Thе Appellant, Margaret Liebel, f/k/a Margaret Kennedy, appeals a final judgment whereby the trial court found, by way of summary judgment, that an all-risk insurance policy of the Appellee, Nationwide Insurance Company of Florida (hereinafter commonly referred to as “the Policy”), covered a loss to Liebel’s home caused by a ruptured water line beneath it, but that the loss was excepted from coverage by the policy’s earth movement exclusion. On appeal, Liebel contests the propriety of that finding, alleging that: (1) the Policy covers her loss, (2) the loss is not excepted from coverage under the earth movement exception, and (3) the trial court erred by not finding that the cost of repairing the water line, i.e., a plumbing system, was covered by the Policy. Although we agree that if the loss were only related to earth movement, it would be excluded by the earth movement exception, we find that the trial court erred in concluding the earth movement exception specifically excluded coverage for the cost of tearing out and replacing any part of the house necessary to repair the ruptured water line.
On or about February 14, 2003, Liebel, while moving a couch in her living room, discovered a wide gap between the floor
Prior to this incident, Liebel purchased homeowner’s insurance from Nationwide. The Policy was an “all-risk” policy. This means that “[u]nless the policy expressly excludes the loss from coverage, this type of policy provides coverage for all fortuitous lоss or damage other than that resulting from willful misconduct or fraudulent acts.”
Fayad v. Clarendon Nat. Ins. Co.,
Liebel notified Nationwide and sought coverage under the Policy. On March 25, 2003, and April 1, 2003, Nationwide had Liebel’s home inspected by an engineer. Based on the information obtained from the inspections, Nationwide denied coverage for the loss to Liebel’s home. It stаted that the loss to Liebel’s home was specifically excluded under the Policy. The applicable exclusions are as follows:
1. We do not cover loss to any property resulting directly or indirectly from any of the following. Such a loss is excluded even if another cause or event contributed concurrently or in any sequenсe to cause the loss,
a) Earth Movement and Volcanic Eruption. Earth movement means: earth movement due to natural or unnatural causes, including mine subsidence; earthquake; landslide; mudslide; earth shifting, rising or sinking (other than sinkhole collapse). Volcanic eruption means: eruption; or discharge from a volcano.
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3. We do not cover loss to property described in Coverages A and B resulting directly from any of the following:
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e) Continuous or repeated seepage or leakage of water or steam over a period of time from a heating, air conditioning or automatic fire protective sprinkler system; household appliance; or plumbing system that results in deterioration, rust, mold, or wet or dry rote [sic]. Seepage or leakage from, within, or around any shower stall, shower tub, tub installation or other plumbing fixture, including their walls, ceilings or floors, is also excluded.
If loss caused by water or steam is not otherwise excluded, we will cover the cost of tearing out and replacing any part of thе building necessary to repair or replace the system or appliance. We do not cover loss to the system or appliance from which the water or steam escaped.
f) (1) wear and tear, marring, deterioration;
(2) inherent vice, latent defect, mechanical breakdown;
(3) smog, rust, mold, wet or dry rot;
(4) smoke from agricultural smudging or industrial operations;
(5) release, discharge, or dispersal of contaminants or pollutants;
(6) settling, cracking, shrinking, bulging or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings; or
(7) birds, vermin, rodents, insects or domestic animals. Resulting breakage of glass constituting part of a covered building is covered.
If any items f)(l) through (7) cause water to escape from a plumbing, heating, air conditioning or automatic fire protective sрrinkler system or household appliance, we cover loss caused by the water not otherwise excluded. We also cover the cost of tearing out and replacing any pari of a building necessary to repair the system or appliance. We do not cover loss to the system or appliance from which the wаter escaped.
Under exclusions 3.a) through 3.f), any loss that follows is covered unless it is specifically excluded.
(emphasis added).
Liebel filed suit for breach of insurance contract, alleging that Nationwide failed to pay her for all of the losses she sustained as provided for in the Policy. Nationwide answered, citing as affirmative defenses the exclusion provisions stated above. This was followed by Liebel’s Motion for Summary Judgment, where she alleged that the facts were undisputed and, as a matter of law, she was entitled to judgment in her favor because the loss to her home fell within an area that the Policy covers and it was not otherwise exempt from coverage via one оf the Policy’s exclusions. Nationwide filed a cross-motion for summary judgment. In it, Nationwide conceded that the facts are undisputed and argued that, as a matter of law, it was entitled to judgment because the loss sustained by Liebel was excluded from coverage by way of the Policy’s exclusions. Lie-bel filed a second motion for summary judgment. In that mоtion, she argued that her loss was covered by the Policy because the Policy states: “We also cover the cost of tearing out and replacing any part of a building necessary to repair the system or appliance.” Liebel contended that this statement encompassed coverage for repairs to рlumbing systems, such as her water line.
After a hearing on these motions, the trial court rendered an order whereby it denied Liebel’s Motion for Summary Judgment, granted Nationwide’s Cross-Motion for Summary Judgment, and denied Lie-bel’s Second Motion for Summary Judgment. It then entered a final judgment in favor of Nationwide, finding that the Policy’s earth movement exclusion operated to deny coverage for Liebel’s loss because it specifically includes natural and unnatural causes and defined earth movement to include “earth shifting” and “rising and sinking.” The trial court reasoned that the damage to Liebel’s home fit within this exclusion because it was caused by earth shifting that was generated from an unnatural cause, i.e., the rupturing of the water line beneath Liebel’s home. The trial court considered whether section (3)(f) of the policy covered the cost of repairing the ruptured water line underneath Liebel’s home, as that section of the Policy covered those costs of repairing a plumbing system that has deteriorated from wear and tеar. However, it held that this provision does not cover the cost of repairing the plumbing system because, in accordance with section (3)(f)’s language, such coverage is available if “not otherwise excluded,” the loss was otherwise excluded via the earth movement exclusion.
