Monzo v. Nationwide Property & Casualty Insurance Co. ( 2021 )

IN THE SUPREME COURT OF THE STATE OF DELAWARE
ERIC MONZO and DANA SPRING §
MONZO, §
§ No. 199, 2020
Plaintiffs Below, §
Appellants, § Court Below – Superior Court
§ of the State of Delaware
v. §
§ C.A. No. K18C-11-003
NATIONWIDE PROPERTY & §
CASUALTY INSURANCE CO., §
§
Defendant Below, §
Appellee. §
§
Submitted: January 13, 2021
Decided: March 11, 2021
Before VAUGHN, TRAYNOR, and MONTGOMERY-REEVES, Justices.
Upon appeal from the Superior Court. AFFIRMED IN PART, REVERSED IN PART.
Eric J. Monzo, Esquire, MORRIS JAMES LLP, Wilmington, Delaware; for Appellants Eric
Monzo and Dana Spring Monzo.
Louis J. Rizzo, Jr., Esquire, REGER RIZZO & DARNALL LLP, Wilmington, Delaware;
for Appellee Nationwide Property & Casualty Insurance Company.
MONTGOMERY-REEVES, Justice:
This appeal relates to an insurance coverage dispute. In 2011, Appellants
Eric J. Monzo and Dana Spring Monzo purchased a homeowners insurance policy issued
by Appellee, Nationwide Property & Casualty Co. (“Nationwide”). The policy contained
standard exclusions for water damage and earth movement, along with optional water
backup coverage.
In July 2017, a heavy thunderstorm destroyed a pedestrian bridge and retaining wall
located at the Monzos’ residence. A pair of engineering reports prepared after the storm
indicated that a combination of water backups from drainage systems, scouring of supporting
earth embankments, heavy rain, and tree debris caused the damage. The Monzos filed a
claim with Nationwide, seeking coverage under the homeowners insurance policy.
Nationwide denied coverage, and the Monzos filed suit in the Superior Court. The
court granted summary judgment for Nationwide, holding that the policy’s earth movement
and water damage exclusions applied. The Monzos appealed, arguing that the Superior
Court erred by granting summary judgment too early in the discovery process,
misinterpreting the policy, and denying a motion for post-judgment relief.
Having reviewed the briefs and record on appeal, the Court: (i) affirms the Superior
Court’s holding that Nationwide was entitled to summary judgment regarding the collapsed
bridge; (ii) reverses the Superior Court’s holding that Nationwide was entitled to summary
2
judgment regarding the retaining wall; and (iii) affirms the Superior Court’s denial of the
Monzos’ post-judgment motion.
I. RELEVANT FACTS AND PROCEDURAL BACKGROUND
A. The Monzos Purchase Homeowners Insurance from Nationwide
In July 2011, the Monzos approached Matthew Papa, an insurance agent, about
purchasing comprehensive insurance coverage from Nationwide.1 The Monzos expressed
interest in several different types of coverage, including a homeowners insurance policy
covering the couple’s residence in Greenville, Delaware.2
As part of the underwriting process, Nationwide hired Cornerstone Appraisal
Services Inc. (“Cornerstone”) to inspect the Greenville residence and provide a risk analysis.3
Cornerstone drafted a report describing various aspects of the property, including two
pedestrian bridges crossing a stream.4 After receiving Cornerstone’s report, Nationwide
required that the Monzos comply with various conditions, such as providing an alarm
certification and installing a fireplace screen.5 Nationwide also required that the Monzos
sign a document acknowledging that they did not purchase flood insurance.6 The top of the
1
App. to Opening Br. 220-21 (hereafter “A_”).
2
Id.
3
A222.
4
A234.
5
A223.
6
A144. The document asked the policyholder to acknowledge, “I understand that loss resulting
from flood damage is not covered under my homeowners’ policy, and that flood coverage is
available through the National Flood Insurance Program (NFIP). By signing this form, I am
voluntarily choosing not to purchase flood protection for my building and/or contents under a
National Flood Insurance policy as indicated below.” Id.
3
acknowledgment stated, “Everyone lives in a flood zone—it is just a question of whether
you live in a low, moderate, or high risk area. Nearly 25% of all flood claims are for
properties located in lower-risk flood areas or those property locations where flooding is not
expected.”7
Eric Monzo signed the acknowledgment.8 Nonetheless, it was his “understanding
that this election applied only to the buildings located at the property and related contents
. . . . [Eric] did not agree to waive purchase of [flood] coverage as it related to other structures
located at the property . . . .”9
In August 2011, Nationwide accepted the Monzos’ application and issued a
homeowners insurance policy covering the Greenville property.10 The final policy included
“Option R Broad Water Backup of Sewers or Drains Coverage” (“Option R Coverage”), for
which the Monzos paid extra premiums.11 The Monzos specifically negotiated that
Option R Coverage would apply to several water drainage systems on their lot, including:
(i) an underground septic system that drains into a leach field; (ii) a sump pump system that
removes water from the residence’s foundation, draining into the stream; (iii) a water system
7
Id.
8
See A223-24.
9
A224.
10
Id.
11
See A304; A227-28.
4
connected to a well; and (iv) a system of gutters that carries water from the residence’s roof
to the stream.12
B. The Monzos File a Claim with Nationwide after a Storm Damages their
Greenville Residence
On July 23, 2017, a heavy thunderstorm struck the Monzos’ residence.13 After
hearing the “septic tank backup alarm,” Eric Monzo “went downstairs” to silence the alarm,
“found water in the basement area,” and “spent the remainder of the evening and early
morning cleaning, clearing, and removing the water that had seeped from the ground through
the walls and floor,” along with “flood or wastewater” that had “backed up” into the
residence from the “septic system, . . . sump pump, [and] sump pump well . . . .”14
Unfortunately, removing this water from the “foundation . . . coupled with the runoff into the
gutters and exterior drains from the Main Residence through the subsurface piping into the
nearby [s]tream was too much for the drainage system to handle.”15 A stone retaining wall
containing the drainage system partially collapsed.16
In the storm’s aftermath, the Monzos discovered that the bridges on their property
were significantly damaged. “The upstream bridge collapsed completely. The downstream
bridge was more substantial and did not collapse but did suffer some severe damage.”17
12
A226-28.
13
A228.
14
A228-29.
15
A229
16
Id.
17
A146.
5
A couple of days after the storm, the Monzos contacted Papa about submitting a claim
with Nationwide to cover the damage to the retaining wall and bridges.18 Nationwide
assigned the claim to Melissa Barlow-Carey, a claims associate.19
Around the same time that they submitted a claim, the Monzos hired
Fredrick S. Roland, a structural engineer, “to investigate and determine the cause of the
collapse of a stone pedestrian foot bridge that crosses a small stream on [the Monzos’]
property.”20 Roland inspected the property and produced a report concluding:
1. The upstream bridge collapsed as a result of hidden decay
below the normal water level and the supporting earth
embankments being scoured away during a thunderstorm. The
collapse was further exacerbated by a sudden burst of heavy rain
and debris from trees whose weight was too much to be borne
by the supporting bridge structure.
2. The heavy rainfall during a short period of time caused
significant drainage from roof areas of the main house and into
the drainage system of underground pipes which open into the
stream via pipes through the stone wall. The overflow of the
rain drainage caused a failure of the drainage system in that
water backed up and resulted in a collapse at the area where
water was being forced out of the pipes and into the creek. It is
this aspect of the front stone wall that collapsed.
