Hartman v. Erie Ins. Co. , 2017 Ohio 668 ( 2017 )

[Cite as Hartman v. Erie Ins. Co., 2017-Ohio-668.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
WOOD COUNTY
Chad Hartman, et al. Court of Appeals No. WD-16-022
Appellants Trial Court No. 2015CV0434
v.
Erie Insurance Company DECISION AND JUDGMENT
Appellee Decided: February 24, 2017
*****
Stephen B. Mosier, for appellants.
Gordon D. Arnold and Carl A. Anthony, for appellee.
*****
SINGER, J.
{¶ 1} Appellants, Chad and Erin Hartman, appeal from the April 18, 2016
judgment of the Wood County Court of Common Pleas granting summary judgment to
appellee, Erie Insurance Company, and dismissing the claims of appellants. For the
reasons which follow, we affirm.
{¶ 2} On appeal, appellants assert the following assignments of error:
ASSIGNMENT OF ERROR NO. 1
THE TRIAL COURT ERRED WHEN IT STRUCK ALL OF
PLAINTIFFS’ EVIDENCE ON THE STATED GROUND THAT
PLAINTIFFS FAILED TO PRESENT IT IN THE FORM OF AN
AFFIDAVIT, WHEN PLAINTIFFS’ EVIDENCE WAS IN FACT
SUPPORTED BY AFFIDAVIT SWORN TO UNDER OATH BEFORE A
PROPER OFFICER, FULLY COMPLIANT WITH RULE 56 (E).
ASSIGNMENT OF ERROR NO. 2
THE TRIAL COURT MISCONSTRUED THE HOMEOWNERS’
INSURANCE POLICY, AND ERRED IN GRANTING SUMMARY
JUDGMENT AGAINST RATHER THAN IN FAVOR OF THE
POLICYHOLDERS ON THE “ADDITIONAL ENDORSEMENT”
COVERAGE FOR “LOSS CAUSED BY WATER WHICH BACKS UP
THROUGH SEWERS OR DRAINS.”
ASSIGNMENT OF ERROR NO. 3
THE TRIAL COURT MISCONSTRUED THE HOMEOWNERS’
INSURANCE POLICY, AND ERRED IN GRANTING SUMMARY
JUDGMENT AGAINST RATHER THAN IN FAVOR OF THE
POLICYHOLDERS ON THE COVERAGE PERTINENT TO “FUNGI,
WET OR DRY ROT OR BACTERIA.”
2.
ASSIGNMENT OF ERROR NO. 4
THE TRIAL COURT ERRED IN OVERRULING PLAINTIFFS’
TIMELY EVIDENTIARY OBJECTIONS TO “EXPERT” TESTIMONY
PROFFERED BY ERIE, WITHOUT PROPER FOUNDATION AND
CONTRARY TO EVIDENCE RULE 702 AND 703, AND ERRED
FURTHER IN RELYING ON THAT CONTROVERTED TESTIMONY
AS ITS BASIS FOR GRANTING SUMMARY JUDGMENT AGAINST
THE POLICYHOLDERS.
{¶ 3} Appellants brought suit against appellee alleging breach of contract and a
breach of appellee’s duty of good faith and fair dealing. Appellants allege that on
May 29, 2015, their home and personal property was damaged by water backing up from
the storm drain system (hereinafter the “first claim”). Appellants reported the first claim
to appellee, who accepted the loss as being within the coverage of the policy. Appellee
reimbursed appellants $11,500 for their loss, $10,000 for the damage caused by the sump
pump back up and $1,500 as an additional payment for debris removal by a restoration
company. Appellants asserted this was only a partial payment of the loss, which appellee
ceased to continue to pay after a second claim was made.
{¶ 4} Appellants allege that on June 27, 2015, their home and personal property
was again damaged by the backup of water from the storm drain system (hereinafter the
“second claim”). Appellee denied the second claim on the ground that the anti-
concurrent causation clause precluded recovery. Appellants asserted that appellee had
3.
represented to appellants that the separately-purchased endorsement was not subject to
any other policy exclusions.
{¶ 5} Appellants argued they are also entitled under the policy provisions for
“Additional Payments” to reimbursement for the cost of testing the property for fungi or
bacteria and remediating the damage from fungi or bacteria. They assert they were never
informed of this coverage by appellee.
{¶ 6} Appellants moved for partial summary judgment. The parties agreed that
the only issue before the court on summary judgment was whether there was coverage
under the policy for both loss claims. Appellants asserted that while the basic policy
provides an exclusion for “water damage” (hereinafter the “water damage exclusion”),
appellants purchased, for an additional premium, an endorsement for coverage of “Loss
Caused By Backup Of Sewers Or Drains” (hereinafter the “backup coverage
endorsement”), which did not separately restate the water damage exclusions listed in the
main policy.
{¶ 7} Appellee also moved for summary judgment on all of the claims asserting
that it paid the first claim in full and coverage for the second claim was excluded under
the policy arguing the two loss claims were not identical. The first claim was based on
water entering the basement of the home through the sump pump system. The second
claim was based upon water entering the basement of the home through the sump pump
system and through the basement windows.
4.
