Secura Insurance v. Black's Heritage Farm, Inc. ( 2021 )

IN THE COURT OF APPEALS OF IOWA
No. 19-1623
Filed January 21, 2021
SECURA INSURANCE, A Mutual Company,
Plaintiff-Appellee,
vs.
BLACK'S HERITAGE FARM, INC., BLACK'S ENTERPRISES, INC., DUANE
BLACK, NORINE BLACK, CHAD BLACK,
Defendants-Appellants,
and
GERALD BICE and OLD SCHOOL RENOVATIONS, LLC,
Defendants.
________________________________________________________________
Appeal from the Iowa District Court for Story County, James C. Ellefson,
Judge.
Defendants appeal the district court’s determination they are not entitled to
a defense under the policy of liability insurance. AFFIRMED.
William W. Graham and Elissa M. Holman (until withdrawal) of Duncan,
Green, P.C., Des Moines, for appellants.
Michael S. Jones of Patterson Law Firm, L.L.P., Des Moines, for appellee.
Considered by Bower, C.J., and Doyle and Schumacher, JJ.
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BOWER, Chief Judge.
Black’s Heritage Farm, Inc., Black’s Enterprises, Inc., Duane Black, Norine
Black, and Chad Black (collectively “the Blacks”) appeal a district court summary
judgment ruling that Secura Insurance (Secura) had no duty to indemnify or defend
the Blacks in a suit brought by Gerald Bice and Old School Renovations, LLC
(collectively “the Tenants”). The Blacks did not preserve error on their theory of
coverage and, therefore, we affirm.
I. Background Facts & Proceedings
The Blacks owned property on both the east and west side of 530th Avenue
outside of Ames. The Blacks lived at 26156 530th Avenue, the property on the
east side of the road. The property at 26107 530th Avenue, on the west side of
the road, had several buildings the Blacks rented to other persons.
In April 2018, the Tenants occupied a building on the Blacks’ rental property
with equipment, tools, and other possessions stored in the building. The Blacks
kept a pile of trees, wood, and mulch (“woodpile land”) approximately 100 feet
south of the building used by the Tenants. A fence separated the woodpile area
from the Tenants’ building.1 This woodpile had reportedly been smoldering since
December 2017.
On April 30, 2018, a fire consumed the Tenants-occupied building and the
Tenants’ possessions on the rental property, as well as a pile of timber the Blacks
had been storing between the building and the woodpile land. An investigation
1 Duane Black submitted an affidavit the woodpile land was a separate piece of
property, vacant land, and not held for development. Secura’s argument treats the
rental property and woodpile land as a single property. Nothing in the record
indicates the woodpile land had a separate address from the rental property.
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identified the smoldering woodpile as the probable cause of the fire. The Tenants
filed suit against the Blacks for damages alleging, among other things, that the
Blacks “had exclusive control and management over . . . the burning woodpile(s)
that was on said property” and the fire “would not have occurred if [the Blacks] had
taken ordinary and reasonable care in the control and management of the burning
woodpile(s).”
The Blacks had a farm insurance policy with Secura for forty acres of land
located at 26156 530th Avenue (“insured property”), on the east side of the road
and across from the rental property.2 The policy includes the owner-occupied
house, outbuildings, and farm personal property. The “named insured” on the
policy is Black’s Heritage Farm. The Blacks did not maintain a separate insurance
policy for the rental property or woodpile land.
Secura initially provided the Blacks with defense counsel in the Tenants’
suit subject to a reservation of rights. In November, Secura filed a petition for
declaratory judgment to determine its rights and responsibilities under the policy.
In June 2019, Secura filed a motion for summary judgment, asserting the Tenants’
property damage was excluded or otherwise not covered by the insurance policy
and that Secura had no duty to defend the Blacks.
Following an unreported telephonic hearing, the district court granted
Secura summary judgment, determining: (1) the fire did not arise from the insured
2 The Blacks had allowed a separate commercial liability policy for the insured
property to lapse in early 2017. There is no evidence in the record of any insurance
policy listing the rental property or the woodpile land as insured.
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premises and was not covered under the policy, and (2) Secura had no duty to
defend the Blacks against the Tenants’ claims.
The Blacks appeal, asserting the woodpile land was part of the insured
premises, the damages should be covered, and Secura has a duty to defend them
in the Tenants’ lawsuit.
II. Insurance Policy
The insurance policy at issue is a “Farmowners protector” policy, covering
forty acres, an owner-occupied house, and three outbuildings at 26156 530th
Avenue. The policy includes the following relevant provisions.3
DEFINITIONS (IOWA AMENDATORY ENDORSEMENT)
8. “Insured premises” means:
a. insured farm locations and residence premises
described in the Declarations.
b. other land, including farm premises, the insured first
acquires or newly leases during the policy period and uses for
farming.