3. The heavy rain fall over a short period of time increased the
water speed creating the scour effect that eroded the stream
banks.21
18
A86.
19
A85.
20
A146.
21
A148.
6
Nationwide hired its own structural engineer, Sihan S. Jawad, to investigate and
“determine the cause of the damage to the bridge and the stream embankment.”22 Jawad’s
report concluded:
[T]he damage to the bridges and the retaining walls . . . was
caused by soil erosion and soil/hydrostatic pressure. The heavy
rain in the region on or about the loss date increased the
soil/hydrostatic pressure and the flow in the stream. Debris
floating in the stream possibly dammed the flow and may have
contributed to the damage to the bridges.23
In October 2017, Papa sent an email to Barlow-Carey to discuss the status of the
Monzos’ claim.24 Papa wrote, “It sounded like, because of the policy language (or lack
thereof), that coverage could potentially be afforded. I didn’t and wouldn’t tell them that[,]
but I figured I’d check in to see what your thoughts are at this point.”25 Barlow-Carey
responded, “I highly doubt this will be covered.”26
C. Nationwide Denies the Claim and the Monzos Sue
In November 2017, Nationwide sent the Monzos a letter denying their claim.27 In the
letter, Nationwide asserted that the policy’s earth movement and water damage exclusions
applied because heavy rain, scouring, and water-borne debris combined to cause the loss.28
Nationwide asserted that Option R Coverage was unavailable because “[t]he earth
22
A87; A151.
23
A153.
24
A311.
25
Id.
26
Id.
27
A168.
28
A171-72.
7
movement and water damage exclusions . . . apply regardless of whether another covered
cause of loss . . . contributed to the loss before, after, or at the same time as the excluded earth
movement or ‘water damage.’”29
Approximately one year later, the Monzos timely filed a complaint in the Superior
Court.30 The complaint alleged two counts. Count I sought a declaratory judgment “that
under the terms of the Nationwide policy, [the Monzos] are entitled to immediate payment
by Nationwide . . . in connection with the July 23, 2017 storm.”31 Count II alleged that
Nationwide breached its contractual obligations in bad faith by refusing, “without reasonable
justification,” “to make complete and timely payment of insurance proceeds to [the Monzos]
under the Nationwide policy . . . in connection with the July 23, 2017 storm . . . .”32
Despite describing the homeowners insurance policy “as part of a comprehensive
insurance coverage plan,”33 the complaint only sought coverage under the homeowners
policy and did not allege that coverage could be available under another policy.34 For
example, the complaint defined “the Nationwide Policy” to mean the “homeowners
insurance contract . . . .”35
29
A172.
30
A1.
31
A7.
32
A8. In 2019, the parties agreed to a stipulation dismissing the bad faith claim without prejudice.
A48.
33
A2.
34
A1-9.
35
A2.
8
In September 2019, Nationwide filed a motion for summary judgment.36 Nationwide
argued that it was entitled to summary judgment because, among other things, the policy
excludes coverage for water damage and earth movement, and there was no dispute that both
of those excluded perils contributed to the loss.37 Nationwide also argued that the Option R
Coverage did not apply because there was no “backup” 38 and because the policy contained
an Anti-Concurrent Causation Clause (the “ACC Clause”) that would defeat coverage if
excluded and covered perils combined to cause the loss.39
The Monzos opposed the motion, arguing that summary judgment was premature
because discovery was incomplete.40 The Monzos also argued that summary judgment was
inappropriate because there were disputed facts about whether the policy covered their
claim.41
In January 2020, the Superior Court held an oral argument regarding summary
judgment.42 During the argument, the court asked Dana Spring Monzo, “[D]o plaintiffs
disagree with Mr. Roland’s conclusions as to what caused the damage?”43 Dana answered,
I would not say that we disagree. We have not finalized the full
scope of what other areas need to be included.
36
A52.
37
See A70-76. Section III.A.1, supra, discusses these provisions in greater detail.
38
A80-81.
39
A82-83.
40
See, e.g., A208-09.
41
See A208-19.
42
A438.
43
A449.
9
Mr. Roland also did not enter the interior of our home to provide
a full evaluation of the drainage system as it applies to Option R.
So what was supplied for the loss issue may not be a complete
report for what it needed for success in litigation.44
On March 18, 2020, the Superior Court issued a Memorandum Opinion and Order
granting Nationwide’s motion for summary judgment.45 The court began its analysis by
holding that there was no dispute that scouring, heavy rain, and water-borne debris
contributed to the damage:
At oral argument, Plaintiffs conceded that they are not
disputing Roland’s findings. Therefore, Plaintiffs agree that the
damage to the pedestrian bridge was caused, at least in part, by
“supporting earth embankments being scoured away during a
thunderstorm” and “debris from trees whose weight was too
much to be borne by the supporting bridge structure,” and that
the damage to the wall was caused by “heavy rainfall during a
short period of time” that drained from the roof area of the house
into the underground drainage system, ultimately resulting in “a
collapse [of the wall] at the area where the water was being
forced out of the pipes and into the creek.”46
Relying on this purported concession, the court held that Nationwide was entitled to
summary judgment because “the facts are undisputed that the damage to both the pedestrian
bridge and the wall w[as] caused by factors . . . not covered under the Policy, namely, ‘earth
44
A449-50, at 12:16-13:4.
45
Monzo v. Nationwide Prop. & Cas. Ins. Co., 2020 WL 1317276, at *1 (Del. Super. Ct. Mar. 18,
2020).
46
Id. at *3 (alteration in original) (quoting A148). The court did not provide a citation to the Monzos’
purported concession. The excerpt included above seems to provide the clearest example of a
concession supporting the court’s assertion. See A449-50, at 12:16-13:4.
10
movement’ and ‘water or water-borne material.’”47 The court held that the earth movement
exclusion applied because “scouring” is a type of earth movement:
[W]hile it is true that neither “erosion” nor “scour” are explicitly
named as excluded causes within the Policy, both fall within the
Policy’s “earth movement” exclusion. “Scour” is a term that
encompasses “erosion.” Moreover, “erosion” is a term used to
describe a natural process, whether rapid or gradual, that wears
away soil. Thus, heavy rainfall and the scouring of the earth
caused by that rainfall were “natural . . . causes” that resulted in
“movement,” i.e., erosion, of “earth” surrounding both the
pedestrian bridge and the wall.48
The court held that the water damage exclusion applied because there was no dispute
that water and water-borne material contributed to the damage:
[T]he Policy excludes damage caused by “water or water-borne
material,” i.e., by “flood, surface water . . . [or] overflow of a
body of water” or by “water or water-borne material below the
surface of the ground.” Although the word “rain” is not
mentioned in the exclusions, “rain” contributing to a “flood”
would certainly fall under these exclusions. . . . Additionally, the
“debris from trees” carried by the stream was “water-borne
material.” . . . [I]t is undisputed, as noted in Roland’s report, that
a burst of rainfall swelling a stream, “material” carried along in
that stream, and water moving “below the surface of the
ground,” i.e., through the underground drainage system,
damaged the pedestrian bridge and the wall.49
47
Monzo, 2020 WL 1317276, at *4.
48
Id. (citations omitted).
