Wilfredo Nunez v. Merrimack Mutual Fire Insurance Co. , 2014 R.I. LEXIS 42 ( 2014 )

Supreme Court
No. 2013-129-Appeal.
(PC 07-2434)
Wilfredo Nunez et al. :
v. :
Merrimack Mutual Fire Insurance Co. :
NOTICE: This opinion is subject to formal revision before
publication in the Rhode Island Reporter. Readers are requested to
notify the Opinion Analyst, Supreme Court of Rhode Island, 250
Benefit Street, Providence, Rhode Island 02903, at Telephone 222-
3258 of any typographical or other formal errors in order that
corrections may be made before the opinion is published.
Supreme Court
No. 2013-129-Appeal.
(PC 07-2434)
Wilfredo Nunez et al. :
v. :
Merrimack Mutual Fire Insurance Co. :
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.
OPINION
Chief Justice Suttell, for the Court. The plaintiffs, Wilfredo Nunez and Janette
Campos, appeal from summary judgment entered against them and in favor of Merrimack
Mutual Fire Insurance Company (Merrimack or defendant). This case came before the Supreme
Court for oral argument, pursuant to an order directing the parties to show cause why the issues
raised in this appeal should not be summarily decided. After considering the written and oral
submissions of the parties and after reviewing the record, we conclude that cause has not been
shown and that this case may be decided without further briefing or argument. For the reasons
set forth in this opinion, we affirm the judgment of the Superior Court.
I
Facts and Procedural History
The following facts are undisputed. On July 21, 2004, Wilfredo Nunez and Janette
Campos entered into a purchase and sales agreement for a home located at 25 Oak St. in the City
of Woonsocket. A pre-closing inspection of the home revealed corrosion on the oil heating
system in the basement. The seller agreed to replace the heating system prior to the sale of the
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home and hired a third party 1 to perform the work. Although the third party replaced the boiler
and the oil tank, the oil feed line buried beneath the concrete floor in the basement, which
transfers the oil from the tank to the burner, was not replaced.
On January 19, 2006, Nunez’s sister-in-law accidentally shut off the boiler while in the
basement doing laundry. Nunez then called his fuel oil dealer, Petro Oil, which responded to the
call and noticed the smell of oil and staining at the feed line near the boiler. As a result of this
discovery, plaintiffs initiated claims under their homeowners’ insurance policy issued by
Merrimack.
Merrimack’s investigator, Richard Mansfield of Aegis Engineering Services, Inc.
(Aegis), inspected the site in plaintiffs’ basement and noted in his written report that “[t]he leak
may have occurred over time and possibly prior to the insured[s’] purchase of the property.”
Mansfield further noted that “had [the system] been installed properly and in accordance with
municipal codes, the feed line would have been replaced and the leak would likely have been
eliminated or prevented prior to the insured[s’] purchase of the property.” On February 1, 2006,
Merrimack’s testing firm, Taraco Precision Testing, Inc. (Taraco), pressure-tested and removed
the feed line. In a letter to Merrimack’s adjuster dated February 6, 2006, Mansfield reported the
findings of Aegis and Taraco. The letter stated that the feed line was “severely corroded in
several areas” and that “the corroded area[] was moist with fuel oil.” Mansfield’s letter further
noted that “[his] observations and the Taraco pressure test indicate that the feed line has a very
slow, weeping, corrosion leak * * *. It appears that the line has probably been leaking slowly for
1
The name of the company hired to replace the heating system is not clear from the record.
Merrimack refers to the party as Petro Holdings, Inc. Nunez, in a complaint filed in a separate
matter, refers to the company as John Doe Corporation. In any event, the third-party repairer is
not a party in the instant case, and its identity is not relevant to this appeal.
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some time and was likely leaking before the insured purchased the home in July 2004.”
Merrimack thereafter denied plaintiffs’ claim.
As grounds for denial, Merrimack relied upon a provision in plaintiffs’ insurance policy
that purports to exclude loss caused by corrosion. The pertinent language of the insurance policy
reads as follows:
“SECTION I – PERILS INSURED AGAINST
“COVERAGE A – DWELLING and COVERAGE B – OTHER
STRUCTURES
“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:
“* * *
“(3) Smog, rust or other corrosion, mold, wet or dry rot[.]”
On May 11, 2007, plaintiffs filed a complaint against Merrimack in Superior Court
alleging breach of contract. On April 29, 2010, Merrimack filed a motion for summary judgment
pursuant to Rule 56 of the Superior Court Rules of Civil Procedure. 2 On April 5, 2011, after a
brief hearing on the motion, the trial justice issued a bench decision granting Merrimack’s
motion for summary judgment and dismissing plaintiffs’ claims with prejudice. Final judgment
entered on April 15, 2011.
The trial justice found that the language of the insurance policy clearly and
unambiguously stated that “there is no coverage for loss caused by wear and tear, marring,
deterioration and discharge of a pollutant.” In granting Merrimack’s motion for summary
2
Although it appears that plaintiffs filed a cross-motion for summary judgment, that motion is
not contained in the lower court file. However the file does contain Merrimack’s objection to
plaintiffs’ motion, and the trial justice ultimately denied plaintiffs’ cross-motion in an order filed
on April 8, 2011.
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judgment, the trial justice found that the undisputed evidence indicated that “plaintiffs’ claim
was caused by gradual corrosion of an oil fuel feed line, not a sudden or accidental loss, and
therefore is barred by the clear and unambiguous terms of the policy.” The plaintiffs thereafter
filed a timely notice of appeal.
