Seepage of Water “Over a Period of Time” Exclusion is not Ambiguous


Seepage of Water “Over a Period of Time” Exclusion is not Ambiguous


A provision in a homeowner’s policy excluding coverage for “continuous or repeated seepage or leakage of water … which occurs over a period of time” is not ambiguous, according to a recent decision by a Louisiana appellate court. The state Fifth Circuit Court of Appeal interpreted this policy language in a May 26, 2016 decision, observing that no prior Louisiana decision had previously construed this provision.

The plaintiffs discovered mildew in their kitchen in March 2013. They promptly reported the problem to their insurance agent, and then had a contractor evaluate the damage. The contractor determined that a leak in a copper elbow behind the refrigerator caused the mildew and other damage. The contractor gave the plaintiffs an estimate for repairs totaling more than $21,000. By the time the insurer’s adjuster inspected the home, the contractor had gutted much of the kitchen and replaced the copper elbow. Based on his inspection, however, the adjuster concluded that the leak existed for a continuous, but unspecified, period of time.

The plaintiffs’ homeowner’s policy provided coverage for “accidental direct physical loss to the property.” However, it excluded losses arising from a “continuous or repeated seepage or leakage of water or steam from a … household appliance; or (3) plumbing system … which occurs over a period of time.”

The plaintiffs argued that this provision was ambiguous because it did not define or provide guidelines as to the meaning of a continuous or repeated seepage or leakage of water which occurs over a period of time. The court rejected this argument, accepting the reasoning of the only case either party found which interpreted this exact provision. The case, from a court outside of Louisiana, noted that the definitions of “period” and “time” were easily understood. As a result, “[a]pplying the ordinary, plain, and usual meaning of the terms at issue, we find that the limitation on coverage utilized by [the insurer] creates no ambiguity under the circumstances in this case with respect to the coverage or lack of coverage contemplated by the homeowner’s policy.” Although conflicting evidence existed in the subject case, the court of appeal accepted the trial court’s determination that the leak had been continuous over a period of time, and denied coverage for the plaintiffs’ damages.

Power v. State Farm Fire and Casualty Co., No. 15-CA-796 (La. App. 5 Cir. 5/26/16)

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