49
Id. (citations omitted).
11
Finally, the court held that “even if non-excluded causes contributed to the damage,
coverage is barred under the ACC Clause, which precludes coverage when excluded and
non-excluded causes combine to cause damage.”50
The court rejected the Monzos’ argument that the Option R Coverage was available
for two reasons.51 First, the court held that the Option R Coverage did not abrogate the ACC
Clause, meaning that “Plaintiffs are precluded from recovery even if both excluded and non-
excluded causes combined to damage the wall . . . .”52 Thus, the court reasoned that even if
a backup covered under the Option R Coverage contributed to the loss, the Monzos were not
entitled to coverage because other excluded perils, such as scouring, also contributed to the
loss.
Second, the court held that Option R Coverage was unavailable because the Monzos
did not suffer a covered backup:
Option R . . . applies to damage “caused by . . . water or water-
borne material” that “[b]acks up through sewers or drains from
outside the dwelling’s plumbing system” or “[o]verflows from
a sump pump, sump pump well, or other system designed to
remove subsurface water or water-borne material from the
foundation area.” Although Plaintiffs allege that immediately
following the Storm, they had to remove water that had backed
up into their residence . . . they are seeking coverage for damage
to the pedestrian bridge and the wall, not to their residence.
Moreover, while Roland’s report states that water “backed up
and resulted in a collapse” and “overflow[ed]’ from the roof area
of the house into the drainage system, it is clear from reading his
50
Id.51
Id. at *4-6.
52
Id. at *4.
12
conclusions in context that, according to Roland, water “backed
up” from the roof of the house, through the underground
drainage system, and into the stream, not that it “[b]acked up
through sewers and drains from outside the dwelling’s plumbing
system” or “overflow[ed] from a . . . system designed to remove
subsurface water from the foundation area.”53
Finally, the court rejected the Monzos’ argument that summary judgment “should be
denied as premature.”54 The court noted that Superior Court Civil Rule 56(b) allows a party
to seek summary judgment “at any time” and held that it “ha[d] sufficient facts enabling it to
render an informed decision.”55 The Court also held that it need not wait for more discovery
regarding extrinsic evidence because “the Policy’s terms are clear on their face.”56
D. The Superior Court Denies the Monzos’ Motion to Alter or Amend the
Judgment under Superior Court Civil Rule 59(d)
In March 2020, the Monzos filed a motion seeking to alter or amend the judgment
under Superior Court Civil Rule 59(d) and seeking reargument under Rule 59(e).57 The
Monzos argued that their motion was appropriate because: (i) the Superior Court failed to
respond to the Monzos’ argument that summary judgment was premature; and (ii) the
Superior Court improperly relied on the Roland report, which was inadmissible both because
it was hearsay and because it lacked proper authentication.58
53
Id. at *5 (alterations in original) (citations omitted).
54
Id. at *6.
55
Id.
56
Id.
57
A378.
58
A379-84.
13
The Superior Court rejected the Monzos’ motion, holding that the court’s summary
judgment order responded to the Monzos’ argument that summary judgment was
premature.59 The court noted, “Plaintiffs’ argument on this matter is the same as that raised
in their brief in opposition to Nationwide’s Motion for Summary Judgment and explained at
oral argument, and therefore violates the requirements for a motion pursuant to Rule 59.”60
The court rejected the hearsay and authentication arguments as untimely, noting that
the Monzos could have raised both evidentiary objections in response to Nationwide’s
motion for summary judgment.61 The court also cast doubt on the merits of these objections,
opining that Roland’s report could have qualified for the business records exception to
hearsay,62 and noting that “Plaintiffs made the Report part of the factual record by their own
choosing, and thus should have anticipated that the Court would rely on the Report, as part
of the record, in reaching its decision.”63
The Monzos appeal the Superior Court’s orders granting Nationwide’s motion for
summary judgment and denying the Monzos’ post-judgment motion.
59
Monzo, 2020 WL 2467074, at *1.
60
Id. at *2.
61
Id. at *3.
62
Id.
63
Id. (citations omitted).
14
II. STANDARD OF REVIEW
“This Court reviews a grant of summary judgment de novo . . . .”64 Summary
judgment is appropriate if, “viewing the facts in the light most favorable to the nonmoving
party, the moving party has demonstrated that there are no material issues of fact in dispute
and that the moving party is entitled to judgment as a matter of law.”65 The Court “review[s]
questions of law, including contract interpretation, de novo.”66
The Court reviews for abuse of discretion the Superior Court’s denial of a motion
under Superior Court Civil Rule 59.67 Under Rule 59, “a motion to alter or amend [a]
judgment . . . will be granted if the movant shows: ‘(1) an intervening change in controlling
law; (2) the availability of new evidence; or (3) the need to correct clear error of law or to
prevent manifest injustice.’”68 “[T]he Court will deny the motion if it merely restates
arguments already considered and rejected during the litigation.”69
64
Sherman v. Ellis, – A.3d – , 2021 WL 405841, at *4 (Del. Feb. 3, 2021) (citing Homeland Ins.
Co. of N.Y. v. CorVel Corp., 197 A.3d 1042, 1046 (Del. 2018)); see also Sunline Com. Carriers, Inc.
v. CITGO Petroleum Corp., 206 A.3d 836, 845 (Del. 2019).
65
Sherman, 2021 WL 405841, at *4 (quoting Homeland, 197 A.3d at 1046).
66
Urdan v. WR Cap. P’rs, LLC, – A.3d – , 2020 WL 7223313, at *4 (Del. Dec. 8, 2020) (citing
Salamone v. Gorman, 106 A.3d 354, 367 (Del. 2014)).
67
See, e.g., Richards v. Copes-Vulcan, Inc., 213 A.3d 1196, 1199-1200 (Del. 2019) (“Whether we
review the . . . decision as a substantive pretrial motion or a motion for reargument, we review for
abuse of discretion.” (citing Stevenson v. Swiggett, 8 A.3d 1200, 1204 (Del. 2010))); Christian v.
Counseling Res. Assocs., Inc., 60 A.3d 1083, 1087 (Del. 2013)).
68
King v. McKenna, 2015 WL 5168481, at *3 (Del. Super. Ct. Aug. 24, 2015) (quoting Kostyshyn
v. Comm'r of Bellefonte, 2007 WL 1241875, at *1 (Del. Super. Ct. Apr. 27, 2007)).
69
Id. (quoting Paron Cap. Mgmt. v. Crombie, 2012 WL 3206410, at *1 (Del. Ch. Aug. 2, 2012));
see also Tilghman v. Del. State Univ., 2012 WL 5551233, at *1 (Del. Super. Ct. Oct. 16, 2012)
(citations omitted) (“Motions for reargument should not be used merely to rehash the arguments
already decided by the court, or to present new arguments not previously raised.”).
15
III. ANALYSIS
This appeal asks the Court to decide two issues. First, whether the Superior Court
erred by granting Nationwide’s motion for summary judgment. Second, whether the
Superior Court abused its discretion by denying the Monzos’ post-judgment motion. The
Court addresses each issue in turn.
A. The Superior Court Properly Granted Summary Judgment Regarding
the Pedestrian Bridge, But Erred by Granting Summary Judgment
Regarding the Retaining Wall
For the purposes of summary judgment and this appeal, Nationwide admits that the
Monzos have met the threshold requirements for coverage under the homeowners insurance
policy.70 The sole question before the Court is whether, drawing all reasonable factual
inferences in the Monzos’ favor, the policy contains exclusions that unambiguously apply to
the Monzos’ claim.
