24 Fla. L. Weekly Supp. 229a
Online Reference: FLWSUPP 2403JRODInsurance — Homeowners — Coverage — Water seepage and leakage — Policy endorsement limiting coverage for water seepage and leakage to $1,000 is clear, and insurer is entitled to have it applied as written — No merit to argument that limitation cannot be applied because it was not included within exclusion section of policy — Coverage limitation is not an exclusion — Fact that endorsement has heading of “Additional Coverages” does not render limitation ambiguous where endorsement title states that it is limitation and definitions within endorsement clearly define limits
JOSE RODRIGUEZ and ISOVICI RODRIGUEZ, Plaintiffs, v. GEOVERA SPECIALTY INSURANCE SERVICES, Defendant. Circuit Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 14-CA-01666, Division R. February 22, 2016. Laurel M. Lee, Judge. Counsel: Andrew Fuxa, Geyer Fuxa Tyler, PLLC, Sunrise, for Plaintiff. Kristina L. Marsh, Hinshaw & Culbertson LLP, Tampa, for Defendant.
ORDER DENYING PLAINTIFFS’ MOTIONFOR PARTIAL SUMMARY JUDGMENT ONDEFENDANT’S THIRD AFFIRMATIVEDEFENSE OF LEAKAGE SUBLIMITSANDORDER GRANTING DEFENDANT’S CROSSMOTION FOR SUMMARY JUDGMENT
THIS CAUSE came before the Court for hearing on April 11, 2016, on Plaintiffs’ Motion for Partial Summary Judgment on Defendant’s Third Affirmative Defense of Leakage Sublimits filed February 22, 2016, and Defendant’s Cross Motion for Summary Judgment filed March 15, 2016. Having considered the Motion, response briefs, arguments of counsel, the court file, and applicable law, the Court DENIES Plaintiffs’ Motion and GRANTS Defendant’s Motion.
GeoVera Specialty Insurance Company (GeoVera) insured Mr. and Mrs. Rodriguez’s home and personal property located at 505 Cedar Waxwing Dr., Brandon, Florida 33510. On or about May 1, 2013, Mr. and Mrs. Rodriguez’s home was damaged by a water leak. They filed an insurance claim with GeoVera because the policy was in effect as of May 1, 2013. On or about August 28, 2013, GeoVera paid $6,000.00 in benefits after reducing the coverage by the deductible and depreciation. $5,000.00 was paid under mold coverage and $1,000.00 was paid under water seepage or leakage coverage. Mr. and Mrs. Rodriguez filed this action asserting that they are entitled to additional monies under the policy and that their contractor estimates it will cost approximately $30,000.00 to repair the damage to their home from the loss. GeoVera asserts that they paid out everything that Mr. and Mrs. Rodriguez are entitled to under the policy because there is an endorsement limiting water seepage and leakage coverage to $1,000.00 in benefits. Accordingly, GeoVera asserts that they are not in breach of the insurance policy.
Both Motions for Summary Judgment ask the court to determine the effect, or lack thereof, of the water seepage or leakage sublimit contained within an endorsement to the policy. Mr. and Mrs. Rodriguez argue that because it is an all risk policy, water seepage and leakage is covered to the full extent of the policy unless specifically excluded. They assert that because the water seepage and leakage was not excluded anywhere in the policy, the limitation endorsement is ineffective to limit the otherwise all-inclusive policy. Mr. and Mrs. Rodriguez argue alternatively, that the limitation is ambiguous such that it should be interpreted against the drafter and insurer, GeoVera, so as to construe full coverage for this peril. GeoVera argues that the endorsement clearly limits the coverage for claims arising from water seepage and leakage perils, and that it should be applied as written.
The Court agrees with GeoVera. Although admittedly, “Additional Coverages” is not the best heading for a limitation of coverage, taken in the context of the entire endorsement, which itself is titled, “LIMITED SMOG, RUST, MOLD, ROT, OR BACTERIA COVERAGE AND LIMITED SEEPAGE OR LEAKAGE COVERAGE,” the coverage limitation is clear and GeoVera is entitled to have it applied as written.
