The Eleventh Circuit, following Florida law, reversed the district court's granting of summary judgment to the insurer for water damage caused by a collapse in the dwelling's plumbing system. Cameron v. Scottsdale Ins. Co., 2018 U.S. App. LEXIS 9800 (11th Cir. April 16, 2018).
A pipe in the plumbing system of the insureds' dwelling collapsed, causing water damage to the interior and necessitating additional damage to access and repair the plumbing. The cause of the plumbing problem was the age of the plumbing system that carried wastewater out of the building.
Scottsdale denied coverage. The policy covered some but not all water damage. The policy covered the "[a]ccidental discharge or leakage of water . . . as the direct result of the breaking apart or cracking of a plumbing system that is located on the described premises. But the policy's Water Exclusion Endorsement barred coverage for damages caused by "[w]ater that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment."
The district court reasoned that there was a backup and overflow from a drain. Therefore, the Water Exclusion applied and the provision granting coverage did not limit the applicable language of the Water Exclusion. Summary judgment was granted to Scottsdale.
On appeal, the Eleventh Circuit vacated and remanded. The insureds' loss fell within the definition of "water damage" unless it was otherwise excluded under the Water Exclusion. The court looked to a decision from the Florida Court of Appeals, Cheetham v. Southern Oak Ins. Co., 114 So. 3d 257 (Fla. Dist. Ct. App. 2013), which analyzed nearly identical policy language. There, a pipe broke due to age and deterioration, resulting in a blockage which caused wastewater to back up through the blocked pipe and into the premises through the drains. The Cheetham court determined that the water-damage exclusion applied only "to damage caused by water originating from somewhere other than the residence premises' plumbing system." Because the claimed loss was caused by the deterioration of a pipe within the plumbing system, causing water to back up in to the premises, the court concluded the loss was covered.
Just as in Cheetham, here the court found that the Water Exclusion related to water damage caused in part by outside forces, such as weather-induced flooding, but not to damage caused by a failure of the premises's plumbing system due to age or deterioration. Consequently, the district court erred in granting summary judgment to Scottsdale on the basis of the Water Exclusion.
