Cameron v. USAA Property & Cas. Ins. Co., 98-CV-764.

• Decision Date: 29 July 1999
• Docket Number: No. 98-CV-764.,98-CV-764.
• Citation: 733 A.2d 965
• Parties: Allan W. CAMERON, et al., Appellants, v. USAA PROPERTY AND CASUALTY INSURANCE COMPANY, Appellee.
• Court: D.C. Court of Appeals

733 A.2d 965

Allan W. CAMERON, et al., Appellants, v. USAA PROPERTY AND CASUALTY INSURANCE COMPANY, Appellee.

No. 98-CV-764.

District of Columbia Court of Appeals.

Argued April 15, 1999.

Decided July 29, 1999.

John C. Lynch, with whom Jack D. Lapidus, Washington, DC, was on the brief, for appellants.

Michael J. Budow, with whom Jeffrey T. Brown, Bethesda, MD, was on the brief, for appellee.

Before SCHWELB, RUIZ, and REID, Associate Judges.

SCHWELB, Associate Judge:

Allan W. Cameron and Rebecca Hancock Cameron appeal from an order of the trial court, dated April 16, 1998, granting summary judgment in favor of USAA Property and Casualty Insurance Company in a suit by the Camerons in which they challenged the denial of benefits under an "all-risk" homeowner's insurance policy. The trial judge held that recovery for water damage to property located in the Camerons' basement following a major snowstorm was barred by an exclusion from the policy for certain losses caused by "surface water." We conclude that this exclusion unambiguously bars the Camerons' claim. Accordingly, we affirm.

I. THE FACTS

In January 1996, a series of severe winter storms blanketed the District of Columbia in several feet of snow. Approximately thirty inches of snow accumulated on the Camerons' uncovered outdoor patio and on other parts of their property.

On January 19, as a result of rising temperatures and torrential rain, the snow began to melt. The inclement weather had previously damaged two gutters on the Camerons' roof. The disabling of the gutters contributed to the accumulation of additional snow and rain on the patio, and the water began to overflow. The patio had been graded so that excess water would drain into the driveway, but in this case the accumulation was so great that some of the water ran down a stairwell leading from the patio to the basement, past a blocked drain, and under the basement door. The flooding took a heavy toll on the personal property inside the basement. The Camerons asked USAA to compensate them for the damage.

The Camerons' policy provided coverage for any direct physical loss to personal property resulting from the "[w]eight of ice, snow or sleet which causes damage to property contained in a building, [a]ccidental discharge or overflow of water or steam from within a plumbing . . . system," or "[f]reezing of a plumbing, heating, air conditioning or automatic fire protective sprinkler system or of a household appliance," unless such a loss was the subject of an exclusion. Notwithstanding any implication in its title that an all-risk policy protects the insured from all risks, however, the policy went on to provide:

1. 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.

* * * * * *

c. Water Damage, meaning:

(1) flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind. . . .

(Emphasis added.)

USAA denied the Camerons' claim for damage to property in the basement, explaining that the loss was excluded from coverage because it was caused, directly or indirectly, by surface water.¹ Contending that they were entitled to recover on the policy because the water which damaged their basement property was not surface water, the Camerons brought suit against USAA in the Superior Court. USAA filed a motion for summary judgment.

On April 15, 1998, the trial judge granted USAA's motion in a written order in which he reasoned, in pertinent part, as follows:

The parties agree that "surface water," although not specifically defined in the contract or in the reported cases of this jurisdiction, means:

[W]ater from melted snow, falling rain or rising springs, lying or flowing naturally on the earth's surface, not gathering into or forming any more definite body of water than a mere bog, swamp, slough or marsh and lost by percolation, evaporation or natural drainage. Surface water is distinguished from the water of a natural stream, lake or pond, is not of a substantial or permanent existence, has no banks, and follows no defined course or channel.

Heller v. Fire Ins. Exchange, 800 P.2d 1006, 1008-1009 (Colo.1990). Plaintiffs contend that the water damage to their basement does not fit the above definition of "surface water" because both the damaged gutters and the patio are "defined courses or channels" which malfunctioned on the occasion in question. According to plaintiffs, the damage was therefore not caused by "surface water" and the loss is covered under Section I (Perils Insured Against) §§ (C)(11), (12), and (14). Those sections provide coverage for damage caused by weight of ice and snow, or accidental discharge, overflow, or freezing of a plumbing system, respectively.

