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Erie Insurance Exchange v. Sams

Court of Appeals of Indiana

November 5, 2014

ERIE INSURANCE EXCHANGE, Appellant-Plaintiff, Counterclaim-Defendant,
v.
TROY SAMS and TERESA SAMS, Appellees-Defendants, Counterclaimants

Page 183

APPEAL FROM THE LAGRANGE CIRCUIT COURT. The Honorable J. Scott Vanderbeck, Judge. Cause No. 44C01-1212-CT-19.

ATTORNEYS FOR APPELLANT: JAMES P. STRENSKI, DENNIS F. CANTRELL, Cantrell Strenski & Mehringer, LLP, Indianapolis, Indiana.

ATTORNEY FOR APPELLEES: KEVIN W. MARSHALL, Hobart, Indiana.

BAILEY, Judge. NAJAM, J., and PYLE, J., concur.

OPINION

Page 184

BAILEY, Judge

Case Summary

Following a bench trial, Erie Insurance Exchange (" Erie" ) appeals the trial court's judgment ordering Erie to pay $63,924.89 to Troy Sams and Teresa Sams (the " Samses" ) for losses they sustained after a storm damaged their home. We affirm.

Issues

Erie presents two issues for review, which we reframe as:

I. Whether the trial court erred in finding that the Samses' loss was covered under the Erie policy, despite the presence of policy exclusions for loss caused by deterioration and faulty construction materials; and
II. If the Samses' loss was covered by the Erie policy, whether the trial court's judgment of $63,924.89 in replacement cost was clearly erroneous.

Facts and Procedural History

In 1998, the Samses built a home in Howe, Indiana. On April 12, 2012, a storm that produced eighty-mile-per-hour winds blew through the Howe area. The wind

Page 185

damaged the exterior vinyl siding and tore shingles off the multi-peaked roof of the Samses' home. Prior to the storm, the Samses did not have any water leaks in the house. After the storm, the southwest slope of the roof, located above the kitchen, began to leak. Water also infiltrated the living room, located in the center of the home under a north-south roof ridge, and damaged the interior car siding that lined the room's cathedral ceiling. After the water damage, mold began to grow in the cathedral ceiling beams.

In June 2012, the Samses filed a claim with Erie, their homeowners insurance carrier, for all storm damage. At the time, the Samses were covered under Erie's Ultracover HomeProtector Policy (the " Policy" ), which, in addition to personal property and other structures, provided replacement cost coverage for the residence dwelling up to $254,000. Under Dwelling Coverage, the Policy stated, in relevant part:

We will pay for loss to:

1. Your dwelling at the residence premises shown on the Declarations. Dwelling includes attached structures, and building equipment and fixtures servicing the premises.

(App. at 30.)[1] Under Perils We Insure Against, the Policy further stated:

We pay for direct physical loss to property insured under the Dwelling. . . Coverage [], except as excluded or limited herein.

(App. at 31.)

These two provisions were subject to various exclusions, including:

We do not pay for loss resulting directly or indirectly from any of the following, even if other events or happenings contributed concurrently, or in sequence, to the loss:
. . . .
5. caused by:
. . . .
b. mechanical breakdown, deterioration, wear and tear, marring, inherent vice, latent defect, tree roots, rust or smog.

(the " Deterioration Exclusion" ) (App. at 31-32, 45.)[2]

We do not pay for loss:

1. by weather conditions if any peril excluded by this policy contributes to the loss in any way.
2. caused by, resulting from, contributed to or aggravated by ...

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