### D ISTRICT 

### C OURT 

### O F 

### A PPEAL 

### O F 

### T HE 

### S TATE 

### O F 

### F LORIDA

F OURTH D ISTRICT

VIATCHESLAV KOKHAN and ZOIA K OKHAN
, Appellant s ,

v.

AUTO CLUB INSURANCE COMPANY OF FLORIDA
, Appellee

.

No. 4D 18

- 3607

[ March 11, 2020 ]

Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County ; Raag Singhal , Judge; L.T. Case No. CACE17

- 000543

.

Melissa A . Giasi of Giasi Law, P.A., Tampa, for appellant s

.

Kimberly Kanoff Berman and Michael A. Packer of Marshall Den nehey Warner Coleman & Goggin, Fort Lauderdale, and Corey K. Setterlund of Marshall Dennehey Warner Coleman & G oggin, Jacksonville, for appellee.

G ERBER
, J

.

The homeowners appeal from the circuit court’s final order granting the insurer’s summary judgmen t motion on the homeowners’ breach of

contract action. The homeowners ’ action alleged they had filed a claim to be reimbursed for damages to their pool deck and surrounding structures due to a pool drain pipe leak , but the insurer improperly denied their claim on the basis that the policy’s “water damage” and “wear and tear”

exclusions barred their claim.

The circuit court agreed with the insurer’s summary judgment motion

that the policy’s “water damage” exclusion barred the homeowners’ claim

. However , the circuit court did not rule on the insurer’s argument that the policy’s “wear and tear” exclusion also barred the homeowners’ claim

.

On appeal, t he homeowners argue the circuit court erred in finding the policy’s “ water damage ” exclusion barred their claim

. The homeowners

further argue the policy’s “wear and tear” exclusion did not bar their claim

either.2 We agree with the homeowners that the circuit court erred in finding the “water damage” exclusion barred their claim. T he “water damage” exclusion’s plain language does not apply to the homeowners’ claim.

However, we do n ot reach the issue of whether the policy’s “wear and

tear” exclusion applied to the homeowners’ claim , because the circuit court

never ruled on that issue

. We remand to the circuit court for that review.

We present this opinion in f ive sections:

1. The policy at issue;

2. The homeowners’ claim and the insurer’s denial ; 3. The homeowners’ breach of contract suit and the insurer’s summary judgment motion;

4. This appeal ; and

5. Our review.

1. The Policy at Issue

The insurer issued an “all risks” policy to the homeowners. “[A] n ‘all

risk’ policy is not an ‘all loss ’ policy, and this does not extend coverage for every conceivable loss .” Sebo v. Am. Home Assurance Co. , 208 So. 3d 694,

696

- 97 (Fla. 2016) (citation omitted)

. “ An all

- risks policy provides c overage for all losses not resulting from misconduct or fraud unless the policy contains a specific provision expressly excluding the loss from coverage

. ” Mejia v. Citizens Prop. Ins. Co rp. , 161 So. 3d 576, 578 (Fla. 2d DCA 2014) (emphasis added ; citation and internal quotation marks omitted ) . “ [A] n insured claiming under an all

- risks policy has the burden of proving that the insured property suffered a loss while the policy was in effect. The burden then shifts to the insurer to prove that the cause of the loss was excluded from coverage under the policy ’ s terms. ” Jones v. Federated Nat’l

Ins. Co. , 235 So. 3d 936, 941 (Fla. 4th DCA 2018) (citation omitted). “ In short, in all

- risk policies

. . . construction is governed by the language of the exclusionary provisions. ” Sebo , 208 So. 3d at 697.

He re, t h e “all risks” policy at issue contains the following provisions

and exclusions which are relevant here :

WHAT LOSSES ARE COVERED

– COVERAGE C Except as excluded under WHAT LOSSES ARE NOT

COVERED

– PART 1, we cover the following accidental direct physical losses to the personal property that is described

under WHAT PROPERTY IS COVERED

– COVERAGE C:3 . . . .

12. SUDDEN AND ACCIDENTAL DISCHARGE OR

OVERFLOW OF WATER OR STEAM from within:

a. a plumbing system;

. . . .

WHAT LOSSES ARE NOT COVERE D

– PART 1

1. We do not cover any loss to property insured under COVERAGES A, B or C that is caused by, resulting from, contributed to by, or consisting of:

. . . .

c. WATER DAMAGE, meaning:

(1) flood, surface water, waves, tidal water, storm surge,

tsuna mi, seiche, overflow of a body of water, or spray from any of these, whether or not driven by wind;

(2) any liquid or semi

- liquid material or substance from outside of the plumbing system on the residence premises

that enters the residence premises through sewers or drains;

(3) any liquid or semi

- liquid material or substance which overflows or discharges fr om a sump, sump pump, or related equipment;

(4) water below the surface of the ground, including water which exerts pressure on or seeps or leaks or flows through a building; sidewalk; driveway; foundation; swimming pool; spa; or other structure;

. . . .