The Court answers this question in three parts. The first part introduces the relevant
provisions of the homeowners insurance policy. The second part analyzes whether
Nationwide was entitled to summary judgment regarding the collapsed pedestrian bridge.
The third part analyzes whether Nationwide was entitled to summary judgment regarding
the collapsed retaining wall.
70
Answering Br. 13.
16
1. The homeowners insurance policy contains four provisions
relevant to this appeal
Insurance policies are contracts, and Delaware courts apply the ordinary principles of
contract interpretation to construe insurance policies.71 Thus, “where the language of a
policy is clear and unequivocal, the parties are to be bound by its plain meaning.”72
“[W]here an ambiguity does exist,” however, “the doctrine of contra proferentem
requires that the language of an insurance policy be construed most strongly against the
insurance company that drafted it. It is ‘the obligation of the insurer to state the terms of the
policy.’”73 Stated differently, if there is more than one reasonable interpretation of an
insurance policy, Delaware courts apply the interpretation that favors coverage.
“An insurance policy is not ambiguous merely because the parties do not agree on its
construction.”74 Rather, an insurance policy “is ambiguous only when the provisions in
controversy are reasonably or fairly susceptible of different interpretations or may have two
or more different meanings.”75 “Delaware should not ‘destroy or twist policy language
71
See, e.g., In re Solera Ins. Coverage Appeals, 240 A.3d 1121, 1131 (Del. Oct. 2020); O’Brien v.
Progressive N. Ins. Co., 785 A.2d 281, 286-88 (Del. 2001).
72
O’Brien, 785 A.2d at 288 (quoting Emmons v. Hartford Underwriters Ins. Co., 697 A.2d 742,
745 (Del. 1997)).
73
Id. (quoting Emmons, 697 A.2d at 745) (citing Rhone–Poulenc Basic Chems. Co. v. Am. Motorists
Ins. Co., 616 A.2d 1192, 1196 (Del. 1992)); Steigler v. Ins. Co. of N. Am., 384 A.2d 398, 400 (Del.
1978)); see also Shuba v. United Servs. Auto. Ass’n, 77 A.3d 945, 948 (Del. 2013) (“When the
language of an insurance contract is ambiguous, it ‘is construed most strongly against the insurer,
and in favor of the insured, because the insurer drafted the language that is interpreted.’” (quoting
Hallowell v. State Farm Mut. Auto. Ins. Co., 443 A.2d 925, 926 (Del.1982))).
74
In re Solera, 240 A.3d at 1131 (citing O’Brien, 785 A.2d at 288).
75
Id. (quoting E.I. du Pont de Nemours & Co. v. Allstate Ins. Co., 693 A.2d 1059, 1061 (Del. 1997)).
17
under the guise of construing it.’ ‘[C]reating an ambiguity were none exists could, in effect,
create a new contract . . . to which the parties [did] not assent[].’”76
The homeowners insurance policy contains four provisions relevant to this appeal.
First, the policy contains the following earth movement exclusion:
We do not cover loss to any property resulting directly or
indirectly from any of the following. Such a loss is excluded
even if another peril or event contributed concurrently or in any
sequence to cause the loss.
a) Earth Movement and Volcanic Eruption. Earth movement
means: earth movement due to natural or unnatural causes,
including mine subsidence; earthquake; landslide; mudslide;
earth shifting, rising or sinking. Volcanic eruption means:
eruption; or discharge from a volcano.77
Second, the policy contains the following water damage exclusion:
We do not cover loss to any property resulting directly or
indirectly from any of the following. Such a loss is excluded
even if another peril or event contributed concurrently or in any
sequence to cause the loss.
....
b) Water or damage caused by water-borne material. Loss
resulting from water or water-borne material damage described
below is not covered even if other perils contributed, directly or
indirectly to cause the loss. Water and water-borne material
damage means:
76
O’Brien, 785 A.2d at 288 (first alteration in original) (quoting Rhone-Poulenc, 616 A.2d at 1195-
96).
77
A280.
18
(1) flood, surface water, waves, tidal waves, overflow of
a body of water, spray from these, whether or not driven
by wind.
(2) water or water-borne material which:
(a) backs up through sewers or drains from
outside the dwelling’s plumbing system; or
(b) overflows a sump pump, sump pump well or
other system designed to remove subsurface
water or water-borne material from the
foundation area.
(3) water or water-borne material below the surface of
the ground, including water or water-borne material
which exerts pressure on, seeps or leaks through a
building, sidewalk, driveway, foundation, swimming
pool, or other structure.78
Third, embedded within the prior two exclusions is the ACC Clause stating, “We do
not cover loss to any property resulting directly or indirectly from any of the following. Such
a loss is excluded even if another peril or event contributed concurrently or in any sequence
to cause the loss.”79
Fourth, the policy contains the following Option R Coverage:
We will pay up to the limit of liability . . . for direct damage to
covered property caused by or resulting from water or water-
borne material which:
1. backs up through sewers or drains from outside the
dwelling’s plumbing system; or
78
Id.79
Id. (emphasis added).
19
2. overflows from a sump pump, sump pump well
or other system designed to remove subsurface water or
water-borne material from the foundation area.
This is the most we will pay for all covered property under
Coverage A — Dwelling, Coverage B — Other Structures and
Coverage C — Personal Property.
EXCLUSIONS
We do not cover:
1. loss caused by the negligence of an insured; or
2. if the loss occurs or is in progress within the first five
days of the Inception of this coverage unless added at
renewal.
All other damage resulting from water or water-borne material
not mentioned above is excluded as stated in Section I - Property
Exclusion 1.b).
DEDUCTIBLE
We will pay for that part of the covered loss that is above the
Section I – Deductible . . . .
All other provisions of this policy, including
Section I – Deductible, apply.80
80
A304. Section 1 – Property Exclusion 1.b) refers to the water damage exclusion discussed above.
See A280.
20
2. The Superior Court properly granted summary judgment
regarding the collapsed pedestrian bridge
The Superior Court held that Nationwide was entitled to summary judgment
regarding the collapsed bridge because there was no dispute that two excluded perils
contributed to the damage: (i) “earth movement” caused by the scouring of supporting earth
embankments, and (ii) “water damage” caused by the weight of water and water-borne
material on the bridge.81 Noting that the policy contains an ACC Clause, the court
determined that the Monzos could not prevail regardless of whether other covered perils
contributed to the damage.82
The Monzos argue that the Superior Court erred because neither exclusion
unambiguously applies to the collapsed bridge.83 According to the Monzos, the earth
movement exclusion does not apply to “scouring” because the exclusion does not mention
“scouring,” “erosion,” or that earth movement can be combined with water.84 In support,
the Monzos note that other insurers have drafted earth movement exclusions that specifically
refer to “erosion” and state that earth movement is excluded, “combined with water or not.”85
81
Monzo v. Nationwide Prop. & Cas. Ins. Co., 2020 WL 1317276, at *3-4 (Del. Super. Ct. Mar. 18,
2020).
82
See id. at *4-6.
83
Opening Br. 39-47.
84
Id. at 40-42.