While the damage caused by plaintiffs' broken gutters might trigger coverage under these sections, to say that the same applies to damage caused by water flowing off of the patio would stretch the terms "plumbing system" and "defined course or channel" beyond their common usage. . . . Applying common usage, it is quite apparent that plaintiffs' patio is not a "plumbing system" within the meaning of the coverage provisions of the insurance contract, and it seems equally apparent that the patio is not a "defined course or channel" so as to defeat the contract's exclusion of damage caused by "surface water."

(Citations omitted.) The Camerons filed a timely appeal.

II. LEGAL DISCUSSION

A. The Standard of review.

"On appeal from an award of summary judgment, this court conducts an independent review of the record, but the substantive standard is the same as that utilized by the trial court." Hendel v. World Plan Executive Council, 705 A.2d 656, 660 (D.C. 1997) (citation and internal quotation marks omitted). Summary judgment is warranted only when the moving party demonstrates that there is no genuine issue as to any material fact and when it is clear that he or she is entitled to judgment as a matter of law. Colbert v. Georgetown Univ., 641 A.2d 469, 472 (D.C.1994) (en banc). "In considering the motion, the judge must determine `whether a fair-minded jury could return a verdict for the [non-moving party] on the evidence presented.'" Hendel, supra, 705 A.2d at 660 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). The court views the evidence "in the light most favorable to the party opposing the motion, and that party is entitled to all favorable inferences which may reasonably be drawn from the evidentiary materials." Beard v. Goodyear Tire & Rubber Co., 587 A.2d 195, 198 (D.C. 1991) (citations omitted).

B. Coverage.

On appeal, the parties continue to adhere to the positions that they took in the trial court. They agree that the question of coverage turns primarily on the meaning of the term "surface water," as defined in Heller, supra, and quoted by the trial judge.²

(1) Principles of construction and burden of proof.

An insurance policy is a contract between the insured and the insurer, and in construing it we must first look to the language of the contract. "Where [insurance] contract language is not ambiguous. . . a written contract duly signed and executed speaks for itself and binds the parties without the necessity of extrinsic evidence." In re Corriea, 719 A.2d 1234, 1239 (D.C.1998) (citations and internal quotation marks omitted). "[U]nless it is obvious that the terms used in an insurance contract are intended to be used in a technical connotation, we must construe them consistently with the meaning which common speech comports." Id. (citations and internal quotation marks omitted). An insurance contract is not ambiguous "merely because the parties do not agree on the interpretation of the contract provision in question." Byrd v. Allstate Ins. Co., 622 A.2d 691, 694 (D.C.1993) (citation omitted); Corriea, supra, 719 A.2d at 1239.

In this jurisdiction, as elsewhere, it has long been "a general rule of construction of policies of insurance . . . that any reasonable doubt which may arise as to the meaning or intent of a condition thereof, will be resolved against the insurer." United States Mut. Accident Ass'n of the City of New York v. Hodgkin, 4 App. D.C. 516, 523 (1894), error dismissed, 17 S.Ct. 1002, 41 L.Ed. 1184 (1897). "[I]t is the insurer's duty to spell out in plainest terms — terms understandable to the man in the street — any exclusionary or delimiting policy provisions." Holt v. George Washington Life Ins. Co., 123 A.2d 619, 621 (D.C.1956) (citation omitted). "Failing such unambiguous language, doubt should be resolved in favor of the insured." Id. at 622 (citation omitted). "The rule that a real ambiguity in an insurance policy is to be construed against the company is not a rule of convenience or a mere technicality of legalists." Hayes v. Home Life Ins. Co., 83 U.S.App. D.C. 110, 112, 168 F.2d 152, 154 (1948) (Prettyman, J.). On the contrary, this rule is based on sound public policy, for the contracts in question are written by the insurers, who are "equipped with able counsel and other experts in the field," while the policyholders, who generally play no role in the drafting of such contracts "are, in vast majority, not informed in the obscurities of insurance expertise and not equipped to understand other than plain language." Id.

But "[t]he canon of construction known as contra proferentum — that ambiguities in an insurance contract should be construed against the insurer who drafted the contract — is traditionally used only in cases of doubt where other factors are not decisive." United States v. Insurance Co. of N. Am., 327 U.S.App. D.C. 383, 389 n. 11, 131 F.3d at 1037, 1043 n. 11 (1997) (internal quotation marks and ellipsis omitted) (quoting RESTATEMENT (SECOND) OF CONTRACTS § 206 cmt. a (1979)). We have stated that this...