Tred R. Eyerly | Insurance Law Hawaii
Given the opposing experts’ contradictory reports, the court denied both the insured and insurer’s motions for summary judgment regarding coverage for a pipe leak. Pronti v. Hanover Ins. Co., 2022 U.S. Dist. LEXIS 222306 (W.D. N. Y. Dec. 9, 2022).
The insured had a swimming poll and spa, which functioned using a subsurface plumbing system, covered with concrete decking. A subsurface pipe began to leak, preventing the pool from properly functioning. The insureds gave notice under their homeowners’ policy and contended that significant portions of the pool, spa, concrete decking and other landscaping had to be torn out to do repairs. The insurer retained an expert, Sarah G. Byer, a structural engineer, to investigate. The parties agreed that the pipe had a leak, but disputed if the location of the leak was specifically identified.
The parties also disputed the cause of the leak. Byer found that the most likely cause was deterioration incurred over the pipe’s lifetime based on the age of the plumbing system and Byer’s personal observation of the pipe. Byer further stated that the physical qualities of flexible PVC piping made it susceptible to damage from chlorine and water over time.
The insureds retained Patrick Williams as their expert. He concluded that wear and tear was not the cause of the pipe leak. Williams based his conclusion on the purported typical lifespan of flexible PVC piping, his observation of the lack of discolouration or brittleness typical of deteriorated piping, and the lack of leaking water from other sections of the pipe system. Williams did not ultimately identify a specific cause of the pipe leak.
The insurer denied coverage based upon exclusions for wear and tear and water damage. Suit was filed and cross motions for summary judgment were presented.
The court found that both expert reports were admissible. Considering both expert reports in the light most favorable to the respective nonmoving parties, the court found that there was a genius dispute of material fact regarding the cause of the alleged damage. The expert reports came to opposing conclusions on what caused the pipe to leak. Therefore, the reports created a genuine dispute of fact precluding summary judgment.
There was also a genie dispute as to whether the policy covered the tear-out costs the insureds incurred when preparing their plumbing system. The policy stated that all “ensuing loss to property . . . not excluded or excepted in this policy is covered.” The insures agreed that the resulting tear-out costs directly resulted from non-excluded losses, and therefore constituted an ensuing loss to “other structures” under the policy. The insurer argued that these damages were merely indirectly caused by the pipe leak, and all related to excluded loss under the policy.
There was a genuine dispute of material fact as to whether any exclusion applied, since there was conflicting evidence on what caused the pipe lea. Therefore, because the court could not determine whether any exclusions applied on summary judgment motions it could not determine whether the tear-out costs were covered under the ensuing loss provision.
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