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What is the meaning of “rain?” An Iowa appellate court had to answer that question in an insurance-coverage dispute between Amish Connection, Inc., and its insurance carrier, State Farm Fire & Casualty Company.
Amish Connection leased space in the Crossroads Shopping Mall in Waterloo, Iowa, to operate the Amish Connection Store, using the leased space for storage. Above the ceiling and along the interior back wall of Amish Connection’s space was a four-inch cast iron drain pipe connected to the building’s roof drain line. The roof drain system in the mall was designed to collect water on the roof and transport the water through interior pipes in the mall and down to the storm sewer.
During a heavy rain storm, the drain pipe over Amish Connection’s unit burst, flooding portions of Amish Connection’s storage space and causing damage to the unit and the property within.
Amish Connection submitted a claim to State Farm for the water damage to its storage space and inventory. State Farm denied the claim, citing a limitation in the policy for loss “caused by rain.”
Amish Connection sued and State Farm moved for summary judgment, arguing that the rain limitation precluded recovery for Amish Connection’s loss. The trial court agreed and granted State Farm’s motion for summary judgment.
Amish Connection appealed.
The policy provided that State Farm would pay for:
accidental direct physical loss to property covered unless the loss otherwise was limited or excluded.
The policy also provided:
PROPERTY SUBJECT TO LIMITATIONS
We will not pay for loss:
6. to the interior of any building or structure, or the property inside any building or structure, caused by rain, snow, sleet, ice, sand or dust, whether driven by wind or not, unless:
a. the building or structure first sustains damage by an insured loss to its roof or walls through which the rain, snow, sleet, ice, sand or dust enters; or
b. the loss is caused by thawing of snow, sleet or ice on the building or structure…
The appellate court’s decision
The appellate court reversed.
In its decision, it explained that “rain” was not a defined term in the policy, but that the “ordinary meaning” of “rain” was well understood:
Gene Kelly sang in it. Noah sailed through it. It is water falling from the sky. The common understanding of “rain” is reinforced by reference materials.
The appellate court then declared that it was “fair to say that a reasonable person standing in the interior of a shopping mall underneath a burst drain pipe would not conclude that he or she was standing in the ‘rain.’”
Rejecting the insurer’s argument (and the trial court’s conclusion) that rainwater in the drain pipe was the same thing as rain, the appellate court concluded that, under the plain language of the policy, Amish Connection’s loss was not limited by the provision on which State Farm relied.
The case is Amish Connection, Inc. v. State Farm Fire and Cas. Co., No. 13–0124 (Iowa Ct.App. March 26, 2014). Attorneys involved include: Samuel C. Anderson and Joseph G. Martin of Swisher & Cohrt, P.L.C ., Waterloo, for appellant; Mark W. Thomas of Grefe & Sidney, P.L.C., Des Moines, for appellee.
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