Bibeau v. Concord Gen. Mut. Ins. Co.

• Decision Date: 26 January 2021
• Docket Number: Docket: Cum-20-149
• Citation: 244 A.3d 712
• Parties: Arthur BIBEAU v. CONCORD GENERAL MUTUAL INSURANCE COMPANY
• Court: Maine Supreme Court

244 A.3d 712

Arthur BIBEAU

v.CONCORD GENERAL MUTUAL INSURANCE COMPANY

Docket: Cum-20-149

Supreme Judicial Court of Maine.

Argued: December 8, 2020

Decided: January 26, 2021

Bruce W. Hepler, Esq. (orally), Law Offices of Bruce W. Hepler, Portland and Roger F. Brunelle, Jr., Esq., Law Offices of Roger Brunelle, Jr., Portland, for appellant Arthur Bibeau

Matthew T. Mehalic, Esq. (orally), and Nicole Sawyer, Esq., Norman Hanson & DeTroy, Portland, for appellee Concord General Mutual Insurance Company

Panel: MEAD, GORMAN, JABAR, HUMPHREY, HORTON, and CONNORS, JJ.

HUMPHREY, J.

[¶1] In this appeal, we consider whether the provisions of a homeowner's insurance policy unambiguously exclude coverage for substantial losses sustained by the policy holder. Arthur Bibeau appeals from a summary judgment entered by the Superior Court (Cumberland County, Stewart, J. ) in favor of Concord General Mutual Insurance Company (Concord) on Bibeau's complaint for alleged breaches and violations of the homeowner's insurance policy issued to him by Concord.¹ Bibeau argues, among other things, that the court erred when it found that the policy unambiguously excluded from coverage losses caused by earth movement. We disagree and affirm the judgment.²

I. BACKGROUND

[¶2] The following facts are drawn from the parties’ supported statements of material facts, viewed in the light most favorable to Bibeau. See MSR Recycling, LLC v. Weeks & Hutchins, LLC , 2019 ME 125, ¶ 6, 214 A.3d 1.

[¶3] In 2006, Bibeau purchased a home in Portland and insured it through the policy issued to him by Concord. On or about September 15, 2017, Bibeau submitted a notice of claim to Concord for damage to his home that included extensive foundation cracks and settlement and that led to "racking doors and windows, out of level floors and stairs, cracking drywall, separating interior baseboard, and a leaning garage."³ Bibeau alleged that this damage was caused by a 2006 water line leak,⁴ which, according to his expert, pushed sand and other material under the foundation of the home, compromising the foundation's integrity, causing it to drop down or "settle." In contrast, Concord's expert concluded that the settling was caused by the house being built on "unprepared or uncontrolled fill," a nonuniform soil composition that allowed the house to settle at different rates. Although the parties disagree about what caused the settling, the parties do not dispute that the damage to Bibeau's house is the result of earth moving under the house's foundation.

[¶4] On May 1, 2018, Concord denied Bibeau's claim based on the policy's earth movement exclusion and its anti-concurrent-causation clause.⁵ On October 16, 2018, Bibeau filed a complaint against Concord in the Superior Court alleging a breach of the policy and unfair claims settlement practices, and seeking overdue interest on the amount owed under the policy.⁶ Concord answered and denied that it had breached the terms of the policy. On November 1, 2019, Concord moved for a summary judgment on all of the counts in Bibeau's complaint.

[¶5] On April 24, 2020, the court entered a summary judgment for Concord, reasoning that because there was no genuine dispute that Bibeau's losses were caused by "subsurface soils being undermined and earth movement," the policy's unambiguous language, specifically its earth movement exclusion, excluded Bibeau's claim from coverage.⁷ Bibeau timely appealed the judgment. See 14 M.R.S. § 1851 (2020) ; M.R. App. P. 2A, 2B(c)(1).

II. DISCUSSION

[¶6] We review a grant of a summary judgment de novo, "considering the evidence in the light most favorable to the nonprevailing party to determine whether the parties’ statements of material facts and the record evidence to which the statements refer demonstrate that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Kurtz & Perry, P.A. v. Emerson, 2010 ME 107, ¶ 15, 8 A.3d 677 (quotation marks omitted). "A material fact is one that can affect the outcome of the case, and there is a ‘genuine issue’ when there is sufficient evidence for a fact-finder to choose between competing versions of the fact." Stewart-Dore v. Webber Hosp. Ass'n , 2011 ME 26, ¶ 8, 13 A.3d 773.

[¶7] Bibeau argues that the court erred in concluding that the relevant policy language was not ambiguous and that the damage to his house was excluded based on the policy's earth movement exclusion. Bibeau's argument requires us to examine three sections of the policy: Section I-Property Coverages (Coverages), Section I-Perils Insured Against (Perils), including the "Exception To [paragraph] c.(6)" (Perils Exception), and Section I-Exclusions (Exclusions).