Contrary to Mr. and Mrs. Rodriguez’s argument, water seepage and leakage did not need to be included within the Exclusion section like the mold was in order to be limited because a coverage limitation is not an exclusion. An exclusion is a peril that is not covered. Here, water seepage as a peril is covered by the policy, just only up to a certain amount as defined and limited by the endorsement. There is a reason that mold is contained within the Exclusion section while the water seepage is not. This is because the endorsement adds mold as an exclusion, but then goes on to say loss caused by mold is not excluded when the mold itself results from a covered peril. This means that mold, generally, is excluded. However, if mold results from a covered peril, it is not excluded. Here, the mold resulted from the covered peril of water seepage so the losses caused by mold were not excluded from coverage. This is why Mr. and Mrs. Rodriguez were paid $5,000 for the loss caused by mold (if in contrast, the mold had resulted from water damage from flood, an excluded peril, the loss caused by mold would likewise have been excluded). This is different from the water seepage which has always been a covered peril, but is simply limited in the amount of coverage for this peril by this endorsement. It would not be proper to put the water seepage in the Exclusion section because it is not an excluded peril. If water seepage were excluded, than Mr. and Mrs. Rodriguez would not have been able to receive the $5,000 in losses caused by mold resulting from the water seepage. Likewise, it is important that a covered peril such as water seepage not be included within an Exclusion section because it could additionally act to constrict other coverages. For example, under the policy collapse is covered only if caused by a covered peril or certain other delineated causes. Thus, if water seepage were to cause collapse, in order for the collapse to be covered, it would be important that the water seepage was not an excluded peril. It is not.
In the primary policy, just as in the endorsement relating to water seepage, there are other examples of limitations of coverage contained within the Additional Coverages section. See for example the Ordinance or Law limitation which limits to 10% of the total limit of liability, costs incurred in rebuilding under Coverage A for increased costs due to compliance with ordinances or laws. That percentage is actually increased to 25% by a separate endorsement. Some of these limitations are monetary per occurrence such as the limitation on water seepage. Others are based on conditions such as in the case of collapse. Collapse is actually an excluded peril except when it is caused by a covered peril or certain other causes as defined in the Additional Coverages section. The collapse section within Additional Coverages thus limits the insurance for collapse to those instances where it is specifically caused by covered perils or other defined perils. It does not, however, limit an amount of coverage. It does specify, just as with the water seepage coverage, that the coverage does not increase the limit of liability that applies to the damaged covered property. In contrast, perils properly within the Exclusion section are those things that are not covered period, except under some conditions for some (such as those for collapse). Such exclusions include for example — power failure, neglect, and government action. A peril that is always covered, just subject to a coverage limitation, would not be an exclusion or properly contained within the Exclusion section.
As noted above, the Court agrees that the heading, “Additional Coverages” is not the most ideal for this limitation on the amount of water seepage coverage (perhaps just “Coverages” without the “Additional” would be better), but read in total with the entirety of the policy and endorsement, it is not so confusing as to render it ambiguous and require a reading against GeoVera. See Cheetham v. Southern Oak Insurance Co., 114 So. 3d 257, 262 (Fla. 3d DCA 2013) [38 Fla. L. Weekly D694a] (holding that an insurance policy must be read as a whole to determine if it is ambiguous and it is not rendered ambiguous merely because it is complex or requires analysis). There are a few reasons the Court finds it to be sufficiently clear. First, the endorsement itself is titled “LIMITED SMOG, RUST, MOLD, ROT, OR BACTERIA COVERAGE AND LIMITED SEEPAGE OR LEAKAGE COVERAGE.” The title should first alert the insured that the coverages listed are limited. If that’s not enough, the definitions then go on to clearly define the limits:
“Per policy period seepage or leakage combined total sublimit” means the $1,000 limit of liability that applies to the combined total of all of the following which occur during any one policy period:
a. Covered loss caused by or resulting from water or steam that seeps or leaks. . .