85
Id. at 41 (quoting State Farm Fire & Cas. Co. v. Bongen, 925 P.2d 1042, 1043 (Alaska 1996)).
21
Thus, the Monzos contend that the exclusion only applies to the types of earth movement
the exclusion specifically lists, such as earthquakes and volcanic eruptions.86
The Monzos argue that the water damage exclusion does not apply to the collapsed
bridge for two reasons.87 First, the Monzos argue that the water damage exclusion only
applies to damage related to getting insured property wet, not damage caused by the weight
of water on insured property.88 Second, the Monzos argue that applying the exclusion to
water from the stream would make their insurance coverage illusory because Nationwide
knew when it issued the policy that there was a stream on the Monzos’ property.89
Nationwide answers that the policy’s definition of excluded earth movement
“includes a situation like the instant one, where water saturates the earth, causing it to shift
or sink.”90 Thus, according to Nationwide, “[t]he actions described by both engineers which
contributed to the collapse of the bridge would involve ‘earth shifting, rising or sinking,’
which is specifically listed as an exclusion in the policy.”91
Similarly, Nationwide asserts that the water damage exclusion applies because “[t]he
Policy clearly and unambiguously excludes coverage for ‘water damage’ caused by
‘flood.’”92 Thus, because “the ‘severe storm’ resulted in a rain-induced flood, which diverted
86
Id. at 42.
87
Id. at 42-46.
88
Id. at 44.
89
Id. at 43-44.
90
Answering Br. 18 (citations omitted).
91
Id. at 20 (citation omitted).
92
Id. at 15.
22
tree debris into the stream, the policy’s exclusion for ‘water or damage caused by water-
borne material’ bars recovery.”93
a) The earth movement exclusion unambiguously applies to
the collapsed bridge
The Court’s analysis focuses on the earth movement exclusion, which is dispositive.
The Monzos conceded below that they did not “disagree” with Roland’s conclusion that
“[t]he upstream bridge collapsed as a result of hidden decay below the normal water level
and the supporting earth embankments being scoured away during a thunderstorm.”94 The
affidavit Eric Monzo submitted in opposition to summary judgment did not contradict
Roland’s conclusions regarding what caused the bridge’s collapse.95 It is therefore
undisputed that the pedestrian bridge collapsed, at least in part, because rainwater “scoured
away” portions of the earth embankments supporting the bridge.
The verb “scour” has been defined as meaning “to remove dirt and debris from
something, such as a pipe or ditch” or “to clear, dig, or remove by or as if by a powerful
current of water.” 96 Thus, Roland’s unrebutted opinion was that water from the storm carried
away earth supporting the bridge, contributing to the bridge’s collapse.
93
Id. at 17-18.
94
See A449-50, at 12:16-13:4 (the Monzos’ concession); A148 (Roland’s report).
95
See A220-31.
96
Scour, Merriam-Webster.Com Dictionary (last visited Mar. 4, 2021), https://www.merriam-
webster.com/dictionary/scour; see also Scour, Dictionary.Com (“3. to clear or dig out (a channel,
drain, etc.) as by the force of water, by removing debris, etc.”) (last visited Mar. 4, 2021),
https://www.dictionary.com/browse/scour; Scour, Concise Oxford English Dictionary (12th ed.
2011) (“(of running water) erode (a channel or pool)”).
23
The policy’s earth movement exclusion provides that Nationwide will “not cover loss
to any property resulting directly or indirectly from . . . earth movement due to natural or
unnatural causes, including mine subsidence; earthquake; landslide; mudslide; earth shifting,
rising or sinking.”97 Although the exclusion does not list “erosion” or “scouring,” the plain
meaning of “earth movement” encompasses “scouring” of earth embankments.
“Movement” refers to the verb “move,”98 which means “to change the place or position of,”
“to transfer (something, such as a piece in chess) from one position to another,” or “to cause
to advance.”99 The “scouring” of earth embankments necessarily involves “earth
movement” because it refers to a “change in place or position” of earth supporting the bridge.
Similarly, “shifting” refers to the verb “shift,” which means “to change place or
position.”100 The “scouring” of supporting earth embankments necessarily involves “earth
shifting” because it refers to a “change [in] place or position” of the earth from the supporting
embankment to the earth’s final destination downstream. Therefore, the plain meaning of
“earth shifting” encompasses the “scouring” of supporting earth embankments.
The Monzos do not offer an alternative interpretation of the earth movement
exclusion explaining why “scouring” is not “earth movement.” Instead, the Monzos rely on
97
A280.
98
Movement, Merriam-Webster.com Dictionary (last visited Mar. 4, 2021), https://www.merriam-
webster.com/dictionary/movement.
99
Move, Merriam-Webster.com Dictionary (last visited Mar. 4, 2021), https://www.merriam-
webster.com/dictionary/move.
100
Shift, Merriam-Webster.com Dictionary (last visited Mar. 4, 2021), https://www.merriam-
webster.com/dictionary/shift.
24
a more general objection that the earth movement exclusion is only unambiguous as applied
to the types of earth movement the exclusion specifically lists, such as earthquakes and
volcanic eruptions.101 This argument fails to address the exclusion’s use of the word
“including,”102 a term of expansion indicating that the policy does not provide a
comprehensive list of excluded earth movements. Further, the plain meanings of the
enumerated terms “earth movement” and “earth shifting” encompass the scouring of
supporting earth embankments for the reasons provided above.
The Monzos’ argument that the exclusion does not clearly apply to earth movement
when combined with water is equally unavailing. The earth movement exclusion provides
that Nationwide will not cover losses “resulting directly or indirectly from . . . earth
movement due to natural or unnatural causes . . . .”103 The plain meaning of this exclusion
does not carve out an exception for water-related earth movement. Rather, the exclusion
disclaims coverage whenever some natural or unnatural cause—like rainwater—causes
“earth movement” as defined under the policy.
The types of earth movement the exclusion enumerates further undercuts the
Monzos’ argument. The exclusion lists “mudslide[s]” as an example of excluded earth
101
See Opening Br. 42.
102
A280.
103
Id.
25
movement.104 Mudslides are associated with heavy rain,105 as was the case with the scouring
Roland described.106
Finally, the Monzos include one paragraph suggesting—without citation to the
record—that “[t]he stone and rock that washed away during the storm was not loose stone
or rock, but rather, was a physical part of the” bridge.107 If properly supported, this argument
might have raised some doubt regarding whether the material that the scouring moved was
“earth” to which the earth movement exclusion applies. The record before the Court,
however, does not support the Monzos’ assertion. Roland’s report concluded that “the
supporting earth embankments” were scoured away,108 not the stone and rock composing
the bridge. And the Monzos have not provided the Court with citations to support their
bridge-not-earth theory.
For the reasons provided above, the Court affirms the Superior Court’s holding that
the earth movement exclusion applies to the collapsed bridge. The plain meaning of “earth
movement” encompasses the scouring of earth embankments, and there is no dispute that
the scouring of supporting earth embankments contributed to the bridge’s collapse.
104
Id.
105
See, e.g., Mudslide, Meriam-Webster.com Dictionary (last visited Mar. 4, 2021) (defining
“mudslide” to mean “MUDFLOW”), https://www.merriam-webster.com/dictionary/mudslide;
Mudflow, Merriam-Webster.com Dictionary (last visited Mar. 4, 2021) (“a moving mass of soil
made fluid by rain or melting snow.”), https://www.merriam-webster.com/dictionary/mudflow.
