Hill v. Liberty Insurance Corporation
Filing
16
Memorandum and Order Granting Defendant's 10 Motion for Summary Judgment. Signed by District Judge Avern Cohn. (SCha)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
DENISE L. HILL,
Plaintiff,
vs.
Case No. 14-11463
LIBERTY INSURANCE CORPORATION,
HON. AVERN COHN
Defendant.
______________________________________/
MEMORANDUM AND ORDER GRANTING
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT (Doc. 10)
This is an insurance contract dispute.
Denise Hill (Plaintiff) is suing Liberty
Insurance Corporation (Defendant) for insurance coverage relating to property damage
caused by water in the basement of her home.
Now before the Court is Defendant’s Motion for Summary Judgment (Doc. 10). For
the following reasons, Defendant’s Motion is GRANTED.
II. BACKGROUND
A.
The following facts are not in dispute. On or about February 24, 2012, Defendant
issued a HomeProtector Plus homeowner’s policy covering Plaintiff’s home and personal
property. On February 24, 2013, Defendant renewed the policy for the period through
February 24, 2014.
On February 28, 2013, Plaintiff submitted an insurance claim to Defendant for water
1
damage sustained to her basement and its contents. Plaintiff admits that she cannot
establish with certainty the precise day or time that the water entered the basement. (Doc.
10, Ex. D at 10-11). Plaintiff states that there were “four inches of standing water backup
in her basement resulting from a blocked drain.” (Doc. 10, Ex. B). After discovering the
water Plaintiff hired a licensed plumber who snaked a drain. This allowed the water to flow
freely out of the basement.
Defendant denied Plaintiff’s claim on the basis that there was no coverage under the
policy, citing the Water Damage Exclusion. In addition, Defendant now argues that Plaintiff
cannot establish that the damage occurred within the effective policy period.
B.
There are two relevant portions of the policy, relating to (1) the Water Damage
Exclusion and (2) the effective Policy Period. These portions provide as follows:
SECTION I – EXCLUSIONS
1. We do not insure for loss caused directly or indirectly by any of the
following. Such loss is excluded regardless of any other cause or event
contributing concurrently or in any sequence to the loss.
***
c. Water Damage, meaning:
(1) Flood, surface water, waves, tidal water, overflow of a body
of water, or spray from any of these, whether or not driven by
wind;
(2) Water which backs up through sewers or drains or which
overflows from a sump; or
(3) Water below the surface of the ground, including water
which exerts pressure on or seeps or leaks through a building,
sidewalk, driveway, foundation, swimming pool or other
structure.
2
***
SECTIONS I AND II – CONDITIONS
2. Policy Period. This policy applies only to loss in Section I or “bodily injury”
or “property damage” in Section II, which occurs during the policy period.
Defendant argues that Plaintiff’s claim should be denied because (1) Plaintiff cannot
establish that the water intrusion and corresponding property damage occurred after the
inception of the homeowner’s policy on February 24, 2012, and (2) the Water Damage
Exclusion precludes coverage for the damages claimed. Because the question of the
Water Damage Exclusion is dispositive, the Court does not discuss arguments relating to
the covered Policy Period.1
III. ANALYSIS
A. Standard of Review
Summary judgment will be granted when the moving party demonstrates that there
is “no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” Fed. R. Civ. P. 56(c). There is no genuine issue of material
fact when “the record taken as a whole could not lead a rational trier of fact to find for the
non-moving party.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
1
On the issue of the Policy Period, Defendant argues that because Plaintiff
cannot establish with certainty the day that the water entered the basement, Plaintiff
fails to satisfy her burden of proving that the water entered within the effective policy
period. However, Defendant concedes that the policy coverage began on February 24,
2012, and was renewed for another year on February 24, 2013. Defendant therefore
argues that it is, at least, plausible that the water entered the basement prior to
February 24, 2012, and that Plaintiff had not entered the basement—thereby
discovering the standing water—in over a year. Although Plaintiff cannot state with
certainty the last time she had been it the basement, Plaintiff testified that she kept a
washing machine there. It is not a plausible or defendable position that Plaintiff had not
been in her own basement—or used her washing machine—in over a year.
3
(1986).
To prevail, the nonmoving party must present “significant probative evidence” in
support of its opposition to the motion for summary judgment in order to defeat the motion.
