228 A.3d 983
R.I.2020Background
- On May 6, 2017 a malfunctioning water heater leaked and flooded Robin Nelson’s Providence basement.
- Nelson held a homeowner’s policy from Allstate; Allstate denied coverage, asserting the loss was not a covered peril.
- Nelson sued Allstate for breach of contract in Providence Superior Court.
- Allstate moved for summary judgment, arguing the policy’s coverage clause and exclusions unambiguously excluded this type of water-damage loss; the hearing justice granted that motion.
- The Rhode Island Supreme Court reviewed the grant of summary judgment de novo and affirmed, holding the policy unambiguous and the water-heater leak not a covered loss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the homeowner policy covers damage caused by a malfunctioning water heater | Nelson: the policy covers "sudden and accidental direct physical loss," and her loss is not among the policy's explicit exclusions | Allstate: the policy lists covered perils and water-related exclusions; a malfunctioning appliance leak is not a listed covered peril and is excluded by the policy's water exclusions | Court: Affirmed for Allstate — the policy is unambiguous and the loss is not covered |
| Whether any ambiguity exists requiring construction in favor of the insured | Nelson: policy should be read broadly; not every conceivable loss can be listed, so ambiguity favors coverage | Allstate: policy language is clear; courts should not create ambiguity by strained readings | Court: No ambiguity; will not stretch to read ambiguity into plain policy language; literal terms govern |
Key Cases Cited
- JHRW, LLC v. Seaport Studios, Inc., 212 A.3d 168 (R.I. 2019) (summary-judgment standard and de novo review)
- Cancel v. City of Providence, 187 A.3d 347 (R.I. 2018) (summary-judgment principles)
- Medical Malpractice Joint Underwriting Ass'n of R.I. v. Charlesgate Nursing Ctr., L.P., 115 A.3d 998 (R.I. 2015) (insurance policies are contracts; interpret under contract rules)
- Derderian v. Essex Ins. Co., 44 A.3d 122 (R.I. 2012) (give words their plain, ordinary, usual meaning in policy interpretation)
- Nunez v. Merrimack Mut. Fire Ins. Co., 88 A.3d 1146 (R.I. 2014) (courts will not depart from literal policy language absent ambiguity)
- DePasquale v. Am. Cas. Co. of Reading, PA, Inc., 764 A.2d 180 (R.I. 2000) (policy exclusions can foreclose coverage for ruptured pipes and similar water losses)
- Koziol v. Peerless Ins. Co., 41 A.3d 647 (R.I. 2012) (court will not stretch to read ambiguity into a policy)