{¶ 8} Appellee attached to its motion the affidavits of Alexander Davis, appellee’s
insurance agent who handled the first claim; John Fetters, appellee’s insurance agent
assigned to handle the second claim; and Stephen Bostwick, a registered architect, who
specialized in forensic evaluations of homes regarding water damage and the existence of
mold.
{¶ 9} Davis attested that he initially advised Mrs. Hartman that there was a
coverage deductible and the limit for the claim was $10,000, plus an additional
percentage of the limit was available for debris removal. Davis inspected the home and
took photographs. He completed an estimate of the repairs and completed the claim
when he received the invoice from the restoration company hired by the Hartmans.
Davis further attested the total payout on the claim was $11,500 and appellee did not stop
making payments on the first claim.
{¶ 10} In a second affidavit, Davis attested that during the course of handling the
first claim, he “was never made aware of any fungi or mold, or anything that would have
triggered coverage under the ‘Fungi, Wet or Dry Rot Or Bacteria’ provision in the
insurance contract. * * * Neither of the Hartmans, nor anyone else, told me there was a
problem with, or existence of, anything that would have triggered his coverage.” Davis
understood from Mr. Hartman that one of the functions of the restoration company was to
prevent problems with mold and there was nothing in the invoice suggesting fungi or
bacteria were found on the premises. Upon his inspection of the house after the
restoration work, Davis did not see any evidence of mold or observe anything that would
5.
lead him to believe the fungi/bacteria coverage would have been triggered and the
Hartmans did not inquire about such coverage.
{¶ 11} Furthermore, Davis attested he did not learn of the Hartmans’ claim of
hydrostatic pressure damage occurring during the first claim incident until November
2015 in connection with this litigation. Davis never observed such damage when he
inspected the property.
{¶ 12} Fetters attested he exchanged e-mail messages with Mr. Hartman regarding
the second claim. Fetters authenticated a copy of an email Mr. Hartman sent to Fetters,
in which Mr. Hartman stated:
the area experienced a very substantial amount of rainfall within a 12-15
hour period. I once again had water entering into and accumulating several
inches deep in my basement * * * this time from groundwater entering the
basement through the basement windows and presumably also by back-up
from the storm drain system and up through the basement sump pump. The
storm drain system was overwhelmed, and overflowed forming a large pool
and accumulating around the foundation of my home. The foundation and
basement floor buckled and cracked * * *. Due to the second incident,
several inches of * * * insulation and drywall have become saturated and
will necessarily be required to be removed to prevent mold from forming.
Fetters also attested Mr. Hartman called and provided more details about the loss, telling
Fetters the water trickled through the windows, but mostly came through the sump crock.
6.
Fetters attested that he informed Mr. Hartman coverage would probably be excluded if
water came through the windows.
{¶ 13} Fetters inspected the property and authenticated copies of photographs
taken that day. Fetters attested there was a slope leading toward the house and mud could
be seen on the windows, which was consistent with Mr. Hartman’s initial e-mail
statement that ground water entered the basement through the basement windows. Upon
examination of all of the evidence, Fetters concluded that the loss was caused in part by
surface water coming in through the windows of the basement, which was an excluded
loss. He informed appellants the second claim was not a covered loss.
{¶ 14} In a separate affidavit, Fetters attested that during the time he handled the
second claim, the Hartmans never said they believed mold was present or that fungi and
bacteria entered the house from the water that entered the home through the windows and
sump pump.
{¶ 15} Bostwick attested he was hired by appellee to inspect appellants’ property
in January 2015. Based on a review of the litigation documents, appellee’s records, an
examination of the property, and his education, training, and experience in the field, he
opined, to a reasonable degree of architectural and scientific probability, as follows:
During both claim incidences, water pooled above the culvert at the street and was not
drained away from the house. “Some or all of the water which entered the house * * *
included water stopped by the road and culvert from draining away from the house. * * *
Some or all of the water which entered the house * * * included water which fell to the
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ground directly from rainfall. None of the water which entered the house * * * backed up
through the culvert.”
{¶ 16} Bostwick further attested that during his inspection of the premises, Mr.
Hartman told Bostwick that all of the water in the first claim incident entered the home
through the sump pump. Mr. Hartman used a second sump pump to keep the basement
from flooding, but could not prevent six inches of standing water from filling the
basement. He stated no water entered the basement through the windows. Bostwick
found these statements consistent with the claim file.
{¶ 17} Furthermore, Mr. Hartman told Bostwick that surface water pooled at the
windows and infiltrated the house at the windows during the second claim incident.
Bostwick observed damage around and under the windows. He opined the groundwater
came into the house through or near the two windows as well as through the sump pump.
{¶ 18} Bostwick also opined that water from a recent rain, entering a house
through a sump pump system, does not typically contain damaging fungi or bacteria
levels in concentrations sufficient to cause damage to property or require cleaning
procedures other than removal of the water and wiping down the surfaces because it is
ground water and not sewage backup. Therefore, appellants’ home should not have been
damaged by fungi or bacteria in the water after the first claim incident. He also opined
there was no property damage caused by wet rot or dry rot because this was not a sewage
backup but ground water from a substantial rain.
8.