We review this appeal under the de novo standard of review, as “[a]n appellate court reviews de novo the propriety of the grant of summary judgment.”
State Farm Mut. Auto. Ins. Co. v. Colon,
The type of policy at issue here is an all-risk policy. “Unless the рolicy expressly excludes the loss from coverage, this type of policy provides coverage for all fortuitous loss or damage other than that resulting from willful misconduct or fraudulent acts.”
See Fayad,
In order to decide “whether an all-risk policy excludes coverage for an insured’s claimed damages,” courts are “guided by well-established principles of insurance contract interpretation.”
Id.
at 1086. The “guiding principle” of insurance contract interpretation is “that insurance contracts are construed in accordance with ‘the plain language of the policfy] as bargained for by the parties.’ ”
Id.
(quoting
Auto-Owners Ins. Co. v. Anderson,
if the salient policy language is susceptible to two reasonable interpretations, one providing coverage and the other excluding coverage, the policy is considered ambiguous. Ambiguous coverage prоvisions are construed strictly against the insurer that drafted the policy and liberally in favor of the insured. Further, ambiguous “exclusionary clauses are construed even more strictly against the insurer than coverage clauses.” Thus, the insurer is held responsible for clearly setting forth what damages are excluded from coverage under the terms оf the policy.
Id.
(quoting
Anderson,
In this case, the trial court was correct in holding that the Policy’s earth movement exclusion included the loss to Liebel’s home, as the plain and unambiguous meaning of the Policy and its earth movement exclusion warrant that result. In particular, the Poliсy’s earth movement exclusion excepts from coverage “loss to any property resulting directly or indirectly” from “earth movement due to natural or
unnatural
causes,” (emphasis added), with earth movement including “earth shifting, rising, or sinking.” The loss to Liebel’s home was caused by the shifting of earth under the home that was, in turn, caused by earth shifting from unnatural causes, i.e., the water line rupturing. The loss was, therefore, specifically excluded from the Policy’s coverage by the earth movement exclusion, even though it was caused by an unnatural force, as the exclu
Liebel’s next contention is that the cost of repairing the water line is covered by the Policy’s provision that says: “We alsо cover the cost of tearing out and replacing any part of a building necessary to repair the system or appliance.” If the cost of repair does not fall within this provision’s plain meaning, Liebel contends that an ambiguity in the Policy exists regarding her loss because after the Policy’s statement that it does not cover а loss that is “otherwise excluded,” it goes on to give the previously stated cost of repair provision. Liebel argues that this creates an ambiguity because the statement that immediately precedes the cost of repair provision possibly excepts her loss from coverage, while the cost of repair provisiоn may include coverage for the “cost of tearing out and replacing any part of a building necessary to repair [a] system or appliance,” without specifically excluding a plumbing system. Liebel further contends that an ambiguity exists by pointing to the Policy’s subsequent paragraph, which states that “[u]n-der exclusions 3.a) through 3.f), any loss that fоllows is covered unless it is specifically excluded,” (emphasis added), and to the fact that the cost of repair provision does not specifically exclude repair costs caused by damage from earth movement.
In support of her argument, Liebel cites
Hartford Accident & Indemnity Co. v. Phelps,
From the previously quoted wording of the policy, we consider that the underground water exclusion does not have reference to leaks within the plumbing system of the house. Having specifically covered plumbing system leaks, the insurer, if it had intended to exclude underground leaks in the plumbing system, would or should have specifically said so....
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When we consider the terminology used in the exclusion clause in pari materia with the affirmative statement of coverage from leaks in the plumbing system, we conclude that the exclusion was intended to relate only to damage from water not emanating from the plumbing system.
Id.
In the instant case, the trial court erred by not holding that the Policy covered the cost of repairing the plumbing system. This is because the Policy, by providing that it does not cover damage caused by water from a plumbing system that is otherwise excluded, but then stating that it covers the cost of repairing a system that caused water damage, has created an ambiguity, as two or more reasonable interpretations of these two intersecting provisions are feasible. Specifically, one may interpret the “otherwise excluded” language to preclude coverage for all damages caused by a matter otherwise excluded, including the cost of tearing out and replacing any part of Liebel’s home necessary to repair the ruptured water line. In contrast, a reasonable person could interpret the Policy to exclude from coverage the damage caused by earth movemеnt, but include the cost of repairing the water line that caused the loss, as it is a plumbing system that caused water damage due to its deterioration from wear and tear. As such, there is an ambiguity. In following the principle that ambiguities in insurance contracts favor the insured and are strictly construed against the insurer, we hold that the cost of reрairing the water line was covered by the Policy and reverse the trial court’s order to the extent that it held to the contrary. Such an interpretation is also in accord with the principle that an all-risk policy will cover a loss falling within its coverage unless that loss is specifically excluded, as the Policy did not specifically еxclude the cost of repairing a plumbing system from its coverage. Rather, it only specifically excluded damage caused by earth movement.
We, therefore, reverse and remand with directions to enter judgment in favor of Liebel for the cost of tearing out and replacing any part of the house necessary to repair the water line.
Reversed, and Remanded with Directions.