Opinion
No. 350529
09-10-2020
HARRY KIRK, and TYKEIRA KIRK, Plaintiffs-Appellants, v. ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant-Appellee.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Oakland Circuit Court
LC No. 2018-167933-CK Before: LETICA, P.J., and FORT HOOD and GLEICHER, JJ. PER CURIAM.
Plaintiffs, Harry Kirk and Tykeira Kirk, appeal as of right the trial court's order granting summary disposition under MCR 2.116(C)(10) (no genuine issue of material fact) to defendant, Allstate Property and Casualty Insurance Company, in this breach of insurance contract action. We affirm.
I. BACKGROUND
This case arises from defendant's denial of a homeowner's insurance claim made by plaintiffs after a significant amount of stucco fell off their house in 2017. In 2014, Harry filed suit against his former insurer, Citizens Insurance Company, alleging that Citizens wrongfully denied coverage for a crack in the stucco under the home's disc-shaped balcony. During that case, a forensic engineer filed a report attributing the crack to long-term water infiltration of the stucco. Harry's case against Citizens settled and, in 2016, he entered into a new homeowner's insurance contract with defendant.
In May 2017, plaintiffs were startled by a loud noise. Harry saw that a significant portion of the stucco under the balcony had fallen off, exposing steel framing underneath. Defendant's agent inspected the property and determined that plaintiffs' loss was excluded by clauses in the insurance contract that barred claims caused by aging, weathering, and the insured's failure to maintain the property. Plaintiffs filed the instant lawsuit, alleging that defendant had breached the contract because the loss constituted a sudden and unexpected collapse, which was covered under the contract.
Plaintiffs obtained estimates from two contractors who cited long-term water intrusion of the stucco as the cause of the damage. An insurance adjuster and engineer inspected the property, took photographs, wrote reports, and concluded that an improper drainage system and improper sealing of the stucco had allowed water to corrode the steel frame that supported the stucco. The engineer, after reviewing photographs of the subject area taken in 2013, concluded that the water damage long predated Harry's claim against Citizens.
Defendant moved for summary disposition, arguing that exclusionary clauses in the contract unambiguously excluded damage caused by water seepage, aging and deterioration, and the insured's failure to maintain the property. Plaintiffs argued that the exclusionary clauses were ambiguous and that their loss should be covered as a sudden and unexpected collapse because plaintiffs were startled by the sudden event of the stucco falling. Plaintiffs did not present any evidence to rebut defendant's evidence that long-term water damage caused the loss. The trial court granted defendant's motion for summary disposition.
This appeal followed.
II. ANALYSIS
Plaintiffs argue that the trial court erred in determining that several exclusionary clauses in the insurance contract barred plaintiffs' claim because the clauses were ambiguous, and the trial court failed to construe them in the light most favorable to plaintiffs. We disagree.
A. STANDARD OF REVIEW
"This Court reviews a trial court's decision regarding summary disposition pursuant to MCR 2.116(C)(10) de novo." Vushaj v Farm Bureau Gen Ins Co of Michigan, 284 Mich App 513, 514; 773 NW2d 758 (2009). "A motion under MCR 2.116(C)(10) . . . tests the factual sufficiency of a claim." El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 160; 934 NW2d 665 (2019). "[A] trial court must consider all evidence submitted by the parties in the light most favorable to the party opposing the motion." Id. "A motion under MCR 2.116(C)(10) may only be granted when there is no genuine issue of material fact." Id. "A genuine issue of material fact exists when the record leaves open an issue upon which reasonable minds might differ." Id. (quotation marks omitted).
B. DISCUSSION
"A contract is said to be ambiguous when its words may reasonably be understood in different ways." Vushaj, 284 Mich App at 515 (quotation marks omitted). "If a fair reading of the entire contract of insurance leads one to understand that there is coverage under particular circumstances and another fair reading of it leads one to understand there is no coverage under the same circumstances the contract is ambiguous and should be construed against its drafter and in favor of coverage." Id.
Plaintiffs argue that the following provision from the insurance contract is ambiguous and should have been interpreted to cover their loss:
10. Collapse
We will cover at the residence premises:
a) the entire collapse of a covered building structure;
b) the entire collapse of part of a covered building structure; and
c) direct physical loss to covered property caused by a) or b) above.
For coverage to apply, the collapse of a building structure specified in a) or b) above must be a sudden and accidental direct physical loss caused by one of the following:
a) a loss we cover under Section I, Personal Property Protection-Coverage C;
b) weight of persons, animals, equipment or contents;
c) weight of rain, snow or ice which collects on a roof;
d) defective methods or materials used in construction, repair, remodeling or renovation, but only if the collapse occurs in the course of such construction, repair, remodeling or renovation.
Collapse, as referenced herein, means the covered building structure or part of the covered building structure has actually fallen down or fallen into pieces unexpectedly or instantaneously. It does not include settling, cracking, shrinking, bulging, expansion, sagging, or bowing. Furthermore, collapse does not include or mean substantial structural impairment or imminent collapse.