II
Standard of Review
“This Court reviews the grant of summary judgment ‘de novo, employing the same
standards and rules used by the hearing justice.’” Miller v. Saunders, 80 A.3d 44, 47-48 (R.I.
2013) (quoting Carreiro v. Tobin, 66 A.3d 820, 822 (R.I. 2013)). “We will affirm a lower
court’s decision only if, after reviewing the admissible evidence in the light most favorable to the
nonmoving party, we conclude that no genuine issue of material fact exists and that the moving
party is entitled to judgment as a matter of law.” Id. at 48 (quoting Carreiro, 66 A.3d at 822).
“[T]he nonmoving party bears the burden of proving by competent evidence the existence of a
disputed issue of material fact * * * .” Id. (quoting The Law Firm of Thomas A. Tarro, III v.
Checrallah, 60 A.3d 598, 601 (R.I. 2013)).
III
Analysis
The plaintiffs argue on appeal that the “cause of this loss is indisputably the unexpected,
cracking/bulging or failure of [plaintiffs’] hot water system,” and that the loss is therefore
covered under their policy. In support, plaintiffs maintain that their loss is covered by a
provision in the insurance policy, which provides in pertinent part:
“SECTION I – PERILS INSURED AGAINST
“* * *
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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:
“* * *
“(5) Discharge, dispersal, seepage, migration, release or escape of
pollutants unless the discharge, dispersal, seepage, migration,
release or escape is itself caused by a Peril Insured Against under
Coverage C of this policy.
“* * *
“COVERAGE C – PERSONAL PROPERTY
“We insure for direct physical loss to the property described in
Coverage C caused by a peril listed below unless the loss is
excluded in SECTION I – EXCLUSIONS.
“* * *
“13. Sudden and accidental tearing apart, cracking, burning or
bulging of a steam or hot water heating system, an air conditioning
or automatic fire protective sprinkler system, or an appliance for
heating water.”
The plaintiffs also cite to Textron, Inc. v. Aetna Casualty and Surety Co., 754 A.2d 742 (R.I.
2000), which they contend stands for the proposition that the word “sudden,” in the context of a
pollutant-exclusion clause, simply means “‘unexpected’ or unforeseen from the standpoint of the
insured.” Therefore, they argue that because the loss was due to the release of oil from the oil
feed line, and further, because the loss was unexpected from their standpoint, i.e. “sudden,” the
loss is covered under the policy.
“In interpreting the contested terms of the insurance policy, we are bound by the rules
established for the construction of contracts generally.” Koziol v. Peerless Insurance Co., 41
A.3d 647, 650 (R.I. 2012) (quoting Malo v. Aetna Casualty and Surety Co., 459 A.2d 954, 956
(R.I. 1983)). “It is well-settled that this Court ‘shall not depart from the literal language of the
policy absent a finding that the policy is ambiguous.’” Id. (quoting Lynch v. Spirit Rent-A-Car,
Inc., 965 A.2d 417, 425 (R.I. 2009)). “Indeed, as this Court often has said, we shall ‘refrain from
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engaging in mental gymnastics or from stretching the imagination to read ambiguity into a policy
where none is present.’” Id. at 651 (quoting Bliss Mine Road Condominium Association v.
Nationwide Property and Casualty Insurance Co., 11 A.3d 1078, 1083 (R.I. 2010)).
It is clear to us that the literal language, specifically, “[w]e do not insure, however, for
loss * * * [c]aused by * * * [s]mog, rust or other corrosion,” clearly and unambiguously states
that the policy does not cover against losses caused by corrosion. Merrimack presented evidence
from Aegis and Taraco indicating that the leak in plaintiffs’ oil feed line was caused by a slow,
gradual corrosion. The plaintiffs, however, offered no evidence to the contrary. To wedge the
loss resulting from the gradually corroded oil feed line into the category of “[s]udden and
accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system”
would require the creation of an ambiguity where one does not exist.
Further, assuming arguendo that we were to adopt the plaintiffs’ interpretation of Textron
and determine that the loss was “sudden and accidental” from their perspective, the damage
would nevertheless remain uncovered under the policy. The plain language of the policy
protects against loss caused by the “[s]udden and accidental tearing apart, cracking, burning or
bulging of a steam or hot water heating system.” The plaintiffs, however, failed to present any
evidence indicating that the loss was due to such a tearing apart, cracking, burning or bulging;
therefore, whether or not the damage was sudden and accidental is of no moment. Because the
undisputed evidence indicates that the damage to the plaintiffs’ property was caused by
corrosion—damage not covered by their insurance policy—there remain no genuine issues of
material fact and Merrimack is entitled to judgment as a matter of law.
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IV
Conclusion
For the reasons set forth above, the judgment of the Superior Court is affirmed, and the
record of this case shall be returned thereto.
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RHODE ISLAND SUPREME COURT CLERK’S OFFICE
Clerk’s Office Order/Opinion Cover Sheet
TITLE OF CASE: Wilfredo Nunez et al. v. Merrimack Mutual Fire Insurance Co.
CASE NO: No. 2013-129-Appeal.
(PC 07-2434)
COURT: Supreme Court
DATE OPINION FILED: April 17, 2014
JUSTICES: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.
WRITTEN BY: Chief Justice Paul A. Suttell
SOURCE OF APPEAL: Providence County Superior Court
JUDGE FROM LOWER COURT:
Associate Justice Sarah Taft-Carter
ATTORNEYS ON APPEAL:
For Plaintiffs: Fred L. Mason, Jr., Esq.
For Defendant: Elizabeth A. Bourke, Esq.