Powell v. Liberty Mutual Fire Insurance
127 Nev. 156
| Nev. | 2011Background
- Powell's Liberty Mutual homeowners policy includes an earth movement exclusion and a settling clause.
- Powell's water pipe burst in July 2005, causing basement flooding and foundation/wall cracks.
- Powell claimed the damage was caused by the pipe-related moisture, not earth movement; she sought coverage.
- Liberty Mutual denied the claim citing the earth movement exclusion and the settling clause.
- The district court granted partial summary judgment to Liberty Mutual on the theory that earth movement excluded the damage; other issues remained for trial.
- Powell appealed, contending the earth movement exclusion is ambiguous and not applicable to pipe-induced moisture-related damage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the earth movement exclusion ambiguous and thus construed against insurer? | Powell argues exclusion is ambiguous and may not cover pipe-induced soil effects. | Liberty Mutual argues exclusion is clear and applies to earth movement regardless of cause. | Yes, ambiguous; construed against Liberty Mutual. |
| Does Schroeder control whether soil movement from a ruptured pipe is excluded? | Powell asserts Schroeder applies and excludes pipe-induced soil movement. | Liberty Mutual argues Schroeder is distinguishable; not controlling. | Schroeder distinguished; not controlling here. |
| Did Liberty Mutual fail to prove the exclusion clearly applies to Powell's damage? | Powell contends the exclusion lacks clear, unambiguous scope. | Liberty Mutual contends the exclusion should be read narrowly against Powell due to anti-concurrent clause. | Yes, exclusion not clearly applicable; district court erred. |
Key Cases Cited
- Peters Tp. School Dist. v. Hartford Acc. & Indem., 833 F.2d 32 (3d Cir. 1987) (earth movement exclusion context in multi-party claims)
- Neal v. Farmers Ins. Exch., 64 P.3d 472 (Nev. 2003) (policy ambiguities interpreted against insurer; coverage broadly construed)
- United Nat'l Ins. v. Frontier Ins. Co., 99 P.3d 1153 (Nev. 2004) (interpretation of insurance policy terms; anti-concurrent clauses)
- Chase v. State Farm Fire and Cas. Co., 780 A.2d 1123 (D.C.2001) (clarity in earth movement exclusions; natural vs. artificial causation)