Florida Appeals Court Upholds Insurer’s Denial of Interior Water Damage Claim Under Policy’s Water Damage Exclusion Endorsement

In Spartan Services Corp. v. People’s Trust Insurance Company, the Third District Court of Appeal affirmed the trial court’s grant of summary judgment in the carrier’s favor, holding that when the policy is read as a whole, the Water Damage Exclusion Endorsement (WDE) excluded coverage for the claimed interior rainwater damage and, thus, Spartan Services Corp.’s services related to same.

Spartan brought suit against People’s Trust for breach of contract for failure to pay Spartan’s water mitigation and roof tarping invoices related to an underlying insurance claim. People’s Trust denied the claim and Spartan’s invoices related to the interior water damage. People’s Trust claimed its inspection did not find any storm damage to the roof, and it determined the interior leaking was due to excluded wear and tear, and deterioration of the roof and its components. People’s Trust also cited the policy’s WDE, which excludes coverage for rainwater damage to the interior of the property unless the damage was the result of a peril insured against that is caused by an opening in the roof.

During the underlying litigation, People’s Trust sought summary judgment based on the WDE. In response, Spartan argued the WDE did not apply to Coverage A property under the policy; as such, it was not required to prove a peril insured against caused an opening in the roof. The trial court granted summary judgment in People’s Trust’s favor, and this appeal followed.

Notably, on appeal, Spartan abandoned its previous argument that the WDE did not apply to Coverage A and, instead, argued that the ensuing loss provision under the wear and tear, deterioration exclusion provided coverage for the interior damage. The Third District disagreed. The court found that the WDE did apply to exclude coverage for the interior damage and that Spartan failed to satisfy its burden to prove an exception to the WDE exclusion for same. Accordingly, the Third District affirmed summary judgment in favor of People’s Trust. 

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