Unexpected and Instantaneous Loss: Reevaluation of “Sudden” in Homeowners’ Insurance Coverage

Introduction

Catalano v. Allstate Indemnity Company (10th Cir. 2025) confronts the meaning of “sudden and accidental direct physical loss” under a Colorado landlord’s package insurance policy. Michael Catalano, Jr. (the landlord and appellant) sued Allstate after his tenant discovered a buckled floor, allegedly caused by adjacent street‐side construction vibrations. Allstate denied coverage, invoking both the “earth movement” and “wear and tear” exclusions, and the district court granted summary judgment in Allstate’s favor, holding that the damage was not “sudden.” Catalano appealed, challenging the district court’s temporal‐only definition of “sudden” and seeking a ruling on whether the loss fell within the policy’s grant of coverage.

Summary of the Judgment

The Tenth Circuit reversed the district court. It held that under Colorado law the term “sudden” in an insurance policy cannot be confined to a strictly temporal sense—“brought about in a short time”—but also carries the expectation component of “unexpected” or “unintended.” Applying dictionary definitions and the Colorado Supreme Court’s analysis in Hecla Mining Co. v. New Hampshire Insurance Co., the panel concluded a reasonable jury could find the floor damage both unexpected and instantaneous, despite months of intermittent vibrations. It remanded for further proceedings, including consideration of the earth‐movement exclusion. The court also reversed summary judgment on Catalano’s statutory bad faith claim, which depended on the breach‐of‐contract ruling.

Analysis

1. Precedents Cited

Hecla Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083 (Colo. 1991): The Colorado Supreme Court construed “sudden and accidental” in a CGL pollution exclusion. It found “sudden” ambiguous, reviewed dictionary definitions, and held it could mean both “abrupt” (temporal) and “unexpected/unintended” (expectational). The Tenth Circuit relied on Hecla’s methodology to interpret “sudden” in a homeowners’ policy.
Mock v. Allstate Ins. Co., 340 F. Supp. 3d 1087 (D. Colo. 2018): The district court in Colorado defined “sudden” in a homeowner’s policy strictly as “brought about in a short time.” The Tenth Circuit deemed that approach too narrow, distinguishing Mock’s reliance on policy‐specific definitions and reaffirming Hecla’s broader plain‐meaning analysis.
Renfandt v. New York Life Ins. Co., 419 P.3d 576 (Colo. 2018): Affirming that undefined policy terms must be given their plain, ordinary meaning using recognized dictionaries.
Colorado Intergovernmental Risk Sharing Agency v. Northfield Ins. Co., 207 P.3d 839 (Colo. App. 2008): Articulates the insured’s burden to show coverage elements (causation), and then the insurer’s burden to prove an exclusion.

2. Legal Reasoning

The Tenth Circuit applied Colorado contract‐interpretation principles:

Plain‐Meaning Inquiry: Where a term is undefined in the policy, the court looks to its ordinary meaning via dictionaries. “Sudden” appears in leading dictionaries as both “happening without warning” and “occurring quickly.”
Hecla’s Ambiguity Approach: Even if “sudden” carried a temporal sense, it also embraces an element of unexpectedness. Hecla’s en banc analysis of pollution exclusion language showed the court would consider both dimensions.
Rejection of Strict Temporal Definition: Mock’s “short‐time” only interpretation was too narrow. An insured of ordinary intelligence understands “sudden” to mean unexpected as well as abrupt.
Burden‐Shifting Framework: Catalano met his initial burden by presenting evidence—tenant testimony and an expert report—that the damage occurred “one day fine, the next day buckled” and was caused instantly by discrete vibration events. Summary judgment was therefore improper.

3. Impact

This ruling clarifies coverage disputes in Colorado homeowner and landlord policies:

Insurers cannot defeat “sudden and accidental” coverage by arguing only that damage-generating events occurred over an extended period.
Courts will analyze both the temporal and unexpected characteristics of a loss, permitting jury findings on whether an insured could have foreseen the damage.
Policy drafters should consider providing precise definitions or examples of “sudden” in future editions to avoid ambiguity.
Insureds may have a stronger case where damage arises from intermittent, short‐duration events, even if those events repeat over time.

Complex Concepts Simplified

“Sudden and Accidental”: Not just “fast” but also “unexpected.” Something can happen quickly without notice and still be “sudden.”
Burden of Proof in Insurance Cases:
1. The insured first shows the loss falls under the policy’s coverage grant (e.g., “sudden and accidental”).
2. If that succeeds, the insurer must prove the loss fits an exclusion (e.g., earth movement or wear and tear).
Earth Movement Exclusion: Excludes damage from shifting earth (natural phenomena like earthquakes—but potentially also man‐made vibrations). The Tenth Circuit remanded for fact‐specific analysis once coverage is established.
Summary Judgment Standard: The judge views all evidence in the non‐movant’s favor. If reasonable jurors could side with the insured on “sudden,” summary judgment for the insurer is improper.

Conclusion

Catalano v. Allstate revises the landscape of homeowners’ insurance coverage in Colorado by rejecting a purely temporal understanding of “sudden.” It reaffirms that insureds and courts must consider whether a loss was both unexpected and abrupt. In practice, this decision empowers policyholders to argue that damage from intermittent, short‐ lived events—as long as those events were unexpected—falls within the “sudden and accidental” grant of coverage. Insurers must now address both dimensions when denying claims on temporal grounds. The case also underscores the importance of clear policy drafting and of sticking to well‐settled contract interpretation principles when disputes arise.