{¶ 19} During Bostwick’s inspection, Mr. Hartman explained the work performed
by the restoration company and Bostwick reviewed the company’s invoice and
photographs. All of the evidence indicated to Bostwick that the company did not remove
any drywall after the first claim incident, but did remove the baseboards and drilled holes
in the drywall at the baseboard level, and used dehumidifiers and other solutions to
prevent mold. The restoration company’s invoice did not indicate that the company
found evidence of mold, but only states the company applied antimicrobial agents and
took steps to prevent mold growth. Typically, Bostwick attested, companies doing such
work will indicate on their invoice if they remediated actual mold.
{¶ 20} During Bostwick’s inspection, the Hartmans pointed out several areas
where they suspected mold was present. Mr. Hartman claimed to have scrubbed the
walls with bleach but the mold returned after the second flooding incident. Bostwick
attested he examined the areas identified by the Hartmans by scratching and smelling the
substance. Based on his experience, Bostwick opined no mold was present because it did
not smell like mold. He also used a moisture meter on several areas and all readings were
in normal ranges, which would not have been conducive to mold growth. He did not
chemically test the areas, but based on his experience, he would have expected to find
higher moisture levels to support mold growth. He also did not have any photographic
evidence of the presence of mold. However, he attested he could not rule out mold was
possibly present.
9.
{¶ 21} Bostwick inquired about damage from hydrostatic pressure on the
foundation during the first claim incident. Mr. Hartman denied seeing any such damage
after the first claim incident and before the second claim incident. Bostwick could not
find any evidence of hydrostatic damage in the photographs Davis had taken or in the
claim file.
{¶ 22} Mr. Hartman identified damage he observed after the second claim incident
which he believed was caused by hydrostatic pressure. Based on this information and
Bostwick’s own inspection, he agreed with Mr. Hartman that the home was damaged
during the second flooding incident by hydrostatic/water pressure from below the
floor/slab and foundation.
{¶ 23} On April 18, 2016, the trial court denied partial judgment to appellants and
granted summary judgment to appellee and dismissed the claims of appellants despite the
fact that the parties filed a joint notice on January 12, 2016, indicating that they agree that
the only issue to be determined on summary judgment was the issue of coverage.
{¶ 24} The appellate court reviews the grant of summary judgment under a de
novo standard of review. Doe v. Shaffer, 90 Ohio St.3d 388, 390, 738 N.E.2d 1243(2000), citing Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241(1996). Applying the requirements of Civ.R. 56(C), we uphold summary judgment when
it is clear
(1) that there is no genuine issue as to any material fact; (2) that the moving
party is entitled to judgment as a matter of law; and (3) that reasonable
10.
minds can come to but one conclusion, and that conclusion is adverse to the
party against whom the motion for summary judgment is made, who is
entitled to have the evidence construed most strongly in his favor. Harless
v. Willis Day Warehousing Co., Inc., 54 Ohio St.2d 64, 66, 375 N.E.2d 46(1978).
First Assignment of Error
{¶ 25} On appeal, appellants argue in their first assignment of error the trial court
erred in striking the three declarations of Mr. Hartman on the ground the declarations did
not meet the qualifications of affidavits required by Civ.R. 56(E).
{¶ 26} Appellants supported their motion with three separate “declarations” of
Chad Hartman. After appellee moved to strike the declarations, appellants submitted a
notarized affidavit of Chad Hartman, in which he confirmed each of the statements he
made in the declarations. On April 18, 2016, the trial court granted appellee’s motion to
strike the three declarations because the documents did not meet the requirements for
affidavits permitted by Civ.R. 56(E).
{¶ 27} We agree with the trial court that the declarations filed in compliance with
28 U.S.C. 1746 are insufficient to establish factual evidence permitted by Civ.R. 56(E).
This federal statute governs federal cases and, therefore, is not applicable in a state court
proceeding in Ohio. Disciplinary Counsel v. Squire, 130 Ohio St.3d 368, 2011-Ohio-
5578, 958 N.E.2d 914, ¶ 45, fn. 3c; Toledo Bar Assn. v. Neller, 102 Ohio St.3d 1234,
2004-Ohio-2895, 809 N.E.2d 1152, ¶ 21.
11.
{¶ 28} Appellants further argue that the trial court did not address the notarized
affidavit of Mr. Hartman, in which he affirmed all of his statements made in the prior
declarations. Appellants filed a proper Civ.R. 56(E) affidavit on February 16, 2016, after
the February 5, 2016 deadline for submitting evidence to the court had passed and
without leave of court. The affidavit was clearly filed in response to appellee’s
February 19, 2016 motion to strike Hartman’s declarations. The trial court did not
discuss the admissibility of the later affidavit.
{¶ 29} A trial court has “a mandatory duty * * * to thoroughly examine all
appropriate materials filed by the parties before ruling on a motion for summary
judgment.” Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 358, 604 N.E.2d 138 (1992),
syllabus. However, the trial court has no duty to consider an untimely-filed affidavit, but
may do so at its discretion. Widlar v. Young, 6th Dist. Lucas No. L-05-1184, 2006-Ohio-
868, ¶ 37. We find the failure to consider or to mention the affidavit in this case was not
an abuse of discretion. Appellants could have, but did not, petition the court to consider
their untimely-filed affidavit as they did for their brief in opposition to the motion for
summary judgment, to which Mr. Hartman’s third declaration was attached.
