FLOOD EXCLUSION APPLIES TO DEFEAT CLAIM

Insured Admits Loss Caused by Flood Sufficient to Deny Claim

Sep 07, 2022

BACKGROUND

Sosa’s house was damaged during Hurricane Harvey on August 26, 2017. Shortly thereafter, Sosa filed a claim with Auto Club, which insured her house. Sosa reported that two feet of floodwater had entered her home, her roof was missing shingles and was leaking, and she had sustained interior damage. Auto Club determined that her damage was caused by flood water, which was expressly excluded from coverage under Sosa’s homeowner’s insurance policy that was in effect during Hurricane Harvey.

On September 26, 2017, Auto Club denied her claim. On November 11, 2020, almost three years after the denial and more than three years after the damage, Sosa filed suit against Auto Club for breach of the insurance policy.

Sosa filed a first amended petition, which was her live pleading when the county court entered summary judgment against her. Sosa’s amended petition was identical to her original petition except that it changed the date of loss from August 26, 2017, to June 28, 2019.

AUTO CLUB’S MOTION FOR SUMMARY JUDGMENT

Auto Club filed a traditional motion for summary judgment arguing that it was entitled to judgment as a matter of law on several grounds effective grounds. Auto Club argued that Sosa’s claims are time barred by the two-year-and-one-day limitations period contained in Sosa’s policy because Sosa filed the lawsuit more than three years after her claims accrued, and that Sosa’s policy did not cover loss from flood or surface water, which it contended was the basis of Sosa’s claimed damage.

COUNTY COURT’S RULING AND MOTION FOR NEW TRIAL

The county court granted Auto Club’s summary judgment motion. The court also found that Auto Club had disproved several elements of Sosa’s breach of contract action; flood and surface water damages were not covered under the policy; and all flood and surface water damages were excluded from coverage. The court ordered that Sosa take nothing and dismissed her claims with prejudice.

SUMMARY JUDGMENT

Sosa, as an appellant must challenge each independent ground that could fully support the trial court’s challenged ruling. When an unchallenged ground supports a complained-of ruling or judgment, the Court of Appeal must accept the validity of that unchallenged independent ground, and thus any error in the grounds challenged on appeal is harmless because the unchallenged independent ground fully supports the complained-of ruling or judgment.

Auto Club sought summary judgment on four grounds.

Auto Club argued that Sosa’s claimed damages were excluded from coverage under the homeowner’s policy, and therefore it was not liable for her damages.
Auto Club argued that Sosa’s claims were time barred.
Auto Club argued that its evidence disproved several elements of Sosa’s breach of contract claim.
Auto Club argued that Sosa’s extracontractual claims were not viable in the absence of a breach of contract.

The Failure to Dispute a Ground for Summary Judgment

On appeal, Sosa challenged only three of the four grounds. Sosa did not challenge the summary judgment order on the ground that her claimed damages were covered under the policy. Indeed, her appellate brief does not mention flood or surface water.

A policy provision that excludes claimed damages is an independent ground that supports dismissal of such claims. Because Sosa’s claims are contractual in nature and Auto Club’s liability for her claims flows from the homeowner’s policy, Auto Club is not liable for damages that are expressly excluded under the insurance policy.

The appellate court concluded that it need not decide whether summary judgment is meritorious on all stated grounds in order to affirm. Because Sosa did not challenge the ruling on appeal the flood exclusion ground independently supports summary judgment in Auto Club’s favor.

Any other error about which Sosa complained on appeal is harmless considering the unchallenged ground supporting the summary judgment order. Because summary judgment was proper the county court did not abuse its discretion by denying her motion for new trial.

Summary judgment was proper. The Court of Appeal concluded that the county court did not act arbitrarily, unreasonably, or without reference to guiding rules or principles in denying Sosa’s motion for new trial.

The trial judgment was affirmed.

ZALMA OPINION

The facts established that Auto Club had four viable grounds for summary judgment, one of which Sosa did not dispute nor even mention in her appellate briefing. As a result the Court of Appeal had no choice but to affirm the decision of the County Court because her pleadings admitted that the Auto Club’s position was correct. That she tried to cheat by changing the date of loss was contumacious but, in effect, a wasted effort that should have been sanctioned.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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