106
A148.
107
Opening Br. 41.
108
A148 (emphasis added).
26
Accordingly, the Superior Court did not err by holding that the earth movement exclusion
unambiguously applies to the collapsed pedestrian bridge.109
b) The ACC Clause prevents the Monzos from receiving
compensation for the collapsed pedestrian bridge
The Superior Court held that the water damage exclusion unambiguously applies to
the collapsed bridge because Roland concluded that the weight of water and water-borne
material contributed to the damage.110 The parties advance various arguments regarding the
water damage exclusion, with the Monzos arguing that the exclusion does not apply111 and
Nationwide arguing the opposite.112
The Court need not address the water damage exclusion to hold that Nationwide was
entitled to summary judgment. The policy contains an ACC Clause, which provides that if
an excluded peril contributes to a loss, “[s]uch a loss is excluded even if another peril or event
contributed concurrently or in any sequence to cause the loss.”113 Thus, because the
undisputed facts show that excluded earth movement contributed to the bridge’s collapse,
Nationwide is entitled to summary judgment regardless of whether the water damage
exclusion applies to the collapsed bridge.
109
The Superior Court’s holding can be read to suggest that erosion, like scouring, is a type of
excluded earth movement. See Monzo, 2020 WL 1317276, at *4. This Court’s opinion does not
address whether the earth movement exclusion unambiguously applies to “erosion.” Instead, the
Court holds more narrowly that “scouring” of supporting earth embankments by fast-moving water
is a type of excluded earth movement.
110
Monzo, 2020 WL 1317276, at *4.
111
Opening Br. 42-46.
112
Answering Br. 15-18.
113
A280 (emphasis added).
27
The Monzos do not propose an alternative interpretation of the ACC Clause that
would allow coverage even though an excluded peril contributed to a loss. Instead, the
Monzos argue that the ACC Clause does not apply to “other structures,” like the pedestrian
bridge, because such structures are “not real or personal property.”114
This argument fails for three reasons. First, the Monzos waived this argument by
waiting until their reply brief to assert that the ACC Clause does not apply to the collapsed
bridge. “Under Supreme Court Rule 14, an appellant waives an argument if he does not
argue its merits within the body of his opening brief.”115 The Monzos’ opening brief does
not argue that the ACC Clause does not apply to the bridge. Instead, the opening brief asserts
that the ACC Clause does not apply to the retaining wall.116 Thus, the Monzos failed to
timely argue that the ACC Clause does not apply to the collapsed bridge.
Second, this argument would defeat the Monzos’ claims for relief. The Monzos seek
compensation for the collapsed bridge under Coverage B of the homeowners insurance
policy. Coverage B “cover[s] accidental direct physical loss to property . . . .”117 Thus, if the
114
Reply Br. 18.
115
Ploof v. State, 75 A.3d 811, 822 (Del. 2013).
116
See Opening Br. 39 (“The Anti-Concurrent Clause . . . does not apply to Option R . . . . There is
little doubt that the drainage system was designed to keep water from backing up into the Main
Residence and to remove subsurface water . . . .” (emphasis added)); id. at 45 (“there could not be a
reading that the anti-concurrent clause would be applicable to the collapsed drainage structure.”
(emphasis added)).
117
A278 (emphasis added).
28
Monzos’ argument is correct, their claim fails because the bridge is not “property” to which
the insurance coverage applies.
Third, the Monzos rely on a cramped definition of “property.” The plain meaning of
“property” is not limited to real or personal property.118 The pedestrian bridge plainly falls
within the plain meaning of “property.”
Accordingly, the Court affirms the Superior Court’s holding that Nationwide was
entitled to summary judgment regarding the collapsed pedestrian bridge. The undisputed
facts establish that excluded earth movement contributed to the collapse, and the ACC
Clause unambiguously applies to the pedestrian bridge.
c) The Superior Court did not err by granting summary
judgment while discovery was ongoing
Because the Court affirms the Superior Court’s grant of summary judgment regarding
the pedestrian bridge, the Court must briefly address two other issues the Monzos raise. First,
the Monzos argue that the Superior Court erred by granting summary judgment before
discovery was complete.119 This argument fails because the Monzos have not identified
other discovery that could change the Court’s conclusion that Nationwide is entitled to
summary judgment regarding the collapsed bridge.
118
See, e.g., Property, Black’s Law Dictionary (10th Ed. 2014) (defining “property” as “any external
thing over which the rights of possession, use, and enjoyment are exercised.”).
119
Opening Br. 26-34.
29
For example, the Monzos complain that “Nationwide in its responses to the
interrogatories sought to improper[ly] [limit] the scope of the litigation to the Homeowners’
Policy and not answer questions completely relating to other policies.”120 The Monzos
reason that this limitation was improper because the homeowners policy was part of a
broader package of “comprehensive insurance coverage,” which included other types of
insurance coverage, such as “an excess liability policy, a marine policy, automobile policy,
and general liability coverage . . . .”121
Discovery related to other insurance policies would not change the outcome of the
motion, however, because the Monzos’ complaint only seeks coverage under the
homeowners’ insurance policy.122 Regardless of whether Nationwide issued other policies
that might cover the damage, the Monzos made a tactical decision to only seek coverage
under the homeowners insurance policy. Thus, discovery regarding other insurance policies
would not have helped the Superior Court answer the question the Monzos’ complaint posed:
whether the homeowners insurance policy covered the collapsed bridge.
Similarly, the Monzos argue that they needed more discovery regarding Papa’s view
that the homeowners insurance policy, or another policy that was part of the comprehensive
120
Id. at 28.
121
A221; Opening Br. 31.
122
See, e.g., A2 (defining the homeowners’ insurance policy as the “Nationwide policy”), A7-8
(seeking a declaratory judgment that “the Nationwide policy” covers the Monzos’ claims), A8
(alleging that a bad faith breach of contract claim on the basis that “Nationwide[] fail[ed] to make
complete and timely payment of insurance proceeds . . . under the Nationwide policy . . . .”).
30
insurance scheme, covered the collapsed bridge.123 Further, the Monzos argue that they
needed more discovery into their discussions and negotiations with Papa regarding flood
insurance and the flood insurance “waiver.”124
This discovery would not change the analysis. The Monzos do not allege that Papa
is a legal expert, and the Superior Court did not need expert testimony to answer the purely
legal question of whether the policy covered the claim. Further, Papa’s views on the potential
for coverage under other insurance policies would not have helped the court determine
whether the homeowners insurance policy covered the collapsed bridge. Thus, the court did
not need to wait to entertain more discovery regarding Papa’s views on coverage.
The Monzos’ argument regarding the flood insurance “waiver” fails for similar
reasons. Even if the Court accepts Eric Monzo’s allegation that he did not intend to waive
flood insurance covering the pedestrian bridge,125 the earth movement exclusion would still
defeat the Monzos claims. The Option R provision—which the Monzos seem to
characterize as flood insurance126—does not alter the earth movement exclusion and does
not abrogate the ACC Clause.127 Thus, the Monzos cannot prevail even if the
123
Opening Br. 29.
124
Id. at 29-31.
125
See A223-24.