See Moore v. Philip Morris Co., 8 F.3d 335, 340 (6th Cir. 1993); see also Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986). The Court “must view the evidence in
the light most favorable to the non-moving party.” Employers Ins. of Wausau v. Petroleum
Specialties, Inc., 69 F.3d 98, 101 (6th Cir. 1995). The Court must decide “whether the
evidence presents a sufficient disagreement to require submission to a [trier of fact] or
whether it is so one-sided that one party must prevail as a matter of law.” In re Dollar
Corp., 25 F.3d 1320, 1323 (6th Cir. 1994) (quoting Anderson, 477 U.S. at 251-52). Only
where there are no genuine issues of material fact and the moving party is entitled to
judgment as a matter of law may summary judgment be granted. Thompson v. Ashe, 250
F.3d 399, 405 (6th Cir. 2001).
B. Discussion
Relying on the language of the policy, Defendant argues that Plaintiff’s claim must
be denied because there is no question of material fact that the damage in the basement
was caused by “water which backs up through sewers or drains,” “regardless of any other
cause or event contributing concurrently or in any sequence to the loss.” Defendant’s
argument is persuasive.2
2
As a threshold matter, Plaintiff argues that Defendant Motion for Summary
Judgment should be denied because Defendant failed to comply with E.D. Mich. Local
Rule 7.1, which requires a movant to ascertain whether the contemplated motion will be
opposed. Plaintiff states that because Defendant merely send an e-mail message at
10:00 PM the night before filing its Motion with “no attempt to confer . . . or to determine
if the e-mail message had been received and reviewed,” Defendant failed to make a
4
1.
Under Michigan law, the rules of insurance policy interpretation “are the same as for
any other written contract.” Comerica Bank v. Lexington Ins. Co., 3 F.3d 939, 942 (6th Cir.
1993). “The cardinal rule in the interpretation of contracts is to ascertain the intention of
the parties. To this rule all others are subordinate.” City of Grosse Point Park v. Michigan
Municipal Liab. & Prop. Pool, 473 Mich. 188, 197 (2005) (quoting McIntosh v. Groomes,
227 Mich. 215, 218 (1924)). An insurance policy must be enforced in accordance with its
clear and unambiguous terms, and a court should “not hold an insurance company liable
for a risk it did not assume.” Frankenmuth Mut. Ins. Co. v. Masters, 460 Mich. 105, 111
(1999). Although ambiguities will be construed in favor of the insured, a court should “not
create ambiguity where the terms of the contract are clear.” Id. Furthermore, “[c]lear and
specific exclusions must be given effect.” Northland Ins. Co. v. Stewart Title Guar. Co., 327
F.3d 448, 457 (6th Cir. 2003) (quoting Pac. Employers Ins. Co. v. Mich. Mut. Ins. Co., 452
Mich. 218 (1996)).
2.
Plaintiff conceded numerous times that the source of the water that damaged the
contents of her basement originated at the basement drain. The Complaint states that the
damage was caused by “four inches of standing water backup in her basement resulting
good-faith effort to obtain concurrence. However, as noted by Defendant, an e-mail
seeking concurrence complies with L.R. 7.1. See Ormsby v. LTF Fitness Operations
Co., 2014 WL 4064720, at *6 (E.D. Mich. Aug. 18, 2014) (holding that seeking
concurrence with a motion for summary judgment via e-mail “conforms with the spirit of
L.R. 7.1”). In addition, Plaintiff cites no authority suggesting that a motion for summary
judgment should be denied because concurrence was sought either through e-mail or
just before filing of the motion.
5
from a blocked drain.” (Doc. 10, Ex. B at ¶ 11) In a sworn deposition Plaintiff testified as
follows:
Q. When you went into the basement, was there a broken pipe anywhere?
A. No.
Q. Had you been doing laundry that day?
A. No.
Q. Do you have a washer in the basement?
A. Yes.
Q. Was that overflowing?
A. No.
***
Q. And you have testified that there wasn’t a broken pipe, you hadn’t been doing
laundry, there is not a bathroom in the basement, so the only source of that water
is through the drain, is that correct?
A. I assume so.
(Doc. 10, Ex. D at 11-13) In addition, Plaintiff’s independent public adjuster testified as
follows:
A. . . . . And just so that we will be clear, the water was considered dirty
water also. And you will see that in the videos.
