footnote 41:
                    
                         Id. at 1043.
                    
                    
                    Footnote 42:
                    
                         See id. at 1044-47.
                    
                    
                    Footnote 43:
                    
                         See id. at 1045-46.
                    
                    
                    Footnote 44:
                    
                         See part IV.C.1, supra.
                    
                    
                    Footnote 45:
                    
                                        925 P.2d at 1043.
                    
                    
                    Footnote 46:
                    
                                        See Schroeder v. State Farm Fire &
                    Cas. Co., 770 F. Supp. 558, 560 (D. Nev.
                    1991); Millar v. State Farm Fire & Cas. Co.,
                    804 P.2d 822, 824-25 (Ariz. App. 1990); Kula
                    v. State Farm Fire & Cas. Co., 628 N.Y.S.2d
                    988, 991 (N.Y. App. Div. 1995); Village Inn
                    Ap'ts. v. State Farm Fire & Cas. Co., 790 P.2d
                    581, 582-83 (Utah App. 1990).
                    
                    
                    Footnote 47:
                    
                                        See Schroeder, 770 F. Supp. at 560;
                    Millar, 804 P.2d at 824-25; Kula, 628 N.Y.S.2d
                    at 989; Village Inn, 790 P.2d at 582.
                    
                    
                    Footnote 48:
                    
                                        See Millar, 804 P.2d at 824;
                    Schroeder, 770 F. Supp. at 562; Kula, 628
                    N.Y.S.2d at 990; Village Inn, 790 P.2d at 582.
                    
                    
                    Footnote 49:
                    
                                        See Bering Strait Sch. Dist. v. RLI
                    Ins. Co., 873 P.2d 1292, 1295 (Alaska 1994)
                    ("Construction of an insurance policy under
                    the principle of reasonable expectations does
                    not depend on a prior determination of policy
                    ambiguity.").
                    
                    
                    Footnote 50:
                    
                                        See Winters v. Charter Oak Fire Ins.
                    Co., 4 F. Supp. 2d 1288, 1292 (D.N.M. 1998);
                    Sentinel Assocs. v. American Mfrs. Mut. Ins.
                    Co., 804 F. Supp. 815, 819 (E.D. Va. 1992)
                    aff'd, 30 F.3d 130 (4th Cir. 1994).
                    
                    
                    Footnote 51:
                    
                                        See, Winters, 4 F. Supp. 2d at 1291
                    (construing the term "to cover only naturally
                    occurring phenomena such as earthquake or
                    landslide" where a broken pipe caused earth
                    movement); Sentinel Assocs., 804 F. Supp. at
                    816, 818-19 (limiting an earth movement
                    exclusion to natural phenomena and noting that
                    "numerous courts faced with analogous language
                    have reached similar conclusion").
                    
                    
                    Footnote 52:
                    
                         11 Couch on Insurance sec. 153:68 (3d ed.
                    1998).
                    
                    
                    Footnote 53:
                    
                         Id.
                    
                    
                    Footnote 54:
                    
                                        See Ender v. National Fire Ins. Co.
                    of Hartford, 563 N.Y.S.2d 85 (N.Y. App. Div.
                    1991); Popkin v. Security Mut. Ins. Co. of
                    N.Y., 367 N.Y.S.2d 492 (N.Y. App. Div. 1975).
                    
                    
                    Footnote 55:
                    
                                        Adrian Assocs., Gen. Contractors v.
                    National Sur. Corp., 638 S.W.2d 138, 141 (Tex.
                    App. 1982), aff'd, National Sur. Corp. v.
                    Adrian Assocs., Gen. Contractors, 650 S.W.2d
                    67 (Tex. 1983).
                    
                    
                    Footnote 56:
                    
                                        Umialik does cite to one case
                    excluding water damage, but in that case the
                    water damage originated from an external
                    source.  See Buttelworth v. Westfield Ins.
                    Co., 535 N.E.2d 320, 321 (Ohio App. 1987)
                    (excluding coverage for water damage resulting
                    from burst pipe on neighbor's property); see
                    also Rodin v. State Farm Fire & Cas. Co., 844
                    S.W.2d 537, 538 (Mo. App. 1992) (excluding
                    coverage for sewage back-up originating from
                    roots in sewer system).