The appellate court reversed the trial court's determination that the policy covered only mold damage, but not damage caused by water seepage. Henderson v. Georgia Farm Bureau Mut. Ins. Co., 2014 Ga. App. LEXIS 539 (Ga. Ct. App. July 16, 2014).
The homeowner's policy covered losses caused by constant seepage or leakage of water or the presence of condensation or moisture over a period of time. The insureds also paid for additional coverage for "ensuing mold . . . caused by or resulting from" one of the covered risks, including water seepage.
Ms. Henderson discovered a puddle of water in her kitchen and contacted Georgia Farm Bureau. The insurer's contractor tore out a section of the floor, but found no other problems of water seepage. Later, the Hendersons removed another part of the floor and discovered standing water and black mold underneath. The Hendersons had to vacate their house for one year.
Subsequently, more damage to the home was found as repairs commenced. Areas of the flooring and subflooring were rotted through. In the crawlspace under the house, water flowed and collected in puddles.
Georgia Farm Bureau paid policy limits of $32,675 for the mold damage, but denied the claim for other non-mold damage taht resulted from the seepage of water. A jury found for the Hendersons, but the trial judge granted Georgia Farm Bureau's motion for judgment notwithstanding the verdict. The trial judge reasoned that the resulting damage was not water damage, but mold damage. There was no evidence of any non-mold damage that could support an award of damages beyond the mold endorsement limit. The Hendersons had failed to show any damages that were caused solely by water or moisture that were separate and distinct from the mold damage.
The court of appeals reversed. The trial court had implicitly construed the policy to mean that mold damage was not an item of damage that resulted as a consequence of water seepage. Yet, the policy expressly required that mold damage ensue as a consequence of a covered risk such as seepage of water. The evidence showed that all of the Hendersons' property damage was from the seepage of water, and that, of that damage, some of it was from ensuing mold. For the damage resulting from the seepage of water that was not solely mold damage, the policy limit of $153,500 applied.
Therefore, the trial court erred in granting Georgia Farm Bureau's motion for judgment notwithstanding the verdict as to the jury's award for property damage.