2. We do not cover any loss to property insured under COVERAGES A or B that is caused by, resulting from, contributed to by, or consisting of:

. . . .4 e. Any of the following:

(1) WEAR AND TEAR, marring, deterioration;

(2) continuous or repeated see page or leakage of water or steam over weeks, months, or years from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance;

. . . .

(7) cracking, shrinking, sagging, bulging, bendin g, expansion, or settling of:

(a) driveways, walkways, or patios;

(b) foundations, floors, walls;

. . . .

If a loss excluded under e. above causes or results in sudden and accidental escape of water from a plumbing system; a heating system; an air conditioning system; an automatic fire protective sprinkler system; or a household appliance, we do cover the direct physical loss caused by the water including the cost of tearing out and replacing any part of a building that is needed to repair the syste m or appliance. We do not cover a loss to the system or appliance from which this water escaped.

(emphas e s in original).

2. The Homeowners’ Clai m and the Insurer’s Denial

T he homeowners claimed their pool’s underground drainpipe had developed a leak, which eventually caus ed significant damage to their pool

deck and surrounding structures, including an adjoining wall and the

home’s exterior walls

.

T he insurer sent an inspector to examine the homeowners’ claim

. The inspector issued an unsworn report of his findings. The inspector found :5 1. Water leak from the pool did not cause damage to the pool deck and the surrounding structures, which included the north wall of the pool and the exterior walls of the residence.

2. Cracks in the c oncrete pool deck were caused by concrete shrinkage. Insufficient expansion/contraction control joints, which was a substandard construction detail, exacerbated the damage.

3. Cracks in the stucco on the exterior walls of the residence were caused by a c ombination of stucco shrinkage and slight differential downward displacement of the lower portion of the wall relative to the upper portion of the wall.

4. Separation and cracks in the north wall of the pool were caused by shrinkage of underlying cementit ious materials and

deterioration of bond between adhered materials.

Based on the inspector’s report, the insurer denied the homeowners’

claim under the policy’s “wear and tear” exclusion . However, the insurer left open the possibility for the homeowners to obtain more information

and resubmit their claim.

T he homeowners hired a pool repair company, which confirmed the pool’s underground drainpipe was leaking

. T he homeowners had the pool repair company replace the pool’s piping system

, and hir ed a separate company to resurface the pool deck. The homeowners then wrote a letter to the insurer containing the pool repair company’s findings and

demand ing the insurer cover their expenditures.

The insurer continued to deny the homeowners’ claim base d on its inspector’s findings.

3. The Homeowners’ Sui t and the Insurer’s Summary Judgment Motion

T he homeowners sued the insurer for breach of contract , alleging the ir pool’s leaking drain pipe caused damages covered under the policy.

T he insurer denied the homeowners’ allegations and alleged several

affirmative defenses. In pertinent part , the insurer alleged the policy’s “water damage” and “wear and tear” exclusion s barred the homeowners’

claim

.6 The insurer moved for summary judgment

. In the motion, the insurer argued the policy’s “ water damage ” exclusion applied because the drainpipe leak was caused by “water below the surface of the ground, including water which exerts pressure on or seeps or leaks or flows through . . . a swimming pool.” Additionally, the insurer argued the policy’s “wear and tear” exclusion barred the homeowners’ claim because the leaking drain pipe and damaged structures had deteriora ted

. In support, the insurer relied on its inspector’s unsworn report’s findings.

In response , the homeowners argued the insurer’s summary judgment motion lacked evidentiary support because the inspector’s report was

unsworn and therefore was inadmissible he arsay

.

At the hearing on the motion, the circuit court said it would not consider the inspector’s unsworn report because it was hearsay.

Despite not considering the inspector’s unsworn report, t he circuit

court nevertheless granted the insurer’s summary judgment motion and entered a final judgment in the insurer’s favor. Specifically, the circuit

court’s order stated , in pertinent part :

[The insurer’s] motion is GRANTED. Among other reasons, the Amended Complaint, paragraph 7, alleges that wate r damage due to pool leakage is a covered loss. It was undisputed this claim related to swimming pool water damage approximately six feet below the ground surface. This claim is specifically excluded under the plain terms of the insurance policy

. . . .

The circuit court did not rule on the insurer’s “ wear and tear ” exc lusion

.

4. This Appeal

This appeal follow ed

. The homeowners argue the circuit court erred in finding the policy’s “water damage” exclusion barred their claim. According to the homeowners, the “ water damage ” exclusion ’s plain language only applies to water pressure coming from outside, not a leak from within the plumbing itself.

Additionally, the homeowners argue the policy’s “ wear and tear ”

ex clusion does not apply because the leak involved a “ sudden and

accidental escape of water from a plumbing system ,” which is an exception

to the policy’s “wear and tear” exclusion

.7 The insurer responds that the policy’s “ water damage ” exclusion applies and, in the alternative, t he policy’s “ wear and tear ” exclusion applies, despite the inspector’s unsworn report. The insurer also argues the policy’s “sudden and accidental escape of water from a plumbing system” exception to the “wear and tear” exclusion is inapplicable because t he leak

occurred slowly, and because “plumbing” plainly refers to the home’s plumbing system, not the pool’s plumbing system.