{¶ 30} Appellants also argue appellee waived the right to challenge that the
affidavit was untimely filed. We disagree. The issue on appeal is only whether the trial
court abused its discretion in failing to consider the affidavit, not whether appellee
objected to its admission.
{¶ 31} Therefore, we find appellants’ first assignment of error not well-taken.
12.
Second Assignment of Error
{¶ 32} In their second assignment of error, appellants argue the trial court
misconstrued the backup coverage endorsement and limited its application to override
only the exclusion for water from sewer or drain backups (exclusion paragraph 9.b.) and
not all of the water damage exclusions.
Policy Provisions
{¶ 33} Under “Property Protection, Section I,” the insurance policy separately sets
forth the coverage type (“dwelling and other structures” and “personal property”) and the
exclusions from coverage. Under each coverage type, the exclusion sections include
identical anti-concurrent causation clauses:
“We” do not pay for loss resulting directly or indirectly from any of
the following, even if other events or happenings contributed concurrently,
or in sequence, to the loss.
{¶ 34} This clause was followed by identical water damage exclusions. These
four water damage exclusions exclude coverage for losses caused:
9. by water damage, meaning:
a. flood, surface water, * * * storm surge or overflow of a body
of water.
b. water or sewage which backs up through sewers or drains or
water which enters into and overflows from within a sump
pump, sump pump well or any other system designed to
13.
remove subsurface water which is drained from the
foundation area.
This exclusion does not apply if Sewers or Drains Backup
Coverage is shown on the ‘Declarations.’ However, the
maximum amount shown on the ‘Declarations’ is the
maximum amount ‘we’ will pay for any one direct loss
caused by water or sewage which backs up through sewers or
drains, or which enters into and overflows from within a
sump pump, sump pump well or any other system designed to
remove subsurface water which is drained from foundation
area;
c. water below the surface of the ground. This includes water
which exerts pressure on, or flows, seeps or leaks through any
part of a building or other structure, including sidewalks,
driveways, foundations, pavements, patios, swimming pools
or decks; or
d. waterborne material carried or otherwise moved by any of the
water referred to in his exclusion.
This exclusion applies, but is not limited to, escape, overflow or discharge,
for any reason, of water or waterborne material from a dam, levee, seawall
or any other boundary or containment system. (Emphasis added.)
14.
It is undisputed that appellants purchased the “backup coverage endorsement” referenced
in paragraph 9.b. The backup coverage endorsement in this case provides as follows:
“ERIESECURE HOME SELECT ENDORSEMENT – INCLUDING
COVERAGE FOR LOSS CAUSED BY BACKUP THROUGH SEWERS
OR DRAINS – OHIO”
***
“ADDITIONAL COVERAGES”
***
COVERAGE FOR LOSS CAUSED BY WATER BACK UP
THROUGH SEWERS OR DRAINS
“You” have purchased Sewers or Drains Backup Coverage in the
amount shown on the “declarations.” The SECTION 1 policy deductible
applies.
Trial Court’s Judgment
{¶ 35} The trial court found appellee paid the first claim in full pursuant to the
backup coverage endorsement. The trial court found there was undisputed evidence the
second claim incident was caused by both surface water entering the home through the
basement windows and by a backup of the sewer and drain. The trial court further found
the policy excluded coverage for the second claim because of the anti-concurrent
causation clause, which was not modified by the backup coverage endorsement.
15.
Furthermore, the court found that the hydrostatic pressure damage is also excluded from
the policy pursuant to exclusion paragraph 9.c.
Arguments
Did the Backup Coverage Endorsement Override the Main Policy?
{¶ 36} Appellants first argue the backup coverage endorsement is not restricted to
solely water damage caused by sewer and drain backups (exclusion 9.b.) because such a
reading of the contract would render the backup coverage endorsement useless even
though they paid an additional premium for backup coverage. They argue the backup
coverage endorsement “‘controls the policy insofar as it “enlarges, modifies, or restricts
the terms” of the policy,’” and “‘if there is any conflict between the rider and policy, “the
rider controls in construing the contract especially where the provisions of the rider are
more specific”’” citing Penthouse Owners Associations, Inc. v. Certain Underwriters at
Lloyds, London, 612 F.3d 383, 386 (5th Cir.2010). Therefore, appellants argue the
backup coverage endorsement must be interpreted more broadly to cover the loss in this
case.
{¶ 37} We disagree. It is a basic contract principal that insurance policies and
endorsements must be read together as one contract. Ward v. United Foundries, Inc., 129
Ohio St.3d 292, 2011-Ohio-3176, 951 N.E.2d 770, ¶ 18. “[A]n exclusion in an insurance
policy will be interpreted as applying only to that which is clearly intended to be
excluded.” Hybud Equip. Corp. v. Sphere Drake Ins. Co., 64 Ohio St.3d 657, 665, 597
N.E.2d 1096 (1992). Accord Westfield Ins. Co. v. Hunter, 128 Ohio St.3d 540,
16.
