Homeowners Choice Property & Casualty Insurance Co. v. Maspons

Third District Court of Appeal

State of Florida

Opinion filed January 18, 2017.

Not final until disposition of timely filed motion for rehearing.

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No. 3D14-1310

Lower Tribunal No. 12-14183

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Homeowners Choice Property & Casualty, etc.,

Appellant,

vs.

Miguel Maspons, et al.,

Appellees.

An Appeal from the Circuit Court for Miami-Dade County, Darrin P.

Gayles, Judge.

Groelle & Salmon P.A., and Robert C. Groelle and Patrick J. Carleton (West

Palm Beach), for appellant.

Mintz Truppman and Timothy H. Crutchfield, for appellees.

Before EMAS and LOGUE, JJ., and SHEPHERD, Senior Judge.

SHEPHERD, Senior Judge.

This is an appeal by Homeowners Choice Property and Casualty Company

from an adverse final summary judgment under a homeowners’ insurance policy.

The dispositive question appears to be whether the undisputed facts of this case

support the judgment of the trial court that the homeowners are entitled to

indemnity under the “ensuing loss” provision of a homeowners’ insurance policy

for the cost of tearing up and replacing a portion of the foundation or slab on which

their home sits, necessary to reach and replace a sanitary drain line, the repair and

replacement of which is not covered under the policy. The trial court found

coverage to exist under this provision of the policy. We find the decision of the

trial court was premature.

FACTS

The sanitary drain line in need of repair and replacement in this case is

located under the kitchen floor of a home owned by Miguel and Annette Maspons

in Miami-Dade County. The home was constructed in 1957 on a poured concrete

slab. The sanitary drain lines for the home are located under the slab and made of

cast iron pipe. No one questions that this was anything other than a usual

construction material or construction method for the era.

In December 2010, the Maspons noticed their kitchen sink was draining

slowly. On February 8, 2011, the Maspons hired Water Leak Detectors, which

determined, through the use of underground videography, that there was a break or

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failure in the sanitary drain line under the kitchen floor in need of repair. On

March 21, 2011, a public adjuster, retained by the Maspons, reported to

Homeowners Choice that the drain line under the floor of the property was

“broken” and was causing the sink to drain slowly. On March 28, 2011,

Homeowners Choice inspected the property. Using a similar non-destructive

technology, Homeowners Choice’s inspector, My Plumbing Company, found a

large hole in the “bottom sweep fitting” of the sanitary drain pipe that serves the

kitchen, turning it toward the hall bathroom. My Plumbing Company also found a

second hole in the line, and “scale” and “detritus” in other drain lines it examined.

There has never been a claim that the broken drain pipe caused any water damage

to the interior of the home and, despite speculation and argument of counsel, no

evidence that water seepage from the pipe has caused any damage under the slab of

the house. As Ms. Maspons testified in her deposition, “I won’t know what other

damages there are until the broken pipe is dug up.”

Based upon this state of the record, the trial court found there was no

coverage under the insurance policy for the repair and replacement of the pipe, but

that Homeowners Choice was responsible for the greater cost of tearing out and

replacing the slab to make the repair. Homeowners Choice appeals the latter

decision.

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ANALYSIS

In Florida, the insured has the burden of proving facts that bring its claim

within an insurance policy’s affirmative grant of coverage. E. Fla. Hauling, Inc. v.

Lexington Ins. Co., 913 So. 2d 673, 678 (Fla. 3d DCA 2005). In order to meet this

burden under a policy of property damage insurance, the insured must prove (1)

that the property harmed or damaged falls within the “insuring clause” of the

policy, and (2) the loss claimed falls within a second, “covered perils” provision

contained in each policy. See 10 Couch on Insurance § 148:2 (3d ed. 2013). The

property in this case is uncontestably insured property under the Homeowners

Choice insurance policy. Thus, the first prong of the coverage analysis is satisfied.

It is the second coverage prong that produces the question for resolution in this

case, whether the Maspons suffered a loss that also falls within the “covered

perils” provision of the insurance policy. Only then might compensation be due,

and then only if there is no applicable exclusion from coverage that might apply.

The “covered perils” section of the Homeowners Choice insurance policy in

this case reads in pertinent part:

SECTION 1 – PERILS INSURED AGAINST --

COVERAGE A – DWELLING and COVERAGE B –

OTHER STRUCTURES

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We insure against risk of direct loss to property described in

Coverages A and B only if that loss is a physical loss to property. We

do not insure, however, for loss:

....

2. Caused by:

....

e. Any of the following:

(1) Wear and tear, marring, deterioration;

....

If any of these cause water damage, not otherwise excluded, from a

plumbing, heating, air conditioning or automatic fire protection

sprinkler system or household appliance, we cover loss caused by the

water including the cost of tearing out and replacing any part of the

building necessary to repair the system or appliance. We do not

cover loss to the system or appliance from which this water

escaped.

(Emphases added.)

Any analysis must begin with the language of the insurance contract. We

give the undefined words of an insurance contract their ordinary meaning, just as

we would with any other type of contract. See State Farm Fire & Cas. Co. v.

Castillo, 829 So. 2d 242, 244 (Fla. 3d DCA 2002) (“[T]erms utilized in an

insurance policy should be given their plain and unambiguous meaning as

understood by the ‘man-on-the-street.’”). A “loss” is the diminution of value of

something, and in this case, the ‘something’ is the insureds’ house or personal

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property. Loss, Black’s Law Dictionary (10th ed. 2014). “Direct” and “physical”

modify loss and impose the requirement that the damage be actual. Examining the

plain language of the insurance policy in this case, it is clear that the failure of the

drain pipe to perform its function constituted a “direct” and “physical” loss to the

property within the meaning of the policy.1

However, the last paragraph of the “perils insured” provision of the

insurance policy, often referred to as the “ensuing loss” provision of the policy,

cautions that we not prematurely abort our inquiry. That clause provides the

homeowner with coverage for an “ensuing” loss that is not specifically excluded.

Thus, while the exclusion for “[w]ear and tear” or “deterioration” might mean, and

in this case does mean by virtue of the Maspons’ concession that Homeowners

Choice is not obligated to compensate the Maspons for their corroded drain pipe, if

the Maspons suffered consequential loss as a result of the corroded pipe and that

consequential or “ensuing” loss is not excluded under another provision of the

policy, the loss is covered. See Liberty Mutual Fire Ins. Co. v. Martinez, 157 So.

3d 486, 488 (Fla. 5th DCA 2015); Murray v. State Farm Fire & Cas. Ins. Co., 219

Cal App. 3d 58, 64 (Cal. Ct. App. 1990).

Happily for us, we can quickly conclude the interpretive gymnastics in

which we are engaged at this point. At the time of the summary judgment

1 We pause to note that unlike some policies, this insuring clause language does not

require the loss to be either “sudden” or “accidental.”

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proceeding, the slab had not been opened. There was no evidence that the water

exiting the pipe had caused any damage to its surroundings. See Cheetham v.

Southern Oak Ins. Co., 114 So. 3d 257 (Fla. 3d DCA 2013) (reversing a judgment

for insurer where there was evidence of damage caused by water backing into the

residence up through a blocked pipe). Thus, the trial court erred by entering

judgment against Homeowners Choice for the cost of the repair and replacement of

the slab necessary to reach the broken pipe at this time. On the other hand, it is not

inconceivable that such evidence may surface in the future. For this reason, we

reverse and remand this case for entry of judgment in favor of Homeowners

Choice Insurance Company, but without prejudice to the Maspons’ filing another

claim of loss at a later date, if appropriate.

Reversed and remanded with directions.

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