Summary of Case by Oliver Bryce Clark, Associate Attorney
Faced with competing Motions for Summary Judgment, the Middle District of Florida, Orlando Division, recently considered whether an insurer bears responsibility for structural damage done to an insureds’ property and the consequent loss of the insureds’ water heater system based upon a plain language analysis of the extant insurance contract between the insured Plaintiffs and the Defendant insurer. The Court also considered whether the amount already paid to the insureds as compensation for their non-structural damages represented payment-in-full as a matter of law.
In Hatch v GeoVera Specialty Insurance Company, Plaintiff, Barbra Hatch, arrived home to discover that it was flooded with approximately 4,000 gallons of water due to a leak originating from the hot water heater. At the time of the loss, Plaintiffs’ home was insured under a policy with Defendant who issued payment for these repairs. Plaintiffs’ later discovered cracks in the master-bedroom flooring. Plaintiffs’ and Defendant each employed experts to investigate these new damages and both sides concluded that the home had sustained structural damage. Defendant denied Plaintiffs coverage for these structural damages, concluding that the same were excluded by the Earth Movement Exclusion of the insurance policy.
Based on the above, the Parties filed cross motions for summary judgment, asking the Court to decide whether Plaintiffs’ structural damage should have been excluded; whether damage to Plaintiffs’ hot water heater itself was covered under the terms and conditions of Plaintiffs’ policy, and whether Plaintiffs had been sufficiently compensated for the non-structural damage to the residence. The Court’s decision here turned on a “plain meaning” analysis of the terms and conditions of Plaintiffs’ insurance policy and the application of the standard for the granting of summary judgment.
When deciding whether to grant summary judgment in favor of either party to a lawsuit, the Court must determine whether the movant has shown “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “[A]t the summary judgment stage the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In applying this standard, the Court examined Plaintiffs’ insurance contract with Defendant, noting that “where the language in an insurance contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning so as to give effect to the policy as written. Washington Nat’l Ins. Corp. v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013).
Affording the instant policy language its “plain meaning,” the Court reasoned that the question of whether structural damage was covered turned on its having been caused directly by earth movement. Taking the opinions of Plaintiffs’ and Defendant’s experts together, the Court concluded that the discharge of water from Plaintiffs’ heater did not directly cause the structural damage. Instead the water’s discharge caused “compression or erosion” (earth movement), which was itself directly responsible for the structural damage. Because “earth movement” was directly responsible for the structural damage sustained to Plaintiffs’ residence, said damages were specifically excluded by the terms and conditions of the policy. The Court also found specific, exclusionary language within Plaintiffs’ policy whose plain meaning absolved Defendant of responsibility for the damage sustained to Plaintiffs’ water heater itself.
As a final matter, the Court addressed Defendant’s contention that it was entitled to summary judgment on the issue of whether Plaintiffs’ had been paid in full for the non-structural damage sustained to the residence. The Court denied this portion of Defendant’s motion out of hand, asserting that it was wholly unsupported, as Defendant either presented evidence contradictory to its position or presented no supportive evidence at all.
The Parties made numerous motions in limine and Daubert motions in connection with the above, all of which were denied.
Hatch highlights the salience of seemingly elementary modes of contractual interpretation in swiftly resolving coverage disputes at the summary judgment stage.