The insureds' motion for partial summary judgment on the applicability of the homeowner's mold limitation was denied. R.W.& R. v. Liberty Mutual Fire Ins. Co., 2016 U.S.Dist. LEXIS 131586 (W.D. Wash. Sept. 26, 2016).
The policy imposed a $5,000 limit on losses caused by mold. Plaintiffs discovered that their dishwasher was leaking and reported the loss to Liberty. Liberty's contractor concluded that the bottom of the dishwasher had rusted out, causing water to seep into parts of the kitchen and the laundry/utility room below. The contractor used dehumidifiers to extract moisture from the affected areas and removed damaged cabinetry, drywall and tiling. The contractor discovered mold that it believed predated the dishwasher leak. Although the contractor took steps to remove the mold, its dehumidification efforts exacerbated the problem by dispersing mold spores throughout portions of the house.
Liberty covered certain losses caused by the dishwasher leak, but asserted that the portion of the losses attributable to mold was contractually limited to $5,000. Liberty hired Rimkus Consulting Group, Inc. to investigate the mold damage. Rimkus identified ten moisture sources, only one of which was the dishwasher leak. Rimkus also found numerous locations throughout plaintiffs' home where mold was present.The dishwasher leak was not entirely to blame. In the bedroom, a considerable portion of the mold was attributable to moisture from the exterior of the home. The same was true for the laundry/utility room. Rimkus confirmed that the contractor's remediation work had worsened the issue, but it was not solely at fault. The home was plagued by numerous sources of ongoing moisture intrusion.
Another contractor hired by Liberty estimated the cost of remediating the mold problem. It was estimated that it would cost $4,252.79 to remove the mold growing in the kitchen and laundry/utility room and $1,291.35 for the mold in the bedroom. Remediating the mold throughout the remainder of the house would cost nearly $40,000.00. Liberty advised plaintiffs that the mold damage to the kitchen and laundry/utility room was covered, but the damage was subject to a limit of $5,000. Liberty paid this amount.
Plaintiffs sued and moved for partial summary judgment, contending there was no genuine issue of material fact concerning Liberty's liability for breach of contract.
The motion was denied. Plaintiffs' breach of contract claim could not be resolved on summary judgment because there was a disputed issue of whether the dishwasher leak was the efficient proximate cause of more that $5,000 in mold damage. Plaintiffs were correct that Liberty could not use the $5,000 policy limit on mold damage to circumvent the efficient proximate cause rule, under which Liberty had to cover any losses that were predominantly caused by the dishwasher leak.
The dishwasher leak was only partially to blame for the mold problem in the laundry/utility room and bedroom. This mold was also attributable to the exterior moisture that had seeped through the walls. The estimate for repairing the kitchen and laundry/utility room was $4,252.79. At this stage, it was impossible to apportion which of those losses were predominantly caused by the dishwasher leak as opposed to the intrusion of exterior moisture. This was for the factfinder. The same applied to the bedroom, where the estimate was $1,291.35 to remediate the bedroom, but there was evidence that the mold damage caused by the dishwasher leak was limited to the closet.
Because there were genuinely disputed issues of material fact whether the dishwasher leak was the efficient proximate cause of more than $5,000 in losses, plaintiff's motion for summary judgment on the breach of contract claim was denied.
