95 So. 3d 290
Fla. Dist. Ct. App.2012Background
- Lloyd's appeals a declaratory judgment awarding Pitu, Inc. $1,240,199.67 plus interest for water damage after a pipe rupture; policy limits water damage to $25,000 under an endorsement.
- May 29, 2009, Lloyd’s issued an all-risk homeowner policy to Pitu for a Miami-Dade dwelling; a burst pipe caused extensive water damage to dwelling and personal property.
- Lloyd’s acknowledged the loss was covered but estimated $673,378.28; it paid only $25,000 due to the water-damage endorsement.
- Pitu sued for breach of contract and for declaratory relief arguing the endorsement provided $25,000 in coverage for water damage that would otherwise be excluded; the trial court granted relief to Pitu.
- The policy’s Coverage A (dwelling) and Coverage C (personal property) are subject to various exclusions; the endorsement states a $25,000 aggregate limit for water damage during the policy term.
- The court held the endorsement unambiguously limits recovery to $25,000, reversing the judgment in Pitu’s favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the water-damage endorsement cap coverage at $25,000? | Pitu contends the endorsement expands coverage for water damage. | Lloyd’s argues the endorsement sets a hard $25,000 aggregate limit for water damage. | Endorsement unambiguously caps at $25,000. |
| Is the endorsement triggered by water damage arising out of or caused by the pipe? | Pitu argues the pipe break is the proximate cause rendering endorsement inapplicable. | Lloyd’s maintains the loss is within the water-damage scope of the endorsement. | Endorsement applies to losses arising out of water damage, regardless of proximate cause. |
Key Cases Cited
- State Farm Mut. Auto. Ins. Co. v. Menendez, 24 So.3d 809 (Fla. 3d DCA 2010) (interpretation of insurance contracts is a question of law; de novo review)
- State Farm Mut. Auto. Ins. Co. v. Reis, 926 So.2d 415 (Fla. 1st DCA 2006) (de novo review for construing insurance contracts)
- Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So.2d 528 (Fla. 2005) (‘arising out of’ means origin or connection, not proximate cause)
- State Farm Mut. Auto. Ins. Co. v. Mashburn, 15 So.3d 701 (Fla. 1st DCA 2009) (policy should be construed in context with entire terms)
- Gen. Star Indem. Co. v. W. Fla. Vill. Inn, Inc., 874 So.2d 26 (Fla. 2d DCA 2004) (policy language interpreted in light of plain meaning and surrounding terms)
- Hagen v. Aetna Cas. & Sur. Co., 675 So.2d 963 (Fla. 5th DCA 1996) (‘arising out of’ broader than ‘caused by’)
- Nat’l Indem. Co. v. Corbo, 248 So.2d 238 (Fla. 3d DCA 1971) (definition of ‘arising out of’ in insurance coverage)