126
See, e.g., Reply Br. 21 (“[T]here was no waiver of flood insurance as to the collapsed structures
and Mr. Papa thought that coverage would be afforded. Indeed, . . . Option R coverage re-inserted
coverage and any ambiguity relating thereto must be read in favor of coverage.” (citation omitted)).
127
See, e.g., A304 (“All other provisions of this policy . . . apply.”).
31
Option R Coverage would apply to the water damage that the pedestrian bridge suffered.
The undisputed facts establish that excluded earth movement contributed to the loss.
Finally, the Monzos assert that summary judgment was premature because
Cornerstone, the company that Nationwide hired to conduct the original risk assessment,128
had not responded to a subpoena regarding Cornerstone’s inspection of the Monzos’
residence.129 As with the prior items, discovery regarding a risk assessment authored
approximately six years before the storm would not have helped the Superior Court
determine whether the undisputed facts established that an excluded peril, like earth
movement, contributed to the bridge’s collapse.
For the reasons provided above, the Court holds that the Superior Court’s grant of
summary judgment was not premature. Although discovery was incomplete, the additional
discovery items the Monzos seek would not have changed the Superior Court’s conclusion
that Nationwide was entitled to summary judgment because excluded earth movement
contributed to the bridge’s collapse.
128
See A233.
129
Opening Br. 32.
32
d) The Superior Court did not err by considering Roland’s
report
The Monzos also argue that the Superior Court should not have relied on Roland’s
report because it was incomplete and because the Monzos had not yet decided whether they
intended to call Roland as an expert at trial.130 The Monzos’ arguments are unpersuasive.
Even if Roland’s report was “incomplete,” during the oral argument the Monzos told the
court that they “would not say that we disagree” “with Mr. Roland’s conclusions as to what
caused the damage.”131 This concession applied to Roland’s conclusion that scouring
contributed to the bridge’s collapse,132 and the Monzos do not explain why allowing Roland
more time to draft a more comprehensive report would change his conclusion that scouring
contributed to the collapse.
Similarly, whether the Monzos intended to call Roland as an expert witness has no
bearing on whether the report was admissible for the purposes of assessing Nationwide’s
motion for summary judgment. It is also incongruous to hear the Monzos complain about
the Superior Court’s reliance on Roland’s report. The Monzos hired Roland to investigate
why the bridge collapsed,133 and the affidavit Eric Monzo submitted in opposition to
130
Opening Br. 33-34.
131
A449, at 12:16-20.
132
See A148.
133
See, e.g., A146 (“Dear Mr. Monzo: At your request I visited your property . . . . The purpose of
that visit was to investigate and determine the cause of the collapse of a stone pedestrian foot bridge
that crosses a small stream on your property.” (emphasis added)).
33
summary judgment relied upon Roland’s conclusions to support the Monzos arguments
regarding why the retaining wall collapsed.134
Accordingly, the court did not err by relying on Roland’s report. The Monzos have
not provided the court with any reasonable basis to infer that additional discovery would
change Roland’s conclusions, failed to timely assert any credible argument challenging
admissibility, and relied on Roland’s report to build their own arguments opposing summary
judgment with respect to the retaining wall.
3. The Superior Court erred by granting summary judgment
regarding the collapsed retaining wall
The Superior Court held that Nationwide was entitled to summary judgment
regarding the collapsed retaining wall because there was no dispute that scouring, rainwater,
and water-borne debris contributed to the damage.135 Additionally, the court held that
Option R Coverage was unavailable because: (i) the Monzos did not seek coverage for
damage to the residence; and (ii) the undisputed facts showed that “water ‘backed up’ . . .
from the roof area of the house into the drainage system, . . . not that it ‘[b]acked up through
sewers and drains from outside the dwelling’s plumbing system’ or ‘overflow[ed] from a
. . . system designed to remove subsurface water . . . .”136
134
See A229 (“Unfortunately, the removal of this subsurface water . . ., according to Mr. Roland,
. . . was too much for the drainage system to handle. A portion of the stone drainage wall system
. . . collapsed . . . .” (emphasis added)).
135
Monzo, 2020 WL 1317276, at *3-4.
136
Id. at *4-6.
34
The Monzos argue that the Superior Court erred by granting Nationwide’s motion for
summary judgment. In addition to the arguments discussed above, the Monzos assert that
the earth movement exclusion does not apply to the retaining wall because, unlike the
pedestrian bridge, Roland “d[id] not suggest that the collapse of the drainage system [and
retaining wall] had anything to do with the erosion or scouring of the streambanks.”137
The Monzos argue that the water damage exclusion does not defeat their claim
because the Option R Coverage applies to the water backup that damaged the retaining
wall.138 Thus, although water and water-borne debris contributed to the collapse, the
Monzos assert that such water damage is expressly covered under the policy.
Nationwide answers that the earth movement exclusion applies because the
undisputed facts establish that scouring, a type of excluded earth movement, damaged the
retaining wall.139 Similarly, Nationwide argues that Option R Coverage is unavailable
because such coverage only protects the dwelling140 and because “the cause-in-fact of the
water that . . . ‘backed up’ the ‘drainage system of underground pipes’ was from the storm, a
natural phenomenon.”141
Finally, Nationwide argues that even if the Option R Coverage is available, the
Monzos’ claim still fails because the Roland and Jawad reports both “concluded that debris
137
Opening Br. 45.
138
Id. at 44-46.
139
Answering Br. 18.
140
Id. at 24-25.
141
Id. at 24.
35
from trees was carried by the flood waters in the stream, contributing to the damage to . . . the
retaining wall.”142 Thus, Nationwide reasons that the Monzos’ claim cannot succeed
because there is no dispute that water-borne material, a type of excluded water damage to
which Option R Coverage does not apply, contributed to the retaining wall’s collapse.
The Court holds that Nationwide was not entitled to summary judgment regarding
the collapsed retaining wall. Unlike the pedestrian bridge, the undisputed facts do not
establish that “scouring” contributed to the retaining wall’s collapse. Roland’s report
concluded the wall collapsed because heavy rainfall caused the drainage system to back up:
The heavy rainfall during a short period of time caused
significant drainage from roof areas of the main house and into
the drainage system of underground pipes which open into the
stream via pipes through the stone wall. The overflow of the
rain drainage caused a failure of the drainage system in that
water backed up and resulted in a collapse at the area where
water was being forced out of the pipes and into the creek. It is
this aspect of the front stone wall that collapsed.143
Similarly, Eric Monzo’s affidavit alleged that the retaining wall collapsed because
“the removal of . . . subsurface water from the Main Residence’s foundation . . . coupled with
the run[off] into the gutters and exterior drains . . . was too much for the drainage system to
handle.”144 Neither piece of evidence unambiguously links scouring to the retaining wall.
142
Id. at 17.
143
A148.
144
A229.
36
Further, Roland’s report and Eric Monzo’s affidavit describe a water backup to which
Option R Coverage would apply. The Option R provision states that Nationwide will cover
damage to “covered property caused by or resulting from water or water-borne material
which: 1. backs up through sewers or drains from outside the dwelling’s plumbing system;
or 2. overflows from a sump pump . . . or other system designed to remove subsurface water
or water-borne material from the foundation area.”145
Roland concluded that the water that caused the backup came from the exterior drains
that carry water from the residence’s roof to the stream.146 Similarly, Eric Monzo alleged
that water from the residence’s sump pump system, combined with water from “the gutters
and exterior drains,” overwhelmed the drainage system, causing a water backup that led to
the retaining wall’s collapse.147
The Option R provision applies to this type of water backup. The gutters and exterior
drains that carry rainwater from the roof to the stream are “drains” located “outside the
dwelling’s plumbing system.” And Roland and Eric Monzo both concluded that water from
those systems overwhelmed the pipes that carried water to the stream, causing a water
backup that led to the retaining wall’s collapse. Thus, the record supports a reasonable
inference that a backup, covered under Option R, caused the retaining wall to collapse.