2011-Ohio-1818, 948 N.E.2d 931, ¶ 11; Sharonville v. Am. Emps. Ins. Co., 109 Ohio
St.3d 186, 2006-Ohio-2180, 846 N.E.2d 833, ¶ 6. An unambiguous insurance policy
contract, which would include the exclusion and limitation provisions, must be enforced
as written. Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 73 Ohio St.3d 107, 108,
652 N.E.2d 684 (1995). The court should attempt to construe the language “in
conformity with the intention of the parties as gathered from the ordinary and commonly
understood meaning of the language employed.” Dealers Dairy Prods. Co. v. Royal Ins.
Co., 170 Ohio St. 336, 164 N.E.2d 745 (1960), paragraph one of the syllabus.
{¶ 38} We agree with the trial court that the language of the insurance policy was
unambiguous and that its application of the language was correct. The optional backup
coverage endorsement was permitted by paragraph 9.b. and allows for coverage of loss
caused by water backing up from sewers and drains, which would otherwise have been
specifically excluded from coverage under exclusion 9.b. There is no other language
which ties the backup coverage endorsement to the other water damage exclusions set
forth in paragraphs 9.a., 9.c., or 9.d.
{¶ 39} Appellants relied on the case of Myers v. Encompass Indemn. Co., 169
Ohio App.3d 545, 2006-Ohio-6076, 863 N.E.3d 1083 (12th Dist.). We agree with the
trial court that this case is distinguishable on its facts. In Myers, an “all-risk” insurance
contract provided that all losses were covered unless specifically excluded and the policy
specifically excluded losses from “flood, surface water,” subsurface water, or losses
caused by the “faulty design, construction, or maintenance” of a drainage system. Id. at
17.
¶ 19. Myers purchased additional coverage to cover losses from water backed up through
a drain or sewer. Id. at ¶ 10. While the policy also contained an anti-concurrent
causation clause, id. at ¶ 19, it was not applicable because the damages were caused by
only one event. Id. at ¶ 26.
{¶ 40} Myers’ property was damaged when a blocked storm drain caused storm
water to be forced in the opposite direction and flow into Myer’s basement. The court
determined that Myer’s loss was due to “surface water,” water that backed up because of
a defective drain, and would have been excluded under the main provisions of the policy.
Id. However, the court found that the contract language in the amendment for additional
coverage “deleted policy language that would preclude coverage where another
exclusion, such as surface water, already existed in the policy.” Id. at ¶ 29. Therefore,
the holding in Myers was based on the changes the amendment made to the policy
language. In the case before us, the backup coverage endorsement only modified the
language of exclusion 9.b. to add coverage that would otherwise have been excluded.
{¶ 41} Appellants also rely upon Butche v. Ohio Cas. Ins. Co., 174 Ohio St. 144,
187 N.E.2d 20 (1962). This case is distinguishable on its facts as well. In Butche, the
Ohio Supreme Court held that damage to an airplane caused by the wind while the
airplane was taxiing was a covered loss even though the policy insured against losses to
aircraft caused by wind but did not cover losses caused by taxiing an airplane. Id. at 146.
The court found the policy did not contain an express exclusion for loss caused by wind
while taxiing, an anti-concurrent clause, and therefore the policy coverage for wind
18.
damage applied. Id. We agree with appellee that the presence of the anti-concurrent
causation clause in the policy before us distinguishes this case from Butche.
{¶ 42} We also agree with appellee that the case before us is similar to that of
Front Row Theatre, Inc. v. Am. Mfrs. Mut. Ins. Cos., 18 F.3d 1343 (6th Cir.1994). In the
Theatre case, the Sixth Circuit Court of Appeals considered whether surface water,
blocked from flowing through a drainage system, would be a covered loss when it flows
in the opposite direction downhill into a building. Id. at 1345. The insurer denied a
claim for loss on the basis the damage was caused by a flood. The Sixth Circuit defined
“surface water” as water which flows naturally across the land, but found the damage
caused by the backed up water flowing in the opposite direction intended by the drainage
system, would have been covered under the policy. Id. at 1347. However, because
rainwater from the storm contributed to the damage, the anti-concurrent causation clause
in the policy barred coverage. Id. at 1348.
{¶ 43} In the case before us, during the second claim incident there was evidence
that water entered the home through both the windows and, as a result of a backup of the
sump pump system, further damage was caused by hydrostatic pressure from subsurface
water. Mr. Hartman made statements to this effect in his e-mail and orally to the Fetters
and Bostwick. Furthermore, Bostwick opined the water which entered the home during
the second incident through the window was not water that backed up through the
culvert, but was pooled water from the culvert and/or rainwater from the storm. He also
opined that hydrostatic pressure caused damage during the second claim incident.
19.
{¶ 44} Because there was an anti-concurrent causation clause in the policy before
us, we find coverage was excluded when there was more than one cause for the loss and
one of the causes was an excluded cause. The backup coverage endorsement did not
provide additional protection for property from damage caused by a combination of
covered and non-covered causes.
2. Did the Backup Coverage Endorsement Provide Stand-Alone Coverage?
{¶ 45} Appellants next argue the backup coverage endorsement provides for
separate, stand-alone coverage and is not subject to any of the exclusions applicable
under the basic policy provisions quoted above. They argue that if appellee had intended
for the exclusions in the main policy under each coverage type section to have been
applicable to the backup coverage endorsement, it would have referenced the exclusions
in the endorsement. Furthermore, they argue the placement of the endorsement at the
back of the policy without reference to the water damage exclusions evidences that it was
an amendment to the policy and provided stand-alone coverage.