Q. Why is that?
A. Because it came up from the drain. This was household debris. . . .
(Doc. 10, Ex. E at 40). The public adjuster further testified that the standing water in the
basement resulted from an accumulation of household debris, dirt, tree roots, and crock
among other things—a blockage that prevented the water from exiting and caused it to pool
and collect in the basement. (Doc. 1, Ex. A at 89)
Under the policy, Exclusion 1.c(2) excludes coverage for “water which backs up
through sewers or which overflows from a sump.” Therefore, Defendant argues that
Plaintiff’s claim fails because (1) a basement drain was the entry point of the water into the
basement, and (2) the water that caused the damage backed up through the drain.
6
In response, Plaintiff argues that she is covered under other related provisions of the
policy. Plaintiff relies on a section providing coverage in the case of “Collapse,” which
states, “We insure for direct physical loss to covered property involving collapse of a
building or any part of a building caused . . . by . . . Perils Insured Against.” (Doc. 10, Ex.
A at 11). These “Perils” include “[a]ccidental discharge or overflow of water or steam from
within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or
from within a household appliance.” (Doc. 10, Ex. A at 13).
Plaintiff says that the damage was caused by a collapse of the pipe carrying waste
water that ran from her home, rather than from its backup. She maintains that the pipe
which collapsed is part of the structure of her home, and that the collapse concerned the
“overflow of water . . . within a plumbing . . . system.” Plaintiff further argues that courts
have broadly defined the term “collapse,” to encompass “the breakdown or compromise of
a physical structure” or situations where a structural compromise was imminent. Ososki
v. St. Paul Surplus Lines, 156 F. Supp. 2d 669, 678 (E.D. Mich. 2001) aff’d sub nom.
Ososki v. St. Paul Surplus Lines Ins. Co., 60 F. App’x 602 (6th Cir. 2003).
Plaintiff’s arguments related to “collapse” fail for a number reasons. First, Plaintiff
did not introduce this theory of recovery until her response brief. In support of her
argument, Plaintiff says that the public adjuster determined her claim to be based on the
“Collapse” provisions of the homeowner’s policy. However, there is no evidence in the
record indicating any structural compromise of the drain or the drain pipe; nor does Plaintiff
point to any statement by the public adjuster, whose deposition and declarations mention
nothing about a collapse. Instead, the public adjuster stated that the backup was caused
by an accumulation of “household debris, dirt, tree roots and crock among other things.”
7
14-11463 Hill v. Liberty Insurance Corp
(Doc. 12, Ex. 2 at ¶ 19) Nor would the public adjuster’s interpretation of the homeowner’s
policy be in any way dispositive. In addition, Defendant points out that Plaintiff’s reading
of the “Collapse” provisions is incomplete, because it ignores language which later states,
“Loss to . . . underground pipe . . . is not included . . . unless the loss is a direct result of the
collapse of a building.” (Doc. 10, Ex. A at 11) (emphasis added) Here, no building has
collapsed.
Further, any such collapse would not have been “caused by . . . a discharge or
overflow of water.” Quite the opposite—Plaintiff argues that the collapse of her drain pipe
caused the discharge or overflow of water into the basement. Finally, even if a collapse
did cause the water backup, the policy states that damage caused by water that “backs up
through sewers or drains” is excluded “regardless of any other cause or event contributing
concurrently or in any sequence to the loss.” Thus, the cause of any such backup is
irrelevant. See Sunshine Motors, Inc. v. New Hampshire Ins. Co., 209 Mich. App. 58, 60
(1995) (under identical policy language, holding that the cause of a backup, whether direct
or proximate, is of no consequence to the denial of the plaintiff’s claim).
As a last resort, Plaintiff argues that the policy provisions include ambiguous terms,
which are “reasonably and fairly susceptible to multiple understandings and meanings,” and
should therefore be construed against the Defendant. There is no ambiguity in the terms
of the policy. The Court cannot “create ambiguity where the terms of the contract are
clear.” Frankenmuth, 460 Mich. at 111.
IV. CONCLUSION
For the above reasons, Defendant’s Motion for Summary Judgment has been
8
14-11463 Hill v. Liberty Insurance Corp
granted. This case is DISMISSED.
SO ORDERED.
S/Avern Cohn
AVERN COHN
UNITED STATES DISTRICT JUDGE
Dated: November 7, 2014
I hereby certify that a copy of the foregoing document was mailed to the attorneys of
record on this date, November 7, 2014, by electronic and/or ordinary mail.
S/Sakne Chami
Case Manager, (313) 234-5160
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?