5. Our Review

“Our review of an order granting summary judgment is de novo, as is the interpretation of an insurance contract and the determination of whether the law requires the insurer to provide coverage. Summary judgment is appropriate where there is no genuine is sue as to any material fact and the moving party is entitled to judgment as a matter of law.”

Allstate Ins. Co. v. Manzo

- Pianelli , 152 So. 3d 654, 656 (Fla. 4 th DCA 2014) (internal citation and quotation marks omitted).

“I n deciding whether an all

- risk p olicy excludes coverage for an

insured ’ s claimed damages, we are guided by well

- established principles of insurance contract interpretation. We begin with the guiding principle that insurance contracts are construed in accordance with the plain language of the polic y as bargained for by the parties. ” Fayad v. Clarendon

Nat’l Ins. Co.

, 899 So. 2d 1082, 1086 (Fla. 2005) (internal quotation marks and brackets omitted)

.

“Where the language in an insurance contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning so as to give effect to the policy as written.” Allstate Ins. Co. v. Orthopedic Specialists

, 212 So. 3d 973, 9 75

- 76 (Fla. 2017 ) (citation omitted)

.

Here, th e homeowners alleged the pool ’s dra inpipe leak caused the damage to their pool deck and surrounding structures . This event would appear to fall outside of the policy’s “water damage” exclusion subsection upon which the insurer relied . That subsection , referred to as subsection (4), define d excluded “water damage” as “water below the surface of the ground, including water which exerts pressure on or seeps or leaks or flows through a building; sidewalk; driveway; foundation; swimming pool; spa; or other structure.” Th at language plainly ref ers to naturally

- existing ground water, based on the description of the type of structures which may be affected by its exertion of pressure, seepage, leakage, or flow. In other words, this exclusion plainly refers to naturally

- flowing water exerting pres sure from outsid e of the plumbing system, not a leak from8 within the plumbing system itself. See Hartford Acc ident & Indem. Co. v. Phelps , 294 So. 2d 362, 363 (Fla. 1st DCA 1974 ) (“ When we consider the terminology used in the exclusion clause in pari materia with the affirmative statement of coverage from leaks in the plumbing system, we conclude that the exclusion was intended to relate only to damage from water not emanating from t he plumbing system. ”).

Our conclusion is consistent with a reading of that subsection in the

context of the other three “water damage” exclusion subsections , all of which also plainly refer to naturally

- flowing water or liquids existing outside of the plu mbing system

. See Orthopedic Specialists , 212 So. 3d at 976 (“[W] hen analyzing an insurance contract, it is necessary to examine the contract in its context and as a whole, and to avoid simply concentrating on certain limited provisions to the exclusion o f the totality

of others.” ) (citation omitted)

.

Subsection (1) define s excluded “water damage” as “ flood, surface water, waves, tidal water, storm surge, tsunami, seiche, overflow of a body of water, or spray from any of these, whether or not driven by wind .”

Subsection (2) define s excluded “water damage” as “ any liquid or semi

liquid material or substance from outside of the plumbing system on the residence premises that enters the residence premises through sewers or

drains .” (emphasis added). And s u bsection (3) define s excluded “water damage” as “ any liquid or semi

- liquid material or substance which overflows or discharges from a sump, sump pump, or related equipment .” A sump is “a pit or reservoir serving as a drain or receptacle for liquids.”

See https://www.merriam

- webster.com/dictionary/sump (last checked Feb. 17, 2020) ; Gov’t Emps

. Ins. Co. v. Macedo , 228 So. 3d 1111, 1113 (Fla. 2017) (“ When a term in an insurance policy is undefined, it should be given its plain and ordinary meaning, and co urts may look to legal and non

- legal dictionary definitions to determine such a meaning.” ) (citation omitted).

Based on the foregoing plain language and contextual analyses , the circuit court erred in granting the insurer’s summary judgment motion

based on the policy’s “water damage” exclusion.

A s for the policy’s “ wear and tea r” exclusion , the circuit court did not rule on that exclusion, so the homeowners’ argument that the “wear and tear” exclusion did not apply is not ripe for our review

. See Green v. City of Pensacola , 108 So. 2d 897, 899 (Fla. 1st DCA 1959) (“That matter was . . . directly passed upon by the trial court and is not a proper subject for review here.”).

Conclusion9 Based on the foregoing, we reverse the circuit court’s final order granting the insurer’s summary judgment motion on the homeowners’ breach of contract action based on the policy’s “water damage” exclusion

. We remand for the circuit court to reconsider th e insurer’s summary judgment motion, limited to the insurer’s argument that the policy’s “wear

and tear” exclusion barred the homeowners’ claim

, as well as the homeowners’ response that the policy’s “sudden and accidental escape of

water from a plumbing system” exception overcomes the “wear and tear”

exclusion. We also remand for further proceedings if necessary.

Reverse d and remanded with instructions

.

L EVINE
, C.J., and M AY
, J., concur.

* * *

Not final until dispositi on of timely filed motion for rehearing.