20 N.E.3d 182
Ind. Ct. App.2014Background
- Samses built a home in Howe, Indiana in 1998.
- April 12, 2012 windstorm caused roof shingles to blow off, siding damage, and water intrusion with mold growth.
- Samses filed a claim under Erie Ultracover HomeProtector policy in June 2012, including replacement cost coverage for the dwelling.
- Erie paid partial claims: siding repair, roof shingles, interior water damage, insulation, and a $5,000 mold remediation cap; total replacement cost observed by Erie was $13,822.90 and ACV paid was $10,937.15 (plus tarp costs).
- Erie later determined, after obtaining a forensic engineer, that the Deterioration and Faulty Materials Exclusions applied and denied most coverage; Samses proceeded to a bench trial.
- The trial court found the loss was caused by the storm, the policy covered the storm damage, and awarded $63,924.89 in replacement cost.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether storm damage is excluded by deterioration or faulty materials. | Samses; storm caused the damage and exclusions do not apply. | Erie; deterioration and faulty materials caused or contributed to the loss, excluding coverage. | Not clearly erroneous; storm damage covered despite exclusions. |
| Whether replacement cost award of $63,924.89 was proper. | Replacement cost applies to the damaged roof, siding, and cathedral ceiling. | Replacement cost should be limited to damaged parts, not whole-house replacement costs; MSR requires matching scope per policy. | Not clearly erroneous; replacement cost awarded for entire roof, siding, and cathedral ceiling as the insured property. |
Key Cases Cited
- Meridian Mut. Ins. Co. v. Auto-Owners Ins. Co., 698 N.E.2d 770 (Ind. 1998) (strict construction against insurer; ambiguities resolved in insured's favor)
- Associated Aviation Underwriters v. George Koch Sons, Inc., 712 N.E.2d 1071 (Ind. Ct. App. 1999) (when reviewing factual findings, do not reweigh credibility; support required by the record)
- Buckeye State Mut. Ins. Co. v. Carfield, 914 N.E.2d 315 (Ind. Ct. App. 2009) (two-tier review for findings and conclusions; clear error standard)
- Travelers Indem. Co. v. Armstrong, 442 N.E.2d 349 (Ind. 1982) (replacement cost coverage rationale and betterment concern explained)
- Argonaut Ins. Co. v. Jones, 953 N.E.2d 608 (Ind. Ct. App. 2011) (interpretation of insurance policy terms; harmonize provisions)