By: Marissa Levy
No. 4D22-865 (4th DCA 08/30/2023)
The Fourth District Court of Appeal recently addressed the issue of insurance claim denials for long term water seepage. The Court held that the insured has the burden of proving a loss took place while the policy was in effect, the insurer has the burden of proving the loss is excluded from coverage, and insureds are not entitled to damages of the first 13 days of seepage.
The Plaintiff saw a piece of ceiling that had fallen in the living room on July 12, 2016, prompting him to call 911 Restoration to perform water remediation services. Citizens Property Insurance Corp. (“Citizens”) denied coverage for the claim as a long-term water leak caused the damages.
The Plaintiff had a homeowner’s insurance policy for the period of May 11, 2016, to May 11, 2017. The policy was “all risk”, meaning the insurance policy covers the risks that the contract does not explicitly omit. The present case stems from the policy language in the “all risk” provision not specifically defining “physical loss”. The General Exclusions section contains a provision for constant or repeated seepage or leakage of water, prompting the question of whether this loss was covered under the “all risk” provision or excluded under the repeated seepage provision.
The case went to trial, where the Plaintiff moved for a directed verdict on whether a physical loss took place within the subject policy period. He also requested proposed special jury instructions that would entitle him to damages caused during the first thirteen days of the repeated seepage, should they find that the damages were caused by repeated seepage and leakage. The trial court denied the jury instructions and instead instructed that the Plaintiff must prove that a direct physical loss occurred during the policy period, which the jury answered “no”. The Plaintiff then argued the jury verdict was against the weight of the evidence and moved for a new trial, which was denied. As the final judgement was rendered for Citizens, Plaintiff then appealed.
The Fourth District Court of Appeal previously held that under an “all risks” policy the insured must show a loss occurred during the policy period and then the insurer has the burden to prove the damage is excluded from the coverage; the insured only has the burden of proving that their property suffered a loss while the policy was in effect. Merrick Pres. Condo. Ass’n Inc. v. Cypress Prop. & Cas. Ins. Co., 315 SO. 3d 45, 47 (Fla. 4th DCA 2021), Jones v. Federated Nat’l Ins. Co., 235 So. 3d 936, 940 (Fla. 4th DCA 2018). The Appellate Court found that he did meet this initial burden by provided evidence that the ceiling collapsed within the policy period, specifying that the loss not being a new physical loss does not negate the timing.
The court reversed the lower court’s ruling because there was no conflicting evidence that would support a verdict for the nonmoving party, remanding the case back for a directed verdict and a jury trial for the issue of the long-term leakage exclusion precluding coverage.
The Fifth District Court of Appeal held that the insured was entitled to damages for the first thirteen days, but this was under the specific language of the policy. Hicks v. American Integrity Insurance Co. of Florida, 241 So. 3d 925 (Fla. 5th DCA 2018). Here, the Court held that ruling does not apply since this policy did not contain similar language, thus, the lower court’s denial of Plaintiff’s jury instructions was proper.