145
Id. (emphasis added).
146
A148.
147
A229.
37
Similarly, Nationwide does not dispute that the residence’s sump pump system is a
“sump pump” as defined under the policy.148 Eric Monzo alleged in his affidavit that the
sump pump overflowed, contributing to the glut of water that overwhelmed the drainage
system.149 Thus, the record supports a reasonable inference that an overflow from a sump
pump system, covered under the second paragraph of Option R, contributed to the water
backup that caused the loss.
Nationwide raises three unpersuasive arguments explaining why the Option R
Coverage does not apply to the retaining wall. First, Nationwide argues that the
Option R Coverage only protects the residence, and therefore does not cover damage to
“other structures,” like the retaining wall.150 This argument contradicts the policy’s plain
meaning. Although the policy does not define the term “covered property,” the Option R
Coverage provision states, “This is the most we will pay for all covered property under”
Coverages A, B, and C.151 A reasonable policyholder would therefore expect that “covered
property” refers to all of the property that the policy covers, including “other structures,” like
148
See Answering Br. 8 (“Appellants did have a small amount of water enter the basement due to
the back up of water from the sump pump. Appellants were able to remedy the problem without any
property damage. Any potential claim related to water in the basement is not part of this case.”).
149
A229.
150
Answering Br. 24.
151
A304 (emphasis added).
38
the retaining wall, to which Coverage B applies. Nationwide does not dispute that the
retaining wall is an “other structure” covered under the policy.152
Nationwide’s argument also conflates a peril that can trigger Option R Coverage—
water that backs up “through sewers or drains from outside the dwelling’s plumbing
system”—with the property that the Option R Coverage insures.153 It may be true that a
policyholder seeking coverage for a backup must show that the water came from a source
“outside the dwelling’s plumbing system.” Nonetheless, if such a covered backup occurs,
Option R Coverage applies to “covered property” regardless of whether that property was
part of the residence or located inside the residence.
Finally, Nationwide fails to explain why the policy uses the broad term “covered
property” if Option R Coverage is limited to the “residence.”154 Nationwide’s own argument
relies on the policy’s use of the term “residence” when describing covered backups to infer
that Option R Coverage only protects the residence.155 This language demonstrates that
Nationwide was aware of the difference between the words “residence” and “covered
property,” and the Court will not assume that Nationwide’s decision to use the broader term
“covered property” was accidental.
152
See, e.g., Answering Br. 13 (“The Policy covers ‘accidental direct physical loss’ to ‘Other
Structures,’ such as the pedestrian bridge and the retaining wall . . . .” (emphasis added)).
153
See id.
154
See A304.
155
Answering Br. 24.
39
Accordingly, the Court rejects Nationwide’s argument that the Option R Coverage
does not apply to the retaining wall because the retaining wall is not part of the residence.
Nationwide did not include such a limitation in the policy, and a reasonable policyholder
would not expect that Option R Coverage is so limited.
Second, Nationwide suggests that Option R Coverage only applies to water from
artificial sources, such as sewer backups, and therefore does not apply to backups caused by
natural phenomena, like rain.156 Nothing in the policy limits Option R Coverage to backups
from artificial sources. The trigger for Option R Coverage is damage to covered property
caused by “[w]ater or water-borne material . . . [that] backs up through sewers or drains . . .
[or] overflows from a sump pump . . . or other system designed to remove subsurface water
or water-borne material from the foundation area.”157 This language does not create the
distinction between natural and artificial sources of water that Nationwide suggests. Adding
a limitation on coverage that Nationwide failed to include in its policy would be contrary to
Delaware law construing ambiguous contract provisions in favor of policyholders.158
Accordingly, the Court rejects Nationwide’s argument that Option R Coverage only applies
to backups caused by artificial events.
Third, Nationwide argues that even if Option R Coverage is available, the Monzos’
claim still fails because other types of excluded water damage contributed to the retaining
156
Id. at 24-25.
157
A304.
158
See, e.g., O’Brien v. Progressive N. Ins. Co., 785 A.2d 281, 286-88 (Del. 2001).
40
wall’s collapse.159 As noted above, the undisputed facts support a reasonable inference that
the sole cause of the retaining wall’s collapse was a water backup from the residence’s
drainage system. Thus, there remain disputed facts regarding whether other types of
excluded water damage contributed to the loss.
Further, the water damage exclusion would not unambiguously apply to tree debris
carried by the force of water into the stream. Although such tree debris might meet the
ordinary definition of “water-borne material,” the policy defines “water-borne material
damage” to mean either: (i) a backup of water-borne material, as defined under Option R,
or (ii) “water or water-borne material below the surface of the ground . . . .”160 This language
does not unambiguously apply to the tree debris that could have damaged the retaining wall.
Tree debris carried in the stream is not “below the surface of the ground” because the stream
is not below the ground. Similarly, tree debris carried into the drainage system would not be
excluded because the Option R Coverage expressly covers that peril.
Thus, the only variety of excluded water damage that might have contributed to the
loss is “flood, surface water, waves, tidal waves, overflow of a body of water, spray from
these, whether or not driven by wind.” Nonetheless, for the reasons provided above, the
undisputed facts do not establish that such water contributed to the retaining wall’s collapse.
159
Answering Br. 25-27.
160
See A280; A304.
41
Accordingly, the Court reverses the Superior Court’s order granting Nationwide
summary judgment regarding the collapsed retaining wall. There are material disputed facts
regarding whether the sole cause of the damage was a water backup to which the policy’s
Option R Coverage applies.
B. The Superior Court Did Not Abuse Its Discretion by Denying the
Monzos’ Motion under Superior Court Civil Rule 59
The Monzos argue that the Superior Court abused its discretion by denying their post-
judgment motion under Rule 59.161 According to the Monzos, the Superior Court should
have granted the motion for three reasons. First, summary judgment was premature because
discovery was ongoing.162 Second, the Superior Court should not have relied on the Roland
report, which was incomplete, lacked authentication, and was inadmissible hearsay.163
Third, the record and the policy did not support summary judgment.164
The Court rejects each argument. For the reasons discussed above, summary
judgment was not premature; the Superior Court did not err in relying on the Roland report;
and, the record and policy supported summary judgment, as explained above. Accordingly,
the Court holds that the Superior Court did not abuse its discretion by denying the Monzos’
Rule 59 motion. The Monzos could not use Rule 59 to rehash arguments that they made, or
could have made, before the court granted summary judgment.
161
Opening Br. 48.
162
Id. at 48-49.
163
Id. at 49-51.
164
Id.
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IV. CONCLUSION
For the reasons provided above, the Court AFFIRMS-in-PART and REVERSES-in-
PART the Superior Court’s March 18, 2020 Memorandum Opinion and Order and
AFFIRMS the Superior Court’s May 13, 2020 Order.
43