{¶ 46} Generally, an insurance contract must be read as a whole, with the
endorsement as part of the contract policy. Ward, 129 Ohio St.3d 292, 2011-Ohio-3176,
951 N.E.2d 770, at ¶ 18 citing Penn Traffic Co. v. AIU Ins. Co., 99 Ohio St.3d 227, 2003-
Ohio-3373, 790 N.E.2d 1199, ¶ 30 (additional citation omitted).
{¶ 47} We find the endorsement here is specifically tied to the paragraph 9.b.
exclusion for water damage caused by sewer and drain backup in the main policy by the
second paragraph, which provides that the exclusion does not apply if the insured
20.
purchases specific coverage for this type of loss. The endorsement clearly adds coverage
which the main policy would have excluded. Therefore, we reject appellants’ argument
that the backup coverage endorsement is a separate insurance contract.
3. Was the Water Damage Exclusion a Single Exclusion
Modified by the Backup Coverage Endorsement?
{¶ 48} Appellants next argue that even if the backup coverage endorsement is
construed as being subject to the main policy water damage exclusions, the water damage
exclusion is a single exclusion which does not apply if the backup coverage endorsement
is purchased because the word “exclusion” appears under paragraph 9.b. and at the end of
section 9, and both clauses refer to the same, single exclusion.
{¶ 49} If an insurance contract provision “is reasonably susceptible of more than
one interpretation, they will be construed strictly against the insurer and liberally in favor
of the insured.” King v. Nationwide Ins. Co., 35 Ohio St.3d 208, 519 N.E.2d 1380(1988), syllabus. In this case, we find the language is capable of only one interpretation.
The two uses of the term “exclusion” clearly relate back to two separate types of water
damage exclusions; i.e., water damage in general and specifically water or sewage
backup damage. The indentation structure of the paragraphs within section 9
unambiguously indicate that the phrase “this exclusion” under paragraph 9.b. relates back
to only paragraph 9.b., while the phrase “this exclusion” at the end of section 9 relates
back to the first clause of the entire section, “water damage.” We do not agree with
appellants that these phrases are susceptible to more than one reasonable interpretation.
21.
4. Is the Backup Coverage Endorsement Illusory?
{¶ 50} Appellants argue that our construction would render the backup coverage
endorsement illusory because there would never be a situation where there was coverage
under 9.b. when exclusions 9.a. or 9.c. were applicable.
{¶ 51} In an illusory contract, the promisor “‘retains an unlimited right to
determine the nature or extent of his performance’” which “‘destroys his promise and
thus makes it merely illusory.’” 7 Med. Sys., LLC v. Open MRI of Steubenville, 7th Dist.
Jefferson No. 11 JE 23, 2012-Ohio-3009, ¶ 39, quoting Century 21 Am. Landmark, Inc. v.
McIntyre, 68 Ohio App.2d 126, 129-30, 427 N.E.2d 534 (1st Dist.1980). Because
illusory contracts are not enforceable, courts should “interpret a contract to avoid a result
which renders the contract illusory.” State v. Stanley, 7th Dist. Mahoning No. 99-C.A.-
55, 2002-Ohio-4372, ¶ 22, citing State ex rel. Gordon v. Taylor, 149 Ohio St. 427, 79
N.E.2d 127 (1948), paragraph two of the syllabus. Accord Cincinnati v. Cameron, 33
Ohio St. 336, 364 (1878). If “‘there is some benefit to the insured from the face of the
endorsement, it is not an illusory contract.’” Ward, 129 Ohio St.3d 292, 2011-Ohio-
3176, 951 N.E.2d 770, at ¶ 24, citing State Auto Ins. Co. v. Golden, 125 Ohio App.3d
674, 678, 709 N.E.2d 529 (8th Dist.1998).
{¶ 52} We find the endorsement was not an illusory contract. It is clear under the
policy and backup coverage endorsement that coverage will be provided where the cause
of the loss is only from water backing up through the sewers or drains designed to
remove subsurface water from the foundation area. Therefore, the endorsement has some
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benefit to the insured. Coverage is only excluded when damage is also occurring as a
result of surface flooding and/or excessive subsurface water buildup which causes
hydrostatic pressure. The fact that there can be situations where the backup coverage
endorsement is available prevents the endorsement from being an illusory contract.
Therefore, we find appellants’ second assignment of error not well-taken.
Third Assignment of Error
{¶ 53} In their third assignment of error, appellants argue that the trial court
misconstrued the policy and erred in granting summary judgment against appellants
regarding the “fungi, wet or dry rot or bacteria” loss.
{¶ 54} Even without considering appellants’ excluded evidence, appellants argue
appellee was not entitled to summary judgment because it failed to prove by a
preponderance of the evidence that mold was not present. Appellee’s own expert could
not rule out the presence of mold.
