Mr. Hicks sued American Integrity for breach of contract.

The insurer moved for summary judgment. American Integrity argued that because the leak had occurred over a period of more than 14 days, its policy unambiguously excluded coverage for all of Mr. Hicks' losses.

For his part, Mr. Hicks filed his own motion for summary judgment, on three issues:

- That he had sustained a physical loss during the policy period;

- That all losses occurring within the first 13 days were covered; and

- That he was entitled to $40,926.77 for losses occurring within the first 13 days of the leak.

Mr. Hicks attached to his motion an extensive report from a forensic general contractor that attempted to calculate the amount of damage to Mr. Hicks' home within the first 13 days of the leak.

At a hearing on the motions, the trial court told Mr. Hicks, "Basically, you're asking [this court] to say whether the policy covered the loss in the first 13 days. . . . It might, but I'm not so sure that the time frame of these particular facts would allow for that determination."

The trial court then granted summary judgment in American Integrity's favor.

Mr. Hicks appealed, contending that the exclusion applied only to losses "caused by water on day 14 and onward."

The Appellate Court's Decision

The appellate court reversed, holding that an insurance policy excluding losses caused by constant or repeated leakage or seepage over a period of 14 days or more did "not unambiguously exclude losses caused by leakage or seepage over a period of [13] days or less."

In its decision, the appellate court explained that it was "not unambiguously clear" that a provision excluding losses caused by constant leakage of water over a period of 14 or more days likewise excluded losses caused by constant leakage of water over a period of 13 days or less. Ambiguous insurance provisions, the appellate court observed, "must be construed against the insurer and in favor of coverage."

The appellate court added that the trial court's express reasoning for granting summary judgment in American Integrity's favor – that the policy "might" cover "the loss in the first 13 days," but that the trial court was nevertheless "not so sure that the time frame of these particular facts would allow for that determination" – "was flawed." For an all-risks policy such as the one issued by American Integrity to Mr. Hicks, the appellate court reasoned, once the insured established a loss within the terms of a policy, the burden shifted to the insurer to prove that a particular loss arose from an excluded cause. Whether such a determination was possible was a genuine issue of material fact precluding summary judgment, the appellate court said.

The appellate court then ordered the trial court to enter partial summary judgment in Mr. Hicks' favor on the sole issue of coverage within the first 13 days of the leak, with the extent of the losses to be determined at trial. As for losses occurring after the first 13 days, the appellate court concluded, the burden would be on American Integrity to prove that a particular loss was sustained after the thirteenth day and therefore was not covered under the language of the exclusion provision.

The case is Hicks v. American Integrity Ins. Co., No. 5D17-1282 (Fla. Ct.App. Feb. 23, 2018). Attorneys involved include: Mark A. Nation and Paul W. Pritchard, of The Nation Law Firm, Longwood, for Appellant. Andrew P. Rock and Julia G. Young, of The Rock Law Group, P.A., Maitland, for Appellee.

FC&S Legal Comment

Other courts have reached similar results in cases involving substantially similar exclusions.

For example, In Wheeler v. Allstate Insurance, 687 F. App'x 757, 759 (10th Cir. 2017), a leak in the insured's seasonal cabin went undiscovered for several months, by which point the basement had been flooded with five inches of water. At trial, the insured argued that he was entitled to coverage for the first week of damage caused by the leak. The U.S. Court of Appeals for the Tenth Circuit reversed the district court's grant of summary judgment in the insurer's favor, finding that the "claimed damage was not caused by leakage over a period of 14 days or longer; it was caused by leakage over a period of less than 14 days."

Similarly, in another case, Coutts v. Florida Peninsula Insurance, 23 Fla. L. Weekly Supp. 1012b (Fla. 11th Cir. Ct. Mar. 4, 2016), the plaintiff sued her insurance company after it denied her claim. The appellate court held, "[I]f the 'loss' was realized between days 1 and 13 it is not excluded, even though the 'condition' may have remained on the property for 14 days or longer. Thus, the stipulation that the home was exposed to water for 14 or more days proved just that—and nothing more."