Koziol v. Peerless Insurance
41 A.3d 647
| R.I. | 2012Background
- Koziol et al. owned a home and had Peerless Homeowners Ultra Plus coverage.
- Framing subcontractor's faulty work led to code noncompliance and extra repair costs.
- Plaintiffs filed a declaratory-judgment action after Peerless denied coverage under two exclusions.
- Trial judge held the policy was ambiguous, construing it against the insurer and entering judgment for plaintiffs.
- Superior Court judgment affirmed; Peerless appealed to Rhode Island Supreme Court.
- Court analyzes coverage summary within Ultra Plus endorsement and overall policy for ambiguity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Ultra Plus summary ambiguous about ordinance/law coverage? | Koziol argues summary makes ordinance coverage include after loss. | Peerless contends summary is clear that coverage applies only to covered losses. | Ambiguous; insured entitled to coverage for required code-compliance repairs. |
| Does the faulty-workmanship exclusion become ambiguous when read with the summary? | Summary suggests broad coverage; exclusion unclear when integrated with endorsement. | Exclusion unambiguously excludes faulty workmanship losses. | Ambiguity; reading together yields reasonable interpretation for coverage. |
| Do ordinance or law exclusion and summary create ambiguity regarding loss and coverage? | Endorsement includes ordinance/law coverage; exclusion would be overridden. | Exclusion applies regardless, unless policy explicitly provides otherwise. | Ambiguity remains; insured entitled to coverage for code-compliance repairs. |
Key Cases Cited
- Mallane v. Holyoke Mutual Insurance Co., 658 A.2d 18 (R.I.1995) (declaration page ambiguity governs when misalignment with boilerplate policy)
- Grenga v. Sentry Insurance Co., 556 A.2d 998 (R.I.1989) (coverage summary integrated into policy; consumer reasonable expectations)
- Streicker v. Amica Mutual Insurance Co., 583 A.2d 550 (R.I.1990) (interpretation of information digest; ambiguity analysis relevance)
- Bliss Mine Road Condominium Association v. Nationwide Property and Casualty Insurance Co., 11 A.3d 1078 (R.I.2010) (ambiguity reviewed de novo and construed in insured's favor)
- Sullivan v. Aetna Casualty & Surety Co., 633 A.2d 686 (R.I.1993) (contract ambiguity rule; strict construction against insurer)