Case Name: M AND M CORPORATION OF SOUTH CAROLINA, Plaintiff, v. AUTO-OWNERS INSURANCE COMPANY, Defendant
Court: Supreme Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 2010-10-11
Citations: 390 S.C. 255
Docket Number: No. 26883
Parties: M AND M CORPORATION OF SOUTH CAROLINA, Plaintiff, v. AUTO-OWNERS INSURANCE COMPANY, Defendant.
Judges: BEATTY and KITTREDGE, JJ., concur.
Reporter: South Carolina Reports
Volume: 390
Pages: 255–267

Head Matter:
701 S.E.2d 33
M AND M CORPORATION OF SOUTH CAROLINA, Plaintiff, v. AUTO-OWNERS INSURANCE COMPANY, Defendant.
No. 26883.
Supreme Court of South Carolina.
Heard April 8, 2010.
Decided Oct. 11, 2010.
Rehearing Denied Nov. 17, 2010.
Clinch Heyward Belser, Jr., H. Freeman Belser and Michael J. Polk, all of Belser & Belser, of Columbia, for Plaintiff.
John T. Lay, Jr. and A. Johnston Cox, of Ellis Lawhorne & Sims, of Columbia, for Defendant.

Opinion:
Chief Justice TOAL.
The United States District Court for the District of South Carolina has certified to this Court three questions arising from a dispute concerning an all-risk Commercial Property Policy of insurance (the Policy). These questions concern the classification of water, for purposes of the insurance policy's coverage, that has been collected, concentrated, and cast onto adjoining property.
Facts/Procedural Background
M & M Corporation (Plaintiff) owns a hotel in Blythe-wood, South Carolina. In August 2006, the South Carolina Department of Transportation (SCDOT) was widening and improving Blythewood Road, a process that included installation of a new underground stormwater drainage system. Before installation was complete, approximately four inches of rain fell on Blythewood in one day. Plaintiffs hotel suffered significant water damage as a result of the rainwater exiting the incomplete drainage system.
The incomplete stormwater drainage system comprised 1,600 feet of pipes and collected water from an area of approximately 15.9 acres, terminating at an exposed, above-ground thirty-inch pipe fifty feet from the edge of the hotel property line and one hundred fifty feet from Plaintiffs hotel building. The total volume of water discharged from the pipe on the day at issue was over 830,000 gallons at a rate of 6.3 feet per second. The expelled water pooled in the hotel parking lot, reaching sufficient depth to enter the hotel building and cause damage to the property.
Plaintiff filed an action against Auto-Owners Insurance Company (Defendant), seeking to recover for the water damage under the Policy. Defendant denied coverage, citing the surface water and flood exclusions contained in the Policy. The parties filed cross motions for summary judgment. The district court found resolution turns on the definitions of "surface water" and "flood" in the context of the Policy, and certified questions to this Court.
Certified Questions
I. Under an all-risk Commercial Property Policy of insurance, does "surface water" encompass rainwater collected and channeled in a stormwater collection system?
II. If the answer to Question I is no, can such non-surface water reacquire its classification as surface water upon exit from the stormwater collection system and, if so, under what circumstances?
III. Under an all-risk Commercial Property Policy of insurance, does "flood water" encompass water discharged from a stormwater collection system in concentrated form, pooled, and that thereafter enters a building?
Law/Analysis
Defendant argues the water at issue is properly characterized as surface water and flood water, thus it properly denied insurance coverage because damage resulting from both classifications of water is excluded under the Policy. We disagree and find the water expelled from the pipe was not surface water or flood water. Accordingly, we answer all certified questions in the negative.
The terms "surface water" and "flood water" are not defined in the Policy, so we must determine whether rainwater that has been collected, concentrated, and cast upon another's property is considered surface water or flood water for purposes of insurance coverage. Insurance policies are subject to the general rules of contract construction. American Credit of Sumter, Inc. v. Nationwide Mutual Ins. Co., 378 S.C. 623, 628, 663 S.E.2d 492, 495 (2008). Courts interpret insurance policy language in accordance with its plain, ordinary, and popular meaning, except with technical language or where the context requires another meaning. See id; Blakeley v. Rabon, 266 S.C. 68, 72, 221 S.E.2d 767, 769 (1976). Policies are construed in favor of coverage, and exclusions in an insurance policy are construed against the insurer. Buddin v. Nationwide Mutual Ins. Co., 250 S.C. 332, 337, 157 S.E.2d 633, 635 (1967).
