PEOPLE'S TRUST INSURANCE COMPANY v. PAUL GUNNSSER

CourtDistrict Court of Appeal of Florida
DecidedNovember 9, 2023
Docket23-0492
StatusPublished

This text of PEOPLE'S TRUST INSURANCE COMPANY v. PAUL GUNNSSER (PEOPLE'S TRUST INSURANCE COMPANY v. PAUL GUNNSSER) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
PEOPLE'S TRUST INSURANCE COMPANY v. PAUL GUNNSSER, (Fla. Ct. App. 2023).

Opinion

SIXTH DISTRICT COURT OF APPEAL STATE OF FLORIDA _____________________________

Case No. 6D23-492 Lower Tribunal No. 20-CA-002396 _____________________________

PEOPLE’S TRUST INSURANCE COMPANY,

Appellant/Cross-Appellee, v.

PAUL GUNSSER,

Appellee/Cross-Appellant. _____________________________

Appeal from the Circuit Court for Lee County. Sherra Winesett, Judge.

November 9, 2023

TRAVER, C.J.

People’s Trust Insurance Company (“People’s Trust”) and Paul Gunsser both

appeal the final judgment entered in Gunsser’s favor.1 Water overflow from a

deteriorated cast iron plumbing system damaged Gunsser’s home. But Gunsser’s

homeowner’s insurance policy did not cover the costs to tear out and fix his home’s

1 This case was transferred from the Second District Court of Appeal to this Court on January 1, 2023. We have jurisdiction. See Fla. R. App. P. 9.030(b)(1)(A), 9.110(g). concrete slab to access the system. This is because a water damage exclusion

(“WDX”) endorsement overwrote the original policy provision that would have

covered Gunsser’s loss caused by water discharging from his plumbing system and

the tear out and replacement costs to access the deteriorated pipes. The WDX

endorsement applied here because the deterioration, rust, and corrosion that caused

the plumbing system’s deterioration is “an act of nature.” While Gunsser bought a

limited water damage coverage (“LWD”) endorsement that modified the WDX

endorsement and covered his sudden and direct accidental water damage up to

$10,000, the LWD endorsement did not include tear out and replacement costs

coverage. In finding that the WDX endorsement applies, we affirm the trial court’s

ruling on this issue. And in concluding the LWD endorsement did not cover tear out

and replacement costs, we reverse the trial court’s final judgment with instructions

to enter an amended final judgment excluding these damages.

I. Background and Operative Policy Provisions

People’s Trust insured Gunsser under an all-risk policy. As a typical all-risk

policy, Gunsser’s policy covered all losses unless specifically excluded. See, e.g.,

Kokhan v. Auto Club Ins. Co. of Fla., 297 So. 3d 570, 572 (Fla. 4th DCA 2020). For

this loss, four policy sections are at issue. The first two sections set the initial scope

of People’s Trust’s coverage if the plumbing leak warranted tear out and replacement

of Gunsser’s concrete slab to access the corroded plumbing system. Under those

2 sections, the water loss and tear out and replacement costs would be covered under

the policy. The last two sections of the policy, the WDX and LWD endorsements,

however, overrode the first two sections to exclude tear out and replacement costs.

First policy section. The first section of Gunsser’s policy outlined the basic

parameters of what the policy covered and excluded. It insured “against direct

physical loss to property,” including Gunsser’s dwelling. But the policy excluded,

among other occurrences, any loss caused by wear and tear, rust, or other corrosion.

Thus, because rust and corrosion damaged Gunsser’s cast iron plumbing system, he

would have no coverage but for a significant exception. That exception created

coverage for discharge or overflow from a plumbing system and added coverage for

tear out and replacement of any part of Gunsser’s house necessary to access and fix

the system. Thus, the scope of the exception is significant. By its nature, the

subsequent destruction and replacement of a concrete slab, unaffected by a water

leak, is not a “direct physical loss to property.” It is, rather, indirect or ancillary.

Even so, the first policy section illustrates that without the WDX endorsement, there

was no question that People’s Trust agreed to pay for Gunsser’s tear out and

replacement costs “unless the loss was otherwise excluded”:

3 SECTION I – PERILS INSURED AGAINST A. Coverage A – Dwelling and Coverage B – Other Structures 1. We insure against risk of direct physical loss[2] to property described in Coverages A and B. 2. We do not insure, however, for loss: .... c. Caused by: .... (5) Any of the following: (a) Wear and tear, marring, deterioration; (b) Mechanical breakdown, latent defect, inherent vice or any quality in property that causes it to damage or destroy itself; (c) Smog, rust or other corrosion; .... Exception to c. (5) Unless the loss is otherwise excluded, we cover loss to property covered under Coverage A or B resulting from accidental discharge or overflow of water or steam within a: i. Storm drain, or water, steam or water pipe, off the “residence premises”; or ii. Plumbing, heating, air conditioning or automatic fire protective sprinkler system or household appliance on the “residence premises”. This includes the cost of tearing out and replacing any part of a building necessary to repair the system or appliance. However, such tear out and replacement coverage only applies to other structures if the water or steam causes actual damage to a building on the “residence premises”.

Second policy section. The second policy section at issue, standing alone, did

not alter coverage here. It merely defined “water” in a manner that did not affect

2 The underlined and italicized portions of the policy excerpts are added for emphasis throughout this opinion.

4 People’s Trust’s obligation to cover Gunsser’s loss, including his tear out and

replacement costs:

SECTION I – EXCLUSIONS A. We do not insure 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. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area. .... 3. Water This means: a. Flood, surface water, waves, including tidal water and tsunami, tides, tidal water, overflow of any body of water, or spray from any of these, all whether or not driven by wind, including storm surge; b. Water which: (1) Backs up through sewers or drains; or (2) Overflows or is otherwise discharged from a sump, sump pump or related equipment. c. Water below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure. ....

Indeed, rust and corrosion caused Gunsser’s toilet to overflow, and not a tsunami, a

sump pump discharge, or a swimming pool leak.

Third policy section: WDX endorsement. But, for a $151 premium credit,

Gunsser contracted with People’s Trust to modify the definition of “water.” The

third policy section at issue, the WDX endorsement, replaced the policy’s water

exclusion. It now defined water to mean, among others, discharge or overflow of

5 water from Gunsser’s plumbing system, as long as “human, animal forces, or any

act of nature” caused it:

WATER DAMAGE EXCLUSION

THIS ENDORSEMENT CHANGES YOUR POLICY, PLEASE READ IT CAREFULLY

For a premium credit, your policy is changed as follows:

....

Under SECTION I – EXCLUSIONS item 3. Water is replaced by the following:

3. Water, meaning: .... e. Discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance; . . . .... caused by or resulting from human or animal forces or any act of nature.

All other provisions of your policy that are not affected by this endorsement remain unchanged.

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PEOPLE'S TRUST INSURANCE COMPANY v. PAUL GUNNSSER, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peoples-trust-insurance-company-v-paul-gunnsser-fladistctapp-2023.