The Supreme Court of Mississippi has broadly interpreted an earth movement exclusion in a homeowners' insurance policy, holding that it applied to any earth movement, not just earth movement from natural forces.
The Case
Dorothy Smith sued her home builder, Larry Brown, d/b/a Brown's Construction Company, and her homeowners' insurance company, Farm Bureau Casualty Insurance Company, alleging that her home's foundation was defective but that Farm Bureau had denied her claim and, therefore, had breached the policy.
Farm Bureau answered and moved for summary judgment, urging that it had properly denied Ms. Smith's claim because the foundation defects were not covered under the policy's earth-movement exclusion.
The trial court denied Farm Bureau's motion, and the dispute reached the Mississippi Supreme Court.
The Farm Bureau Policy
The Farm Bureau policy provided:
- We do not insure for loss caused directly or indirectly by any of the following. . . .
- Earth Movement
Earth Movement means:
- Earthquake, including land shock waves or tremors before, during or after a volcanic eruption;
- Landslide, mudslide or mudflow;
- Subsidence or sinkhole; or
- Any other earth movement including earth sinking, rising or shifting;
caused by or resulting from human or animal forces or any act of nature unless direct loss by fire or explosion ensues and then we will pay only for the ensuing loss.
The Mississippi Supreme Court's Decision
The court reversed, finding that the trial court had erred in denying Farm Bureau's motion for summary judgment.
In its decision, the court explained that Farm Bureau's policy specifically provided that earth movement meant “[a]ny . . . earth movement including earth sinking, rising or shifting . . . caused by or resulting from human or animal forces or any act of nature. . . .” The Farm Bureau policy, the court pointed out, did not limit earth movement to movement resulting from natural forces.
The court then ruled that the earth movement exclusion was “unambiguous” and applied to any earth movement regardless of its cause. Whether caused by the negligence of Ms. Smith's contractor in its placement of fill soil in the construction of Ms. Smith's home or by some other condition, Ms. Smith's damages were a result of earth movement underneath the residence, the court decided. As such, the court held, they fell “within the earth movement exclusion of the policy” and were “not covered damages.”
Accordingly, the court decided, because Ms. Smith's damages were not covered under the policy, Farm Bureau was entitled to summary judgment.
The court also determined that a separate water-damage coverage clause cited by Ms. Smith did not affect its analysis of the earth movement exclusion because the separate water-damage coverage clause specifically stated that it applied “[u]nless the loss is otherwise excluded. . . .” The language contained in the earth movement exclusion made it clear that it excluded coverage for damage resulting from earth movement, regardless of the cause of the earth movement, including human forces (such as water leaks from plumbing). Thus, the water damage coverage clause did not supplant the earth movement exclusion, the court concluded.
The case is Mississippi Farm Bureau Casualty Ins. Co. v. Smith, No., 2017-IA-01406-SCT (Miss. March 7, 2019). Attorneys involved include: Trial court attorneys: SAM S. THOMAS JOSEPH B. MOFFETT DEBORAH McDONALD. Attorneys for appellant: SAM S. THOMAS OWEN P. TERRY. Attorney for appellee: JOSEPH B. MOFFETT.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].