{¶ 55} The policy provided as follows in pertinent part:
Fungi, Wet or Dry Rot or Bacteria Coverage
“We” will pay up to a total of $10,000 for:
1. direct physical loss to property covered under PROPERTY
PROTECTION--SECTION 1, * * * resulting from, or consisting of
“fungi,” wet or dry rot or bacteria if the direct result of a PERIL
WE INSURE AGAINST; and
***
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The $10,000 limit is the most “we” will pay for the cost:
a. to remove “fungi,” wet or dry rot or bacteria from
covered property;
b. to tear out and replace any part of the building or other
covered property is needed to gain access to the
“fungi,” wet or dry rot or bacteria; and
c. of any testing of air or property to confirm the absence,
presence or level of “fungi,” wet or dry rot or bacteria
whether performed prior to, during or after removal, repair,
restoration or replacement. The cost of such testing will be provided
only to the extent that there is a reason to believe that there is a
presence of “fungi,” wet or dry rot or bacteria.
The coverage provided above applies only when such loss or costs
are the result of the PERIL WE INSURE AGAINST which occurs
during the policy period and only if all reasonable means were used
to save and protect the property from further damage at or after the
time of the “occurrence” of the PERIL WE INSURE AGAINST.
{¶ 56} Appellants argue that under subsection c. quoted above, that the need to
test for mold is covered when there is a reason to believe that mold might be present and
is the result of a covered loss. Because the first claim incident was a covered loss,
appellants argue that they were entitled to coverage for testing for mold. Appellants
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argue the presence of water in the basement and the results from their positive test results
for mold indicated a need for testing. Appellants’ evidence of testing for mold was
excluded from evidence, however, because it was not properly submitted to the court
pursuant to Civ.R. 56(E).
{¶ 57} The trial court found that while appellee would have been obligated under
the policy to cover mold damage resulting from the first claim incident, there was no
evidence of any mold. Furthermore, while appellee would also have been obligated to
test for the presence of mold after the first claim incident, that obligation was triggered
only when there was a reason to suspect mold might be present. Because the restoration
company paid by appellee treated the premises with an anti-microbial agent when
cleaning up after the first claim incident, the trial court found there was no reason to
believe that mold was present after the cleanup.
{¶ 58} We agree with the trial court. The promise to pay for the cost of testing for
mold was triggered only when it is a result of a covered loss, which would exclude mold
resulting from the second claim. As to the first claim, both insurance agents attested that
the matter of mold was not raised and they saw no evidence of mold. Davis further
attested appellee paid for a restoration company to clean the property. Furthermore,
Bostwick examined the premises for mold months after the second claim and found no
evidence of mold. There was no evidence in the record that mold was suspected other
than the fact that a backup of water through the sump pump had occurred. But, Bostwick
attested that there was little likelihood that the flooding water contained a sufficient level
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of fungi or bacteria to cause damage because it was surface rain water and not sewage
water. He further opined that removing the water and wiping down the surfaces would
have been sufficient to prevent damage from mold and that action was taken, plus more,
by the restoration company.
{¶ 59} Therefore, we find appellants’ third assignment of error not well-taken.
Fourth Assignment of Error
{¶ 60} In appellants’ fourth assignment of error, they argue that the trial court
erred in overruling appellants’ timely evidentiary objections to the “expert” testimony of
Bostwick allegedly proffered by appellee without a proper foundation and contrary to
Evid.R. 702 and 703 and the trial court erred by relying on that testimony as a basis for
granting summary judgment in favor of appellee. In its April 18, 2016 final judgment the
trial court denied the Hartmans’ motion to strike without comment.
{¶ 61} A witness is not presumed to be an expert and the party offering the
testimony has the burden to show the witness has the qualifications to testify as an expert.
Tully v. Mahoning Exp. Co., 161 Ohio St. 457, 119 N.E.2d 831 (1954), paragraph two of
the syllabus. The trial court acts as a gatekeeper and must determine if the expert’s
methodology for formulating his expert opinion is reliable and the opinion testimony is
relevant before allowing the expert to testify. Terry v. Caputo, 115 Ohio St.3d 351,
2007-Ohio-5023, 875 N.E.2d 72, ¶ 24. The expert does not have to be the most
knowledgeable expert. McCubbin v. Mich. Ladder Co., 112 Ohio App.3d 639, 642-643,
679 N.E.2d 1142 (1st Dist.1996). Qualification of an expert is a matter within the sound
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discretion of the trial court. Evid.R. 104(A); Celmer v. Rodgers, 114 Ohio St.3d 221,
2007-Ohio-3697, 871 N.E.2d 557, ¶ 19. On appeal, the trial court’s ruling will not be
reversed absent a showing of an abuse of discretion. Id.{¶ 62} A witness may testify as an expert if their testimony “relates to matters
beyond the knowledge or experience” of the average juror, the expert has “specialized
knowledge, skill, experience, training, or education” about the matter, or the testimony is
based on “reliable, scientific, technical, or other specialized information.” Evid.R. 702.
The expert may base his opinion on facts or data he has perceived or were admitted into
evidence, Evid.R. 703. State v. Solomon, 59 Ohio St.3d 124, 570 N.E.2d 1118 (1991),
syllabus. The expert may testify regarding his opinion after disclosure of the facts or data
upon which his opinion is based. Evid.R. 705.
