Articles Posted in Home Owners Policies

Parker County insurance attorneys need to know the exclusions in homeowners policies and how courts interpret those exclusions. A 2007, Dallas Court of Appeals case is one worth reading. It is styled, Crocker v. American National General Insurance Co. Here is some of the relevant information.
The insureds had a homeowner’s insurance policy issued by American. The policy included a standard “surface water” exclusion. Because of improper design, the insureds’ raised patio collected water, which ran into the insured’s home. Armstrong, who represented an independent adjusting firm, was retained by one of the insurance companies to investigate the claim. After Armstrong’s report, coverage for the claim was denied under the “surface water” exclusion. The insureds’ brought suit against the insurance companies for breach of contract and for breach of common law and statutory duties of good faith, arguing that the “surface water” exclusion did not apply because the water was on the patio and never actually touched the surface of the ground. The insured’s also filed suit against Armstrong alleging negligence per se for violations of Texas Penal Code sections 22.02, 28.03, and 28.04; violations of Texas Insurance Code, Section 542.060; and for violations of the DTPA. Both carriers and Armstrong moved for summary judgment. The trial court granted summary judgment for all of the defendants, holding that the water which had fallen on the raised patio constituted “surface water” as a matter of law. Neither American nor Armstrong has addressed the “surface water” exclusion in their motion for summary judgment. The insureds’ appealed.
The Court of Appeals affirmed the trial court, holding that the plain meaning of the words “surface water” could reasonably include water that had collected on the surface of the insured’s patio, and thus, the “surface water” exclusion applied to the insureds’ claim. The court found that “surface water” is defined as water or natural precipitation diffused over the surface of the “ground” until it evaporates, is absorbed by the land, or reaches channels where water naturally flows. The court then found that to limit the term “ground” to dirt would exclude all man-made surfaces and, therefore, render the exclusion virtually meaningless in the multitude of man-made environments. The court also found that since the carriers’ had a valid exclusion they could not be liable for any bad faith claims. The court further found that the summary judgment was valid for both American and Armstrong, under the “surface water” exclusions even though they had not affirmatively pled the exclusion. The court further held that Armstrong as an independent adjuster, owed no duty to the insureds’ and, therefore, could not be liable for bad faith claims; and the insureds’ had not properly briefed the Penal Code claims against Armstrong.

Insurance attorneys in Fort Worth will deal with homeowners policies at some point. With that in mind, a 2014 opinion from the Houston Court of Appeals [14th Dist.] is important to read. The style of the case is, SWE Homes, LP v. Wellington Insurance Company. Here is some of the relevant information.

There is very little dispute regarding the facts in this case. Edgar Sadberry purchased a residential property with a mortgage from SWE. He bought a Texas Dwelling Policy from Wellington covering the property and naming SWE as the mortgagee. The effective dates of the policy ran from August 11, 2010 until August 11, 2011. The policy covered losses from various hazards including fire. It further contained a Mortgage Clause, which reads in pertinent part as follows:

19. Mortgage Clause . . . .

Parker County insurance attorneys have to know how courts interpret definitions contained within policies. A recent Houston Court of Appeals [1st Dist.] case helps as it relates to the definition of “you” in a homeowners policy. The case is styled, Hodges v. Safeco. Here is some of the relevant information.

On August 17, 2009, Darrell Lee Hodges, Sr. was assaulted in his home. His son, Darrell Lee Hodges, Jr. [“DJ”], lived at the home with his father. DJ knew the assailants, knew they were looking for his father and that they posed a risk to his safety, but nonetheless failed to warn his father of the men’s presence outside the home and failed to call the police to have the men removed from the premises.

SAFECO had a homeowner’s condominium policy in place at the time of the offense. Mr. Hodges is the named policy holder and DJ is also covered because he lived at the condominium with his father. Mr. Hodges made a claim under the policy for insurance benefits to cover his injuries. SAFECO denied coverage, citing the “homeowner’s exclusion” in the policy, which precludes coverage for “bodily injury to [the named insured] or an insured.”

Benbrook attorneys handling insurance claims need to know about this case dealing with a home owners policy. It is a 2000, case from the Austin Court of Appeals styled Easter v. Providence Lloyds Ins. Co. Here is some relevant information.

Bonnie Easter was having a difficult time dealing with the emotional and behavioral problems her daughter M.D.E. was exhibiting, and in February 1995 she placed M.D.E. in the care of Joseph and Grace Bossette, licensed foster parents. M.D.E. was nine years old at the time. Easter intended the placement to be for no more than six months.

Soon after M.D.E.’s arrival in the Bossettes’ home, Joseph Bossette began sexually molesting her. After approximately five months, M.D.E. reported the abuse to Child Protective Services. She was removed from the Bossettes’ home and returned to her mother. In February 1996, Easter brought suit on M.D.E.’s behalf against Joseph Bossette for an intentional tort for committing the abuse, and against Grace Bossette for negligence for failing to stop or report the molestation. A default judgment was rendered against the Bossettes for $300,000. Easter then brought the present action against Providence Lloyds to enforce the judgment against the Bossettes’ homeowners’ insurance carrier.

Saginaw insurance lawyers need to know about this insurance case. The case is a 1999, San Antonio Court of Appeals case styled, Wallis v. United Services Automobile Association. Here is the relevant information.

In the spring of 1993, the Wallises noticed evidence of foundation damage in their home. Suspecting such damage was caused by a plumbing leak, the Wallises filed a claim under their homeowner’s policy. Through its investigation, USAA determined that the foundation damage was caused by a combination of several excluded perils under the Wallises’ policy, including settlement, poor surface drainage, the topography of the lot, and surrounding vegetation. Plumbing leaks, which are covered perils, were also detected; however, based on soil testing and continued earth settlement following repair of the Wallises’ plumbing system, USAA concluded that the leaks were negligible and had not caused or contributed to the complained-of damage. USAA believed improper compaction of the fill dirt upon which the Wallises’ foundation rests was the primary source of the problem. Elevation tests indicated that the Wallises’ home, which was built upon a sloping lot, had settled as much as fifteen inches on the low end of the hill where soil was placed to create a plane for the foundation. In short, USAA’s investigation revealed that the Wallises’ home was sliding down the lot. Experts for the Wallises did not refute USAA’s evidence regarding the excluded perils. They did, however, challenge the conclusion drawn regarding the effect of the plumbing leaks, and claimed instead that the leaks could not be excluded as a contributing cause of the damage.

At trial, the jury was asked to determine whether “earthquake, landslide, or earth movement,” perils excluded under exclusion k of the policy, caused the Wallises’ damage. The jury was also charged under question two of the charge with determining whether “accidental discharge, leakage, or overflow of water from within a plumbing system” contributed to the Wallises’ damage. The jury answered both questions affirmatively and, under question three, found that thirty-five percent of the Wallises’ damage was caused by plumbing leaks.