249 A.3d 106
Del.2021Background
- In 2011 Eric and Dana Monzo purchased a Nationwide homeowners policy that included optional "Option R" water-backup coverage (paid premium) and contained standard earth-movement and water/water-borne-material exclusions plus an anti-concurrent-causation (ACC) clause.
- On July 23, 2017, a thunderstorm caused damage at the Monzos’ Greenville property: one pedestrian bridge collapsed, a second bridge was severely damaged, and a stone retaining wall that enclosed drainage pipes partially collapsed.
- The Monzos submitted a claim; Nationwide denied coverage, citing the earth-movement and water exclusions and the ACC clause. Nationwide and the Monzos each retained engineers whose reports identified overlapping but not identical causes (scouring/erosion, heavy rain, drainage backup, and water-borne debris).
- The Monzos sued in Superior Court seeking coverage under the homeowners policy (bad-faith claim later dismissed). The Superior Court granted Nationwide summary judgment as to both the bridge and the retaining wall, finding excluded earth movement and water damage contributed and the ACC clause barred coverage; the Monzos’ post-judgment Rule 59 motion was denied.
- On appeal the Delaware Supreme Court affirmed summary judgment as to the pedestrian bridge (earth movement/ACC dispositive), reversed as to the retaining wall (triable issue whether Option R water-backup, a covered peril, was the sole cause), and affirmed the denial of the Rule 59 motion.
Issues
| Issue | Monzo's Argument | Nationwide's Argument | Held |
|---|---|---|---|
| Whether excluded "earth movement" bars recovery for collapsed pedestrian bridge | Bridge collapse was not covered because earth-movement exclusion does not unambiguously encompass "scouring/erosion" and listed items only apply | Scouring of embankments is "earth shifting"/"earth movement"; undisputed evidence shows scouring contributed | Affirmed: scouring is earth movement; exclusion applies and, because ACC applies, coverage barred |
| Whether water/water-borne-material exclusion or Option R covers retaining wall collapse | Option R covers damage from backup of drains/sump pump that caused retaining wall collapse; thus coverage exists for other structures | Exclusions apply (water-borne material, flood); Option R either doesn't cover other structures or only covers artificial sources | Reversed: triable issues exist whether a covered Option R backup (drains/sump/surface runoff) alone caused the wall’s collapse; summary judgment improper |
| Whether summary judgment was premature given ongoing discovery | More discovery (other policies, agent negotiations, Cornerstone file) could change coverage analysis | Complaint limited relief to homeowners policy; additional discovery would not change whether exclusions or Option R apply | Affirmed as to bridge: summary judgment not premature; additional discovery would not alter result; but retaining wall required further factfinding |
| Whether Superior Court abused discretion in denying Rule 59 motion (challenge to reliance on Roland report; hearsay/authentication) | Roland’s report was incomplete, unauthenticated, hearsay; court improperly relied on it and should have reopened record | Monzos relied on Roland’s report themselves; they conceded key points at oral argument; evidentiary objections were untimely | Affirmed: denial not an abuse—arguments rehashed prior positions, admissibility objections were untimely and would not alter outcome on bridge |
Key Cases Cited
- In re Solera Ins. Coverage Appeals, 240 A.3d 1121 (Del. 2020) (principles of insurance contract interpretation)
- O'Brien v. Progressive N. Ins. Co., 785 A.2d 281 (Del. 2001) (contra proferentem and policy construction rules)
- Emmons v. Hartford Underwriters Ins. Co., 697 A.2d 742 (Del. 1997) (clarifying insurer drafting obligations and interpretation)
- Rhone–Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192 (Del. 1992) (contract interpretation principles applied to insurance exclusions)
- Homeland Ins. Co. of N.Y. v. CorVel Corp., 197 A.3d 1042 (Del. 2018) (summary judgment standard and review)