[¶8] Relevant to this appeal, the policy covers the dwelling on the "residence premises," i.e., Bibeau's home, Coverages paragraph A.1.a, and insures "against risk of direct physical loss to [the home]," Perils paragraph A.1. The scope of that coverage is limited in two significant respects. First, the policy generally does not cover specific losses enumerated in Perils paragraph A.2.c.(6)(f), including those caused by a settled foundation. However, under certain circumstances, those losses are covered pursuant to the Perils Exception, which provides, "Unless the loss is otherwise excluded , we cover loss to [Bibeau's home] resulting from an accidental discharge or overflow of water or steam from within a ... [s]torm drain, or water, steam or sewer pipe, off the ‘residence premises.’ " (Emphasis added.)

[¶9] Second, the policy does not insure against losses excluded under Exclusions paragraph A.2., including losses caused by earthquakes, landslides, mudslides, mudflow, subsidence, sinkholes or "[a ]ny other earth movement including earth sinking, rising or shifting; caused by or resulting from human or animal forces or any act of nature." (Emphasis added.) Additionally, Exclusions paragraph A. includes an anti-concurrent-causation clause, which provides that losses caused by any of the enumerated exclusions are not covered "regardless of any other cause or event contributing concurrently or in any sequence to the loss." The anti-concurrent-causation clause "entirely bars insurance coverage where a claimed loss is caused by a combination of covered and excluded perils." Boazova v. Safety Ins. Co. , 462 Mass. 346, 968 N.E.2d 385, 393 (2012) (listing cases).

[¶10] Here, the court concluded that there was no genuine dispute that the damage to Bibeau's home was caused by the movement of earth under the foundation. The record and the parties’ statements of material facts support this conclusion—the parties agree that earth movement under the foundation caused the house to "settle," or drop down, which resulted in the damage.

[¶11] However, the parties do not agree about what caused the earth movement—a water leak as asserted by Bibeau, or the construction of Bibeau's home on top of uncontrolled fill as asserted by Concord. The trial court concluded that this disagreement is not material to Bibeau's claim under the policy because regardless of the cause of the earth movement, Bibeau's losses are clearly excluded by the policy's earth movement exclusion. Bibeau challenges the court's conclusion, asserting that the earth movement exclusion itself is ambiguous, and that its meaning is made even more ambiguous when combined with the language of the Perils Exception. Thus, we begin by reviewing the relevant policy language to determine whether its meaning is plain or whether it is ambiguous. See e.g. , Metro. Prop. & Cas. Ins. Co. v. Estate of Benson , 2015 ME 155, ¶¶ 8-16, 128 A.3d 1065.

A. Ambiguity of Earth Movement Exclusion

[¶12] We review the court's interpretation of an insurance policy de novo. Kelley v. North East Ins. Co. , 2017 ME 166, ¶ 4, 168 A.3d 779; see also Hall v. Acadia Ins. Co. , 2002 ME 110, ¶ 6, 801 A.2d 993 ("The determination of whether an insurance contract is ambiguous is a question of law for the court." (quotation marks omitted)). An insurance contract is ambiguous if it is "reasonably susceptible of different interpretations," Geyerhahn v. U.S. Fid. & Guar. Co. , 1999 ME 40, ¶ 12, 724 A.2d 1258 (quotation marks omitted), "from the perspective of an average person untrained in either the law or the insurance field in light of what a more than casual reading of the policy would reveal to an ordinarily intelligent insured," Kelley , 2017 ME 166, ¶ 5, 168 A.3d 779 (quotation marks omitted). "If the language of an insurance policy is unambiguous, we interpret it in accordance with its plain meaning, but we construe ambiguous policy language strictly against the insurance company and liberally in favor of the policyholder." Id. (quotation marks omitted).

[¶13] Bibeau contends that the earth movement exclusion is ambiguous because similar exclusions have typically been applied to losses stemming from natural disasters that are impossible to predict or insure against and not to losses stemming from leaks in pipes, and therefore, if Concord wished to exclude the type of loss that Bibeau suffered, it should have specifically "included the accidental discharge of water from a water pipe in its list of what constitutes earth movement."

[¶14] In support, Bibeau points to Powell v. Liberty Mutual Fire Insurance Co. , 127 Nev. 156, 252 P.3d 668 (2011), in which the Nevada Supreme Court considered an earth movement exclusion that read:

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. ... Earth movement, meaning earthquake including land shock waves or tremors before, during or after a volcanic eruption; landslide, mine subsidence; mudflow; earth sinking, rising or shifting.

Id. at 670. In holding that this earth movement exclusion was ambiguous and did not exclude "damage sustained as a result of soil movement from a burst pipe," the court reasoned...