{¶ 63} Civ.R. 56(E) requires that an expert’s affidavit for summary judgment
purposes include the supporting facts upon which the expert’s opinions are based and
cannot state merely legal conclusions. Nu-Trend Homes, Inc. v. Law Offices of DeLibera,
Lyons, & Bibbo, 10th Dist. Franklin No. 01AP-1137, 2003-Ohio-1633, ¶ 59. The party
opposing the expert’s opinion bears the burden of proving the expert’s opinions are
unsupported. Holman v. Shiloh Grove L.P., 10th Dist. Franklin Nos. 15AP-228, 15AP-
797, 2016-Ohio-2809, ¶ 20. Furthermore, the expert is not required to additionally
support his opinion with tests or experiments if there was a sufficient foundation for his
opinion. Renicker v. Smith, 5th Dist. Tuscarawas Nos. 1998AP050087, 1998AP090107,
1999 Ohio App. LEXIS 1934, *7-8 (Apr. 21, 1999). The expert must render an opinion
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to a reasonable degree of scientific certainty. State v. Jackson, 92 Ohio St.3d 436, 448,
751 N.E.2d 946 (2001).
{¶ 64} First, appellants argue Bostwick disclosed no background, education, or
experience sufficient to confer upon him some expertise in the field of microbiology or
chemistry, much less the ability to detect mold spores without testing. Second, appellants
make two challenges to Bostwick’s opinions regarding the presence of fungi and bacteria:
1.) Bostwick’s opinion no mold was present was based solely upon his examination of
the suspected mold areas by scratching and smelling the area; and 2.) Bostwick’s opinion
that it was unlikely there would be mold growth because the flooding was from rain
water, was unsupported. Appellants argued Bostwick’s statements regarding the
presence or absence of mold lacked a foundation, are pure speculation and conjecture,
and lack reliability based on scientific or technical principles because he did not conduct
any mold tests and he did not examine the removed drywall.
{¶ 65} We reject appellants’ challenge that Bostwick should not have been
qualified as an expert. Bostwick attested that he had over 25 years of significant
experience in forensic evaluations of homes to determine the cause and existence of
damage to structures, including the issues of water infiltration and flood events, and has
been recognized as an expert by many courts. Furthermore, he had been involved in over
100 evaluations regarding the issue of mold growth. We find no basis for concluding the
trial court abused its discretion by qualifying Bostwick as an expert regarding the cause
of water infiltration and flooding, including water damage and mold.
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{¶ 66} Second, we find Bostwick’s statements of fact were supported by the
evidence in the record. Mr. Hartman stated in his e-mail that water entered the home
during the first claim incident through a backup of the sump pump during a heavy rain.
Davis attested he inspected the home after the first flooding incident and did not see
mold, the Hartmans did not claim to have seen mold, and a restoration company was paid
to take measures to prevent mold growth. The company’s invoice did not indicate mold
was discovered. Finally, Bostwick’s experience qualified him to give an opinion about
the likelihood of the presence of fungi/bacteria in rainwater flooding.
{¶ 67} Third, we find Bostwick’s opinions were reliable. His opinions of the
presence of mold and the likelihood of mold was based on his experience and his
education regarding fungi and bacteria growth in structures. He admitted he did not
conduct any chemical testing of the areas, although he did check the moisture content of
the area to ensure that it was within normal ranges. He specifically stated that he could
not rule out the possibility of mold, but only that he could not find any evidence of mold
and he believed this finding should be expected when flooding was due to rainwater.
{¶ 68} When all of the facts and Bostwick’s experience are considered together,
we find his opinion regarding the existence of mold growth was reliable and based on
facts in evidence. Perhaps further chemical testing could have been conducted. But, that
is an issue regarding the weight to be given Bostwick’s opinion and not its admissibility.
{¶ 69} Finally, appellants argue Bostwick had no qualification or factual basis for
opining that surface water entered the basement through the windows and caused
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damage. Appellants overlook, however, the evidence from Mr. Hartman’s email
reporting that surface water came into the basement through the windows, a fact
confirmed by Fetters’ inspection, as well as Bostwick’s examination of the window areas.
{¶ 70} Furthermore, the issue of the amount of water that entered the basement
through the windows and caused loss during the second claim incident is irrelevant. The
water from both causes contributed to a significant amount of water accumulating in the
basement. There was no evidence that the two separate causes of water infiltration
caused separate and distinct damage. The policy excludes coverage whenever there are
concurrent causes of the damage; there is no proportionality rule.
{¶ 71} Therefore, we find appellants’ fourth assignment of error not well-taken.
{¶ 72} Therefore, we conclude the trial court properly granted summary judgment
in appellee’s favor. Because the granting of summary judgment resolved all of the issues
in this case, we find the trial court properly dismissed the complaint. Having found the
trial court did not commit error prejudicial to appellants and that substantial justice has
been done, the judgment of the Wood County Court of Common Pleas is affirmed.
Appellants are ordered to pay the costs of this appeal pursuant to App.R. 24.
Judgment affirmed.
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Hartman v. Erie Ins. Co.
C.A. No. WD-16-022
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.
Mark L. Pietrykowski, J. _______________________________
JUDGE
Arlene Singer, J.
_______________________________
James D. Jensen, P.J. JUDGE
CONCUR.
_______________________________
JUDGE
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