Employers Cas. Co. v. Holm

• Citation: 393 S.W.2d 363
• Decision Date: 08 July 1965
• Docket Number: No. 14602,14602
• Parties: EMPLOYERS CASUALTY COMPANY, Appellant, v. Herbert E. HOLM, Appellee.
• Court: Court of Appeals of Texas. Court of Civil Appeals of Texas

Page 363

393 S.W.2d 363

EMPLOYERS CASUALTY COMPANY, Appellant, v. Herbert E. HOLM, Appellee.

No. 14602.

Court of Civil Appeals of Texas, Houston.

July 8, 1965.

Fulbright, Crooker, Freeman, Bates & Jaworski, William H. Payne, Charles Boston, Houston, for appellant.

William R. Powell, Foreman, Dyess, Prewett, Henderson & Cantey, Houston, of counsel, for appellee.

WERLEIN, Justice.

Appellee, Herbert E. Holm, brought this suit against Employers Casualty Company to recover for damage to his home under a policy which insured appellee against 'all risks of physical loss' to his home except as excluded in that part of the policy pertinent hereto providing that the insurance shall not cover, among other things:

'i. Loss caused by inherent vice, wear and tear, deterioration; rust, rot, mould or fungi; dampness of atmosphere, extremes of temperature; contamination; vermin, termites, moths or other insects;

'k. Loss under coverage A caused by settling, cracking, bulging, shrinkage, or expansion of foundations, walls, floors, ceilings, * * *'

'* * * and Exclusions i, j and k shall not apply to ensuing loss caused by * * * water damage * * * provided such losses would otherwise be covered under this policy.'

The case was submitted to the trial court on a stipulation of facts which was adopted by the court. The court entered judgment for appellee based on the stipulation of the parties and certain conclusions of law to the effect that all items of loss sued for were covered by the insurance policy in question. It was stipulated among other things:

'III.

'The house insured by the policy in question, at 8833 Chatsworth Drive, Houston, Texas, was constructed without a shower pan under the shower stall.

'IV.

'Neither the insurer nor the insured knew at the time the contract of insurance was made that there was no shower pan beneath the shower floor.

'V.

'The construction and installation of the tile shower floor and drain pipe in the insured's house was inherently defective in that it was inevitable that without the intervention of any fortuitous or chance occurrences, water would pass through the floor and/or drain into the onto the cement base on which the tile floor was laid. This, in fact, is what occurred in the insured's house.

'VI.

'The absence of the shower pan made it inevitable that the water which passed into and onto the cement below the shower would pass laterally into and under the wood and cork flooring of the assured's house. This, is fact, is what occurred in the insured's house.

'VII.

'The water passing into and under the wood flooring of the insured's house caused same to rot and deteriorate to the point where good judgment dictated its replacement.

'VIII.

'Had a shower pan been installed in the insured's shower stall, the damage to the surrounding floor of insured probably would not have occurred.

'IX.

'The sum of $180.00 was the sum expended for the plumbing work involved in tearing out the tile floor, breaking into the concrete slab on which the house was built for the purpose of installing a new lead waste line, and installing a lead shower pan and in looking for the cause of the leak. The actual cost of the pan is not claimed in this action and is not included in the $180.00 figure. This plumbing operation was directed solely at finding the cause of the leak and at stopping the passage of water into surrounding floor. If this expense is found to be covered by the policy in question, the amount thereof is not an issue.

'X.

'The sum of $165.00 was expended by the insured in having the tile torn out by the plumber replaced. If this expense is found to be covered by the policy in question, the amount thereof is not an issue.

'XI.

'The sum of $355.00 is the amount which will be required to replace the damaged floor. If this expense is found to be covered by the policy in question, the amount thereof is not an issue.'

The loss resulted from the construction of the shower stall without a shower pan. This constituted an inherent defect unknown to either party but one which would and did inevitably cause water to pass laterally into and under the wood and cork flooring of the insured's house thereby causing the same to rot and deteriorate to the point where the damaged floor had to be replaced at an expense of $355.00. The policy excludes loss caused by inherent vice, deterioration and rot as shown in exclusion 'i.' supra, so that there can be no recovery by appellee unless the loss comes within the exception to the exclusion. The exception is that exclusion 'i.' shall not apply to ensuing loss caused by water damage-provided such loss would otherwise be covered under the policy.

In McKool v. Reliance Insurance Company, Tex.Civ.App., 1965, 386 S.W.2d 344, dism., the loss was due to chipping and cracking of ceramic tile affixed to the walls of a swimming pool caused by freezing of water in the pool. The policy contained the same pertinent provisions as the policy in the instant case. The insured contended that the damage was caused by ice which is solidified water, and therefore caused by 'water damage', thus making inapplicable the exclusions of loss by 'extremes of temperature' and by 'cracking.' The court held that the tile having cracked because of the extreme cold or ice, there could be no recovery therefor, but if water had entered through the cracks thus caused, the ensuing losses (meaning losses which follow or come afterwards as a consequence) caused by the entry of water would be recoverable, since that would be loss caused by water damage ensuing after the uninsured sured cracking of the tile. The judgment of the trial court denying recovery was affirmed.

In Aetna Casualty & Surety Co. v. Yates, 5 Cir. 1965, 344 F.,2d 939, the plaintiffs discovered that the joists, sills and subflooring of their home were almost completely rotted away due to the fact that the 'crawl space' under the house was inadequately supplied with vents. Contact between air trapped in the crawl space and subfloors and sills which had been chilled by air conditioning, produced condensation of moisture and consequent rotting. The court in ordering the complaint dismissed said that the rot may have ensued from water but not from water damage, and the damage ensuing from the rot was not the damage from the direct intrustion of water conveyed by the phrase 'water damage.'

The instant case is distinguishable from the McKool and Yates cases cited by appellant. The parties in the present case stipulated that the water passing into and under the wood flooring of appellee's house caused same to rot and deteriorate. It is a matter of common knowledge that the more or less continual application of water to and against the wooden flooring of a house would cause warping and cracks and water damage thereto which finally would result in rot and deterioration. The loss which ensued or followed the water damage grew out of and was caused by water damage. Hence the exception or exclusion to the exclusion (i) should apply. The water damage in this case would be covered by the policy since it is not within exclusion (d) which excludes certain other kinds of water damage. It thus comes within the proviso in the exception to the exclusion in that the water damage loss would otherwise be covered under the policy. See Sabella v. Wisler, 1963, 59 Cal.2d 21, 27 Cal.Rptr. 689, 377 P.2d 889.

Appellant contends that the loss was caused by inherent vice which constitutes an exclusion under (i). The parties stipulated that the construction and installation of the tile shower and drain pipe in the house was defective. The inherent vice was in the shower stall. No recovery was allowed by the trial court for the cost of the shower pan which was installed. Recovery was allowed for replacing the damaged floor. No contention is made that there was any inherent vice in the floor which suffered water damage. It is true that the parties stipulated that the inherent defect in the shower made it inevitable that water would pass into and onto the cement below the shower and into and onto the wood and cork flooring of the assured's house. But the loss was not caused by inherent vice in the floor but by inherent vice in another part of the house for which no recovery was allowed. For example, if it be assumed...