Hicks v. American Integrity ( 2018 )


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  •          IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
    FIFTH DISTRICT
    NOT FINAL UNTIL TIME EXPIRES TO
    FILE MOTION FOR REHEARING AND
    DISPOSITION THEREOF IF FILED
    HUGH HICKS,
    Appellant,
    v.                                                    Case No. 5D17-1282
    AMERICAN INTEGRITY INSURANCE
    COMPANY OF FLORIDA,
    Appellee.
    ________________________________/
    Opinion filed February 23, 2018
    Appeal from the Circuit Court
    for Orange County,
    Bob Leblanc, Judge.
    Mark A. Nation and Paul W. Pritchard, of
    The Nation Law Firm, Longwood, for
    Appellant.
    Andrew P. Rock and Julia G. Young, of The
    Rock Law Group, P.A., Maitland, for
    Appellee.
    PER CURIAM.
    Hugh Hicks appeals the summary final judgment granted in favor of American
    Integrity Insurance Company of Florida (“AIIC”) in his suit for breach of contract. Hicks
    contends that the trial court misapplied his insurance policy’s provision excluding
    damages caused by “[c]onstant or repeated seepage or leakage of water . . . over a period
    of 14 or more days.” For the following reasons, we agree and reverse.
    Hicks purchased an “all risks” policy from AIIC, which covered his home from May
    31, 2012, until May 31, 2013. 1     In September 2012, while Hicks was out of town, the
    water supply line to his refrigerator began leaking, slowly at first, then steadily increasing,
    until, by the time Hicks returned on October 25, the supply line was discharging almost
    one thousand gallons each day. Hicks filed a claim with AIIC, but after AIIC’s expert
    determined that the pipe had been leaking for five weeks or more, AIIC denied the claim,
    quoting the following provision of the policy: “We do not insure . . . for loss . . . [c]aused
    by . . . [c]onstant or repeated seepage or leakage of water . . . over a period of 14 or more
    days.”
    Hicks sued for breach of contract, and AIIC pleaded in an affirmative defense that
    this provision excluded Hicks’s loss. AIIC then filed a motion for summary judgment,
    arguing that because the leak occurred over a period of more than fourteen days, the
    provision unambiguously excluded coverage for all of Hicks’s losses. Hicks filed his own
    motion for summary judgment, on three issues: that Hicks sustained a physical loss
    during the policy period, that all losses occurring within the first thirteen days were
    covered, and that Hicks was entitled to $40,926.77 for losses occurring within the first
    thirteen days of the leak. Hicks attached to his motion an extensive report from a forensic
    general contractor, which attempted to calculate the amount of damage to Hicks’s home
    1
    An all-risks insurance policy covers “all losses not resulting from misconduct or
    fraud unless the policy contains a specific provision expressly excluding the loss from
    coverage.” Hudson v. Prudential Prop. & Cas. Ins., 
    450 So. 2d 565
    , 568 (Fla. 2d DCA
    1984).
    2
    within the first thirteen days of the leak. At a hearing on the motions, the trial court told
    Hicks, “Basically, you’re asking [this court] to say whether the policy covered the loss in
    the first 13 days . . . . It might, but I’m not so sure that the time frame of these particular
    facts would allow for that determination.” The trial court then granted summary judgment
    in AIIC’s favor.
    On appeal, Hicks contends that the exclusion applies only to losses “caused by
    water on day 14 and onward.” Hicks relies on Wheeler v. Allstate Insurance, 687 F. App’x
    757, 759 (10th Cir. 2017), in which Allstate denied Wheeler’s claim under a substantially
    similar exclusion clause. A leak in Wheeler’s seasonal cabin went undiscovered for
    several months, by which point the basement had been flooded with five inches of water.
    
    Id. At trial,
    Wheeler argued that he was entitled to coverage for the first week of damage
    caused by the leak. 
    Id. at 762.
    The court in Wheeler reversed the trial court’s grant of
    summary judgment in Allstate’s favor, finding that the “claimed damage was not caused
    by leakage over a period of 14 days or longer; it was caused by leakage over a period of
    less than 14 days.” 
    Id. at 767.
    Hicks also relies on Coutts v. Florida Peninsula Insurance,
    
    23 Fla. L. Weekly Supp. 1012b
    (Fla. 11th Cir. Ct. Mar. 4, 2016), in which the plaintiff sued
    her insurance company after it denied her claim based on a substantially similar exclusion
    clause. The circuit court held, “[I]f the ‘loss’ was realized between days 1 and 13 it is not
    excluded, even though the ‘condition’ may have remained on the property for 14 days or
    longer. Thus, the stipulation that the home was exposed to water for 14 or more days
    proved just that—and nothing more.” 
    Id. In light
    of the general principle that insurance policy provisions susceptible to more
    than one interpretation should be construed liberally in favor of the insured and strictly
    3
    against an insurer, and that exclusionary clauses should be read even more narrowly, we
    hold that an insurance policy excluding losses caused by constant or repeated leakage
    or seepage over a period of fourteen days or more does not unambiguously exclude
    losses caused by leakage or seepage over a period of thirteen days or less. See
    Container Corp. of Am. v. Md. Cas. Co., 
    707 So. 2d 733
    , 736 (Fla. 1998); State Farm
    Mut. Auto. Ins. v. Pridgen, 
    498 So. 2d 1245
    , 1248 (Fla. 1986); FCCI Ins. v. Horne, 
    890 So. 2d 1141
    , 1143 (Fla. 5th DCA 2004); Hrynkiw v. Allstate Floridian Ins., 
    844 So. 2d 739
    ,
    741 (Fla. 5th DCA 2003). It is not unambiguously clear that a provision excluding losses
    caused by constant leakage of water over a period of fourteen or more days likewise
    excludes losses caused by constant leakage of water over a period of less than fourteen
    days.    And ambiguous insurance provisions—those susceptible to more than one
    meaning, one providing coverage and the other denying it—must be construed against
    the insurer and in favor of coverage. Wash. Nat’l. Ins. v. Ruderman, 
    117 So. 3d 943
    , 950
    (Fla. 2013) (“[W]here, as here, one reasonable interpretation of the policy provisions
    would provide coverage, that is the construction which must be adopted.”); 
    Pridgen, 498 So. 2d at 1248
    .
    Moreover, the trial court’s express reasoning for granting summary judgment in
    AIIC’s favor—that the policy “might” cover “the loss in the first 13 days,” but that the trial
    court was nevertheless “not so sure that the time frame of these particular facts would
    allow for that determination”—was flawed.         In an all-risks policy, once the insured
    establishes a loss within the terms of a policy, the burden shifts to the insurer to prove
    that a particular loss arose from an excluded cause. Mejia v. Citizens Prop. Ins., 
    161 So. 4
    3d 576, 578 (Fla. 2d DCA 2014). Whether such a determination is possible is a genuine
    issue of material fact precluding summary judgment.
    We therefore reverse the summary judgment entered in favor of AIIC and remand
    this case to the trial court to enter partial summary judgment in Hicks’s favor on the sole
    issue of coverage within the first thirteen days of the leak, the extent of the losses to be
    determined at trial. As for losses occurring after the first thirteen days, the burden will be
    on AIIC to prove that a particular loss was sustained after the thirteenth day and is
    therefore not covered under the language of the exclusion provision.
    REVERSED and REMANDED.
    SAWAYA, EVANDER and LAMBERT, JJ., concur.
    5