2017 COA 15
Colo. Ct. App.2017Background
- Homeowner Michael Martinez sued insurer American Family after a severe thunderstorm (hail and rain) caused water to enter his finished basement through below-ground windows surrounded by window wells.
- Martinez claimed hail filled the window wells and prevented drainage, so rainwater (allegedly never touching the ground) accumulated and entered the basement, damaging the home and personal property.
- American Family denied the claim, invoking the policy’s Water Damage exclusion for “flood” and “surface water.”
- The district court granted American Family’s motion for summary judgment, finding the loss was caused by “surface water” and thus excluded.
- Martinez appealed, arguing (1) the loss was not caused by surface water, and (2) even if it was, the water lost that character when it entered the window wells.
- The Court of Appeals affirmed, holding the precipitation (including melted hail) was surface water and window wells did not transform its character.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the water that damaged the home was "surface water" under Heller | Martinez: Precipitation fell on roof or into wells but never lay "on the earth's surface," and melted hail is not the surface-water precipitation Heller contemplated | American Family: Precipitation (rain and melted hail) collected on roof/window wells is surface water under Heller | Held: Precipitation (including melted hail) is surface water; rooftop counts as earth's surface for Heller analysis |
| Whether water entering window wells loses its character as surface water (Heller trench analogy) | Martinez: Window wells are man-made and thus change the water’s character when they collect/retain it, making Heller’s trench reasoning applicable | American Family: Window wells are not defined channels like Heller’s trenches and do not convert surface water into a different category | Held: Window wells here did not create a defined channel or banks like Heller trenches; water retained its surface-water character and exclusion applied |
Key Cases Cited
- Heller v. Fire Ins. Exch., 800 P.2d 1006 (Colo. 1990) (defines "surface water" and holds water diverted into man-made defined trenches may lose surface-water character)
- Novell v. Am. Guar. & Liab. Ins. Co., 15 P.3d 775 (Colo. App. 1999) (discusses all-risk policy coverage approach)
- Sachs v. Am. Family Mut. Ins. Co., 251 P.3d 543 (Colo. App. 2010) (policy construction principles; read provisions harmoniously)
- Greenwood Tr. Co. v. Conley, 938 P.2d 1141 (Colo. 1997) (summary judgment initial burden of production standard)