. . .This combined total $1,000 sublimit is the most we’ll pay regardless of the number or type of coverages that may apply, the number of premises insured under this policy, the number of persons injured or whose property is damages, or the number of “occurrences” or claims made. This sublimit is included in, but does not increase, the maximum limits of liability under Sections I and II of your policy as shown on the declarations page.
Following the definitions, the endorsement then goes on to actually include Seepage or Leakage under Additional Coverages, it makes very clear that:
We insure for direct physical loss to property described in Coverages A and B caused by:
a. Water or steam that seeps or leaks;. . .
However, such coverage is subject to the “per policy period seepage or leakage combined sublimit.”
The “per policy period seepage or leakage combined sublimit is defined above.”
In support of its position that the coverage limitation in the endorsement is clear and should be applied as written, Defendant points to Certain Interested Underwriters at Lloyds London v. Pitu, Inc., 95 So. 3d 290 (Fla. 3d DCA 2012) [37 Fla. L. Weekly D1534a]. In that case, the trial court agreed with the insured that an endorsement to an all-risk policy extended an additional $25,000.00 in coverage for water damage otherwise excluded by the policy. Id. at 292. The appellate court reversed, finding that the endorsement was clear and unambiguous in its limitation of coverage for water losses covered by the policy to $25,000.00. The endorsement at issue in Pitu read:WATER DAMAGE AGGREGATE LIMITATION
READ CAREFULLY
In consideration of the premium charged, it is hereby understood and agreed that for such insurance as is afforded by this policy, loss(es) paid arising out of, or caused by, water damage shall be subject to a maximum amount of $25,000 during the policy term.
Id. at 293.
The similarity to the case at hand is that the endorsement itself was clearly titled a limitation and it clearly delineated such limitation, as does the instant endorsement. The difference is that in Pitu, the change was not placed under “Additional Coverages.” The endorsement in Pitu did not appear to place it under any sections. Id. Rather, it just changed the policy.
Mr. and Mrs. Rodriguez cite to Brown v. Travelers Ins. Co., 649 So. 2d 912 (Fla. 4th DCA 1995) [20 Fla. L. Weekly D291b] for their argument that the water seepage should have been included under the Exclusion section and that, because it was not, it cannot be applied. In Brown, the appellate court held that the insurer could not avoid coverage under an intentional acts exclusion for fire loss caused when the insured burned down his own house because the intentional acts exclusion appeared in and was made applicable only to general liability coverage provided by the policy. Id. at 915. Coverage for the fire loss was provided for under a separate property insurance section of the policy. Id. at 913-14. The Court finds that Brown is not controlling because again, a limitation on coverage is not an exclusion and would not be properly included under an Exclusion section. Thus, the instant situation is not akin to Brown, which failed to include a particular exclusion within the property section of a policy in addition to the liability section. Brown has been cited for that proposition — that exclusions contained in one section of a policy cannot be applied to another section of a policy. See, e.g., Kattoum v. New Hampshire Indem. Co., 968 So. 2d 602, 605 (Fla. 2d DCA 2007) [32 Fla. L. Weekly D2353a]. That is not the situation here.
In sum, because the coverage limitation is not an exclusion, the Court does not find an inherent problem with it being placed under the Additional Coverages section because the endorsement itself and the limitation is clearly described as a sublimitation on coverage for the water seepage peril. Accordingly, GeoVera is entitled to have it applied as written. As such, GeoVera paid out all the benefits that Mr. and Mr. Rodriguez are entitled too for their loss caused by water seepage or leakage and GeoVera is entitled to judgment in its favor.
WHEREFORE, it is ORDERED and ADJUDGED that:
1. Plaintiffs’ Motion for Partial Summary Judgment on Defendant’s Third Affirmative Defense of Leakage Sublimits is DENIED.
2. Defendant’s Cross Motion for Summary Judgment is GRANTED.
3. Defendant, after consultation with Plaintiff’s counsel as to form, shall submit a proposed Final Judgment.