Plaintiffs argue that the provision is ambiguous because it does not define the term "sudden," which is synonymous with the terms "unexpectedly and instantaneously." Therefore, plaintiffs argue, their loss was covered because the stucco fell in a discrete, instantaneous event, which surprised them. Plaintiffs' argument ignores the provision that a "collapse" must be attributable to an enumerated cause, a) through d) above, to be covered under the contract. Plaintiffs do not contend that one of the enumerated causes applies to their loss or that they produced any evidence of such a cause. Therefore, the "collapse" provision, read in its entirety and within the context of the whole insurance contract, is unambiguous, and, therefore, the trial court did not err in determining that plaintiffs' loss was not covered by the provision.
Next, plaintiffs argue that the following exclusion did not apply to their loss:
A. Under Dwelling Protection-Coverage A and Other Structures Protection-Coverage B of this policy, we do not cover any loss which consists of, is caused by, or would not have occurred but for, one or more of the following excluded events, perils, or conditions. Such loss is excluded regardless of: a) the cause or source of
the excluded event, peril or condition; b) any other causes contributing concurrently or in any sequence with the excluded event, peril or condition to produce the loss; or c) whether the excluded event peril or condition involves isolated or widespread damage, arises from natural, man-made or other forces, or arises as a result of any combination of these forces.
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4. Water or any other substance on or below the surface of the ground. This includes water or any other substance which exerts pressure on, or flows, seeps or leaks through any part of the residence premises.
Plaintiffs argue that this provision does not exclude their loss because water below the surface of the ground did not cause the loss. This argument ignores the phrase "[t]his includes water or any other substance which exerts pressure on, or flows, seeps or leaks through any part of the residence premises." The contract defines "residence premises" as "the dwelling, other structures and land located at the address stated on the Policy Declarations." Defendants attached to their motion three expert reports attributing damage to the stucco to long-term water infiltration. An engineer who inspected the property explained that the home's "gutter system was incomplete and poorly maintained." The stucco was improperly sealed and "water could flow behind the cementitious siding." Ultimately, the iron-based framing under stucco corroded and "lost the ability to support the loads imposed by the cementitious covering[, which] fell away." Defendant also attached to its motion numerous photographs of the subject area, taken as long ago as 2013, showing rust and staining consistent with water damage. Plaintiffs did not submit any evidence of an alternative cause.
While it may be awkward to label water that leaks through the exterior walls of a dwelling as "[w]ater . . . on or below the surface of the ground," the insurance contract does so unambiguously. "If a contract, however, inartfully worded or clumsily arranged, fairly admits of but one interpretation it may not be said to be ambiguous or, indeed, fatally unclear." Vushaj, 284 Mich App at 515. Defendant produced voluminous evidence that plaintiffs' loss was caused by long-term water infiltration into the stucco, and plaintiffs did not produce any evidence to the contrary. Therefore, the trial court did not err in determining that plaintiffs' claim was barred by the clause excluded damage caused by "water . . . which exerts pressure on, or flows, seeps or leaks through any part of the residence premises."
Lastly, plaintiffs argue that the following exclusionary clause is ambiguous and should not have been construed to exclude their claim. The clause reads:
D. Under Dwelling Protection-Coverage A and Other Structures Protection-Coverage B of this policy, we do not cover any loss consisting of or caused by one or more of the following excluded events, perils, or conditions. Such loss is excluded regardless of whether the excluded event peril or condition involves
isolated or widespread damage, arises from natural, man-made or other forces, or arises as a result of any combination of these forces.
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5. a) Wear and tear, aging, marring, scratching, deterioration, inherent vice, or latent defect[.]
Plaintiffs argue that Black's Law Dictionary (10th ed) defines "deterioration" as "the depreciation of property resulting from its reasonable use"; therefore, the term is ambiguous because reasonable persons would expect to be covered by homeowner's insurance for reasonable use of their property. This argument does not interpret the term "deterioration" with its intended meaning in the context of the provision. Plaintiffs ignore the other causes paragraph D excluded:
1. The failure by any insured person to take all reasonable steps to save and preserve property when the property is endangered by a cause of loss we cover.
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4. Collapse, except as specifically provided in Section I—Additional Protection under item 10, "Collapse."
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5. a) Wear and tear, aging, marring, scratching deterioration, inherent vice, or latent defect;
b) mechanical breakdown;
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d) rust or other corrosion;
e) settling, cracking, shrinking, bulging or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings[.]
Section D, read as a whole, unambiguously excludes losses attributable to long-term processes of weathering and aging and the insured's failure to maintain the property. Defendant produced evidence that the subject area of plaintiffs' home had already sustained long-term water damage in the year 2013. Despite Harry's claim at his deposition that "we always maintained the property," neither he nor Tykeira could remember how long it had been since any repairs or maintenance activities were conducted on the home. In 2013, Harry filed a complaint against his former insurer that was materially identical to the complaint in this case. That case settled, and although Harry "believe[d]" that the settlement money had been used for repairs of the subject area, he did not know if he had any documentation of those repairs. No documentation of such repairs was ever produced. The photographs and expert reports overwhelmingly suggest that no such repairs or maintenance activities had taken place. Plaintiffs did not submit any evidence to the contrary. Therefore, the trial court did not err in granting summary disposition to defendant because plaintiffs failed to establish that the exclusionary clauses in the insurance contract were ambiguous and there was no evidence that their loss could be attributed to a nonexcluded cause.
Affirmed.
/s/ Anica Letica
/s/ Karen M. Fort Hood
/s/ Elizabeth L. Gleicher