Under Section II, “insured premises” also means:
a. the part of other premises acquired by you during the
policy period which you intend to use as a residence premises
or farm;
b. the part of other premises, other structures, and
grounds used by you as a residence and:
(1) which is shown in the Declarations; or
(2) which is acquired by you during the policy
period for your use as a residence;
c. any part of a premises:
(1) not owned by an insured; and
(2) where an insured is temporarily residing;
d. vacant land (other than land held for development),
owned by, rented to, or used by an insured, including land
where a residence or farm structure is being built for the use
of an insured;
e. All access ways adjoining the insured premises;
f. individual or family cemetery plots or burial vaults of
an insured; or
3Emphasized language in the policy excerpts is found in the original and are terms
defined in the policy.
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g. any part of a premises occasionally rented to an
insured for other than business or farming use.
SECTION II—LIABILITY PROTECTION
COVERAGE G—FARMERS PERSONAL LIABILITY
If a claim is made or a suit is brought against an insured for damages
because of bodily injury or property damage caused by an
occurrence to which this coverage applies, we will:
1. pay up to our limit of liability for the damages for which the
insured is legally liable. “Damages” include prejudgment interest
awarded against the insured.
2. provide a defense at our expense by counsel of our choice,
even if the suit is groundless, false, or fraudulent. We may
investigate any occurrence and settle any resulting claim or suit at
our discretion. OUR DUTY TO SETTLE OR DEFEND ENDS WHEN
THE AMOUNT WE PAY FOR DAMAGES REULTING FROM THE
OCCURRENCE EQUALS OUR LIMIT OF LIABILITY.
SECTION II—EXCLUSIONS
1. Coverage[ ] G—Farmers Personal Liability . . . do[es]
not apply to bodily injury or property damage:
....
b. arising out of business pursuits of an insured or the
rental or holding for rental of any part of any premises by an
insured.
....
d. arising out of a premises or farming operations from
a premises:
(1) owned by an insured;
(2) rented to an insured; or
(3) rented to others by an insured;
that is not an insured premises.
III. Standard of Review
“We review a district court’s summary judgment ruling that interprets an
insurance policy for correction of errors at law.” Just v. Farmers Auto. Ins. Ass’n,
877 N.W.2d 467, 471 (Iowa 2016) (citation omitted). “A grant of summary
judgment is appropriate when there are no genuine issues of material fact and the
moving party is entitled to judgment as a matter of law.” Id. “Generally,
interpretation of an insurance policy is a question of law.” Id.6
IV. Analysis
It was the Blacks’ burden to prove the land was covered by the insurance
policy. See Salem United Methodist Church v. Church Mut. Ins. Co., No 16-0170,
2017 WL 512494, at *1 (Iowa Ct. App. Feb. 8, 2017). The woodpile land is not part
of the property at the address listed as “Insured farm locations and residence
premises” on the policy. The Blacks assert the woodpile land was covered by the
policy for liability protection purposes under the “vacant land” alternative definition
of “insured premises.” They claim “a reading of the entire liability policy, including
its endorsements, establishes unambiguously that th[e] vacant land owned by an
insured is an additional part of the ‘insured premises.’” Under their interpretation,
the fire arose from an insured premises and the Tenants’ damage is covered under
the policy for the insured property.
The district court based its decision on the policy provision excluding
property damage arising out of a premises “that is not an insured premises,” finding
land on the west side of the road was not covered under the policy for the insured
property. In its statement of facts, the court’s order notes, “The defendants have
not pointed out any policy language that would expand the insured premises
beyond the [forty] acres on the east side of 530th Avenue, at the address 26156
530th Avenue.” The district court’s ruling made no mention of the vacant land
provision of the insured premises definition in its statement of facts or conclusions
of law.
“It is a fundamental doctrine of appellate review that issues must ordinarily
be both raised and decided by the district court before we will decide them on
appeal.” Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002). “When a district
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court fails to rule on an issue properly raised by a party, the party who raised the
issue must file a motion requesting a ruling in order to preserve error for appeal.”
Id. “[A] proper rule 1.904(2) motion asks the district court to amend or enlarge
either a ruling on a factual issue or a ruling on a legal issue raised in the context
of an underlying factual issue based on the evidence in the record.” Homan v.
Branstad, 887 N.W.2d 153, 161 (Iowa 2016). “Nonetheless, when a party has
presented an issue, claim, or legal theory and the district court has failed to rule
on it, a rule 1.904(2) motion is [the] proper means by which to preserve error and
request a ruling from the district court.” Id.A finding of the applicability of the vacant-land provision to the woodpile
land is a predicate to the Blacks’ claim to coverage under their Secura insurance
policy. The record fails to show the district court considered the vacant-land
provision in its ruling. The Blacks did not file a motion for the court to reconsider,
enlarge, or amend its order to address the vacant-land provision and attendant
insurance coverage. Accordingly, the issue is not preserved for our review. See
Meier, 641 N.W.2d at 541.
AFFIRMED.