Liberty Mutual Fire Insurance Company v. Martinez, No. 5D13—2683, 2015 WL 585550 (Fla. 5th DCA February 13, 2015)
Damage to property caused by subsurface water pressure may be excluded from coverage in policies containing anti-concurrent cause provisions that apply to water damage.
Homeowners were insured under an all-risk policy covering their residence and other structures located on their property. During a tropical storm, the Insureds partially emptied their overflowing in-ground swimming pool. The following day, the Insureds discovered the pool had lifted out of the ground. Experts later agreed that subsurface water accumulated underneath the pool during the storm, which exerted hydrostatic pressure on the partially emptied pool. The pressure caused the pool shell to lift out of the ground, damaging the shell, the pool deck, rock garden, and waterfall. The Insureds filed a claim, which Liberty Mutual denied based on the policy’s Water Exclusion provision that excluded damage caused by hydrostatic pressure.
The Insureds filed a breach of contract action and argued that their damage was covered under the ensuing-loss provision in the policy. (The Insureds initially presented claims for damage to the pool shell, pool deck, rock garden, and waterfall, but they later conceded that the Water Exclusion prevents recovery for the pool shell.) Both sides moved for summary judgment and the trial court found that the damages were caused by the pool shell coming out of the ground and not from hydrostatic pressure. Liberty Mutual appealed to Florida’s Fifth District Court of Appeal. The Court reversed, ruling that the policy excluded the loss.
The issue on appeal was whether the Water Exclusion bars coverage for the damage to the Insureds’ pool deck, rock garden, and waterfall.
The Fifth District reversed the trial court’s final summary judgment in favor of the insureds, ruling that the policy expressly excluded the insureds’ loss as it specifically excluded losses that occurred directly or indirectly from subsurface water pressure.
The Fifth District analyzed the policy in question and found that the policy contained an anti-concurrent cause provision, which is a provision in a first-party insurance policy that provides that when a covered cause and a non-covered cause combine to cause a loss, all losses directly and indirectly caused by those events are excluded from coverage. Absent an anti-concurrent cause provision, when independent covered and non-covered causes of loss combine to produce a loss, the loss is covered under the concurrent cause doctrine. However, parties may contract around the concurrent cause doctrine with an anti-concurrent cause provision. Generally, insurance coverage must be broadly construed in favor of the insured, while exclusions must be narrowly construed against the insurer. Additionally, insurance policies may contain exclusionary provisions that exclude certain risks from the scope of coverage, and exclusionary provisions may carve out coverage exceptions for losses that ensue from an excluded cause of loss.
While the Court did not find any Florida cases on point, it examined cases from other jurisdictions where courts have interpreted similar anti-concurrent cause provisions and applied those provisions to analogous facts. The Fifth District agreed with courts in New York and South Carolina that found insureds’ pool deck damages, which were sustained when rain increased hydrostatic pressure around pools, forcing the pools out of the ground and damaging their decks, were excluded from coverage because each policy contained an anti-concurrent cause provision that applied to water damage. Because water pressure was one of the causes that forced the pool out of the ground, those courts concluded that the water damage exclusion applied.
In this case, the Fifth District agreed with Liberty and found the damage to the insureds’ pool deck, rock garden, and waterfall was not an ensuing loss. Rather, the policy expressly excluded the insureds’ loss that occurred directly or indirectly from subsurface water pressure. As a result, the Court did not see the need to look to the ensuing-loss provision in the policy.