Was melted hail surface water?
Michael Martinez owned a house in Erie, Colorado. The house had a finished basement with windows below the ground that were surrounded by window wells.
On August 3, 2013, a severe thunderstorm struck Erie. According to Martinez, some heavy hail and rain collected at the base of his window wells, and the hail prevented the accumulating rainwater from percolating into the ground. As alleged by Martinez, the rainwater accumulated on top of the hail to such an extent that it eventually overflowed the basement windows, seeped into the basement, and caused substantial damage to his house and personal property.
Martinez filed a claim with his insurer, American Family Mutual Insurance Company. The insurer denied the claim, having concluded that the damage to Martinez’s house was caused by either “flooding” or “surface water,” and therefore was expressly excluded from coverage under Martinez’s policy.
Martinez filed suit against American Family, seeking a declaratory judgment on the issue of coverage. Martinez also asserted claims for contractual and extra-contractual damages. American Family filed a motion for summary judgment on the issue of coverage, arguing that the policy’s water damage exclusion for “flood” and “surface water” applied, as a matter of law, to the damage to Martinez’s house.
The court granted American Family’s motion for summary judgment, concluding that the rain and hail that collected in the window wells was “surface water” and thus the loss from the resulting damage was excluded by the plain language of the policy. Martinez appealed.
On appeal, Martinez contended that the damage to his basement and personal property was not caused by “surface water.” He also contended that, even if the water was surface water, it lost that character when it entered the window wells. Thus, Martinez argued that his policy did not bar coverage as a matter of law and that the district court erred in granting American Family’s motion for summary judgment.
The court noted that Martinez’s versions of the events at issue changed over time.
On August 22, 2013, prior to the initiation of his lawsuit, Martinez told an American Family claims investigator that
“about a foot or two of hail … fell on the ground and fell into my window wells. [O]bviously the hail … seeped through the window … as it was melting, [and] that caused the water to come through the window and it flooded my basement out.”
In his complaint filed on February 6,
2015, Martinez alleged that his
“house incurred accidental direct physical loss as the result of a severe hail and rainstorm. The hail was so heavy that it filled the window wells, not allowing rainwater to drain. As a result, the rainwater entered the [house] through the windows. The rain did not touch the ground and was above the surface of the ground at all times before entering into the [house].”
Thus, contrary to his initial claim, Martinez appeared to allege that the melted hail did not damage his house, but that rain on top of the hail did so.
Nine months after filing his complaint, in an affidavit filed with his response to American Family’s motion for summary judgment, Martinez elaborated on his more recent account. In his affidavit, Martinez averred:
“On August 3, 2013, my home was hit by a hailstorm and rainstorm. The hail was so heavy that it filled the window wells, not allowing rainwater to drain. I also believe the gutters filled with hail so that rainwater ran off the roof and directly into the window wells. As a result, rainwater that fell from the sky and ran off the roof went directly into the window wells and could not drain. The rainwater never touched the ground and was never on the surface of the ground before entering my home and causing damage.
On appeal, Martinez reasserted the version of events contained in his complaint and affidavit. American Family argued that, under any version of events alleged by Martinez, his policy barred coverage as a matter of law. The court agreed with American Family and concluded that the district court did not err in entering summary judgment.
Martinez’s policy was an all-riskpolicy that was designed to cover awide range of damages to the insured’shouse and property unless coverage for a particular kind of loss or damage was expressly excluded.
The specific provision relied on by American Family as grounds for denying Martinez’s claim stated:
We do not ensure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss …
- Water Damage, meaning:
- flood, surface water, waves, tidal water or overflow of a body of water, from any cause ….
(Emphasis added.)
The court concluded that the melted hail on Martinez’s roof, as well as the melted hail that allegedly fell directly into Martinez’s window wells, was surface water. Because the court concluded that Martinez’s policy unambiguously barred coverage as a matter of law, it affirmed the district court’s entry of summary judgment in favor of American Family.
Martinez vs. American Family Mutual Insurance Company-Colorado Court of Appeals, Division A-February 9, 2017-No. 16CA0456.
