Clasing v. State Farm Fire and Casualty Company, No. 8-1060/08-1237 (Iowa App. 5/29/2009)
| Decision Date | 29 May 2009 |
| Docket Number | No. 8-1060/08-1237.,8-1060/08-1237. |
| Parties | JAY AND DEANNA CLASING, Husband and Wife, d/b/a JADE FARMS, Plaintiffs-Appellants, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant-Appellee. |
| Court | Iowa Court of Appeals |
Appeal from the Iowa District Court for Palo Alto County, Patrick M. Carr, Judge.
Plaintiffs appeal the district court`s grant of summary judgment to defendant on their action alleging breach of an insurance contract. REVERSED AND REMANDED.
Terry A. White and David A. Domina of Domina Law Group, P.C., Omaha, Nebraska, and Michael R. Bovee of Montgomery, Barry & Bovee, Spencer, for appellants.
Guy R. Cook and Allison J. Doherty of Grefe & Sidney, P.L.C., Des Moines, for appellee.
Heard by Sackett, C.J., and Vogel and Miller, JJ.
The plaintiffs appeal the district court`s grant of summary judgment to the defendant on their action alleging breach of an insurance contract. They contend the court erred in granting summary judgment because (1) the proximate cause of the loss of their hogs was an ice storm, not suffocation, (2) a dispute of material fact existed whether their hogs suffocated or died of heat stroke, and (3) the defendant insurer did not carry its burden to show it was entitled to judgment as a matter of law. We reverse the grant of summary judgment and remand.
We review the district court`s ruling on a motion for summary judgment for correction of errors at law. Jones v. State Farm Mut. Auto. Ins. Co., 760 N.W.2d 186, 188 (Iowa 2008). The moving party is entitled to a judgment as a matter of law "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact."s Iowa R. Civ. P. 1.981(3); see also Rodda v. Vermeer Mfg., 734 N.W.2d 480, 483 (Iowa 2007). A fact question exists "if reasonable minds can differ on how the issue should be resolved." Rock v. Warhank, 757 N.W.2d 670, 673 (Iowa 2008). An issue of fact is "material" only when its resolution might affect the outcome, given the applicable governing law. Weddum v. Davenport Cmty. Sch. Dist., 750 N.W.2d 114, 117 (Iowa 2008). We view the record in the light most favorable to the non-moving party. Kern v. Palmer College of Chiropractic, 757 N.W.2d 651, 657 (Iowa 2008). In determining whether there is a genuine issue of material fact, the court affords the non-moving party every legitimate inference from the record. Id.
Viewed in the light most favorable to the non-moving party, the summary judgment record reveals the following. The plaintiffs, Jay and Deanna Clasing, operate a hog confinement operation under the name Jade Farms. In late 2006 there was a fire in their office, necessitating repairs. On February 26, 2007, when an ice storm caused a power outage, the alarm system for the operation`s four swine barns was not operating because of repairs to the office. In three of the four barns, ceramic curtains dropped when the electricity failed, allowing the swine barns to ventilate despite the loss of power. In the fourth barn, ice prevented the curtain from dropping to allow ventilation. The temperature in the unventilated barn rose quickly. 659 of the 1900 hogs in that barn died. Jade Farms estimated it suffered a loss of $109,066 from the death of the hogs.
Jade Farms filed a claim with its insurer, State Farm Fire and Casualty Company. State Farm denied the claim based on an exclusion in the insurance policy for loss to livestock caused by "suffocation." Jade Farms then sued State Farm, alleging breach of contract and bad faith. Jade Farms claimed the hogs did not suffocate, but rather died "because inadequate ventilation into the building occurred due to an insured occurrence."
State Farm moved for summary judgment. The district court granted State Farm`s motion for summary judgment. It analyzed the language of the contract to determine whether there was coverage. The court noted that "a legal cause of the death of the animals" was "an accumulation of ice." (Emphasis added.) It concluded "[t]he loss is thus covered under the insuring clause, unless excluded." The court then framed the issue as, "whether the death of the animals was "caused` by suffocation within the meaning of the exclusion in the policy." The court found 1 (Emphasis added.) In support of its conclusion that there was no material dispute on whether the hogs suffocated, the court pointed to evidence from a recorded statement by Jay Clasing, in which he answered "Yes" to the question, "So there`s really no question as to the hogs suffocated." The court also considered language from paragraph twenty of the plaintiffs` petition alleging an "insured occurrence" caused the conditions that led to the hogs` "suffocation as that term is used in the insurance policy." The court granted summary judgment in favor of State Farm. The plaintiffs appeal.
Appellants contend the court misapplied proximate cause analysis when it found "a legal cause" of the loss was the ice storm, but then excluded coverage based on the loss being "directly and immediately" cause by an excluded peril— suffocation. "The doctrine of proximate cause is applied differently in insurance cases than in tort cases." Bettis v. Wayne County Mut. Ins. Ass'n, 447 N.W.2d 569, 571 (Iowa Ct. App. 1989).
In insurance law it is generally understood that where the peril insured against sets other causes in motion which, in an unbroken sequence and connection between the act and final loss, produces the result for which recovery is sought, the insured peril is regarded as the proximate cause of the entire loss.
Qualls v. Farm Bureau Mut. Ins. Co., 184 N.W.2d 710, 713 (Iowa 1971). When the cause sought is the direct and proximate cause, it is not necessarily the cause or agency that is nearest in time or place to the result, since the dominant cause may be concurrent or remote in point of time or place. Bettis, 447 N.W.2d at 571. Thus we look not necessarily to the last act in a chain of events, but rather to the predominant cause that set in motion the chain of events that caused the loss. Id. However, "[i]n an insurance policy, direct cause means immediate cause or proximate cause, as distinguished from remote cause." Id. ""Direct` as used in an insurance policy relates to causal connection and is to be interpreted as the immediate or proximate cause as distinguished from the remote cause." Id. (quoting John Drennon & Sons Co. v. New Hampshire Ins. Co., 637 S.W.2d 339, 341 (Mo. Ct. App. 1982)).
Appellants argue the "cause" of their loss was an "insured occurrence," the loss of power and failure of the ceramic curtains to drop because of the accumulation of ice from the ice storm. They argue this "cause" set in motion the chain of events that resulted in the death of the hogs. They contend suffocation was not an independent, intervening act.2 Appellants argue the district court`s reasoning starts the causation analysis midstream, in the middle of the unbroken chain of events caused by an insured occurrence.
The district court found the ice storm was a legal cause of the loss, but the death of the hogs was "directly and immediately caused" by suffocation.3 It then concluded the policy exclusion for "suffocation" applied, so there was no coverage. The question of proximate cause is ordinarily for the jury—only in exceptional cases should it be decided as a matter of law. See Clinkscales v. Nelson Securities, Inc., 697 N.W.2d 836, 841 (Iowa 2005).
We agree with the district court`s conclusion the loss of the hogs is covered under the insuring clause of the contract unless excluded. The question remains whether the court properly determined there was no genuine issue of material fact as to the applicability of the exclusion for suffocation.
The district court found there was no genuine issue of...
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