Terms of the insurance contract are not facially ambiguous.

The terms of the insurance contract are not facially ambiguous. However, the basic undisputed facts agreed to by the parties demonstrate the existence of the alleged latent ambiguities in the terms of the contract. Specifically, based on the undisputed fact that a large amount of water flowed from the pipe over time, the meaning of the contractual terms of “seepage” and “sudden” are less than clear. Additionally, the relevant facts regarding the cause of the escaped water—whether it escaped as an escalating leak or as a burst that continued at a constant rate—remain at issue. Because these “latent ambiguity[ies] affecting a disputed contract provision” existed, “there necessarily [existed] a disputed issue of material fact.” Accordingly, summary judgment was improper.

Case Law Alerts, 4th Quarter, October 2014