The insurance policy in question has an exclusion for water damage that says, in pertinent part, damage resulting from "[f]lood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not" is not covered under the policy.
I. Is the water "surface water?"
Plaintiff asserts the water was not surface water when it was channeled into a stormwater collection system and cast upon its property. We agree.
South Carolina law defines surface water as waters of a casual and vagrant character, which ooze through the soil or diffuse or squander themselves over the surface, following no definite course. They are waters which, though customarily and naturally flowing in a known direction and course, have nevertheless no banks or channels in the soil, and include waters which are diffused over the surface of the ground, and which are derived from rains and melting snows....
Lawton v. S. Bound R.R. Co., 61 S.C. 548, 552, 39 S.E. 752, 753 (1901). We need look no further to answer the question before us.
While the water at issue was surface water before it was collected in the stormwater system, it then was concentrated and cast onto Plaintiffs property. Once surface water is deliberately contained, concentrated, and cast onto an adjoining landowner's property, it is no longer naturally flowing, diffuse water. Water spewing in an unnatural concentration from a stormwater drainage system lacks the identifiable characteristics of surface water the court approved in Lawton.
The water intruding upon Plaintiffs property was not owing to fortuitous natural causes, but instead to the deliberate actions of another. We find that naturally falling water that has been intentionally concentrated and cast upon the insured's property is not surface water for the purposes of the Policy. Accordingly, we answer the first certified question no; the water at issue is not surface water.
II. If no, does the water become "surface water" after exiting the collection system?
We also answer the second certified question no; the water does not become surface water again for the purposes of the policy once it is discharged from the pipe. The water only reached Plaintiffs property in such a harmful concentration because of the deliberate containment and casting, not on account of a natural flow. Thus, the water does not regain surface water classification for the purposes of the policy once it has been expelled from the pipe.
III. Is the water "flood water?"
As to the third certified question, whether the water at issue is "flood water," we also answer no. Defendant asserts this Court should define "flood water" as a "great flow of water over what is usually dry land," thus qualifying the water at issue as flood water and excluding the damage from coverage. While South Carolina courts have not defined "flood water," Defendant's suggested definition is far too broad. Flood waters are those waters that breach their containment, either as a result of a natural phenomenon or a failure in a man-made system, such as a levee or a dam. See Milbert v. Carl Carbon, Inc. 89 Idaho 471, 406 P.2d 113, 117 (1965) ("Flood waters are waters which escape, because of their height, from the confinement of a stream and overflow adjoining territory; implicit in the definition is the element of abnormality."). In either case, there is an element of fortuitousness. See Long Motor Lines v. Home Fire & Marine Ins. Co. of Cal., 220 S.C. 335, 341, 67 S.E.2d 512, 515 (1951) (clarifying that in an insurance policy that defined "flood" as "the rising of streams or navigable waters," "rising" necessarily connoted an abnormal rising of the waters). We hold that the water in the present case is not flood water because it did not breach containment, but instead it was deliberately channeled and cast upon Plaintiffs land.
Conclusion
Therefore, we find the water at issue is neither surface water nor flood water for the purposes of the Policy, and answer all three certified questions in the negative.
BEATTY and KITTREDGE, JJ., concur.
PLEICONES, J., dissenting in a separate opinion in which HEARN, J., concurs.
. The common enemy rule does not bear on this case as it currently stands before this Court. While its theories are instructive, the rule itself need not be analyzed to determine the instant issue. The common enemy rule does not define what surface water is, but rather prescribes how landowners may deal with the surface water on their lands. See William T. Toal, Surface Water in South Carolina, 23 S.C. L.Rev. 82, 88 (1971) (explaining surface water law in South Carolina). The common enemy rule addresses potential tort liability for obstructing and diverting the flow of surface water. Here, we are concerned with the definition of surface water in the context of a contract for insurance coverage.