Opinion ID: 3008468
Heading Depth: 1
Heading Rank: 2

Heading: “We do cover ensuing loss caused by water damage .”

Text: The Fiess’s argue that we must disregard how this policy provision starts (“We do not cover loss caused by mold”) because of how it ends (“We do cover ensuing loss caused by water damage”). We disagree; it has again long been the rule that we must read all parts of a policy together, giving meaning to every sentence, clause, and word to avoid rendering any portion inoperative. [20] In Lambros v. Standard Fire Insurance Co. , [21] homeowners alleged underground water cracked the slab of their home. Like the policy here, their policy excluded losses due to cracked foundations, but also stated that this exclusion “shall not apply to ensuing loss caused by . . . water damage.” Justice Cadena writing for the Fourth Court of Civil Appeals found that the only reasonable construction of this clause was that it applied when an excluded risk was followed by an intervening occurrence that in turn caused an ensuing loss: To “ensue” means “to follow as a consequence or in chronological succession; to result, as an ensuing conclusion or effect.” An “ensuing loss,” then, is a loss which follows as a consequence of some preceding event or circumstance . . . . If we give to the language of the exception its ordinary meaning, we must conclude that an ensuing loss caused by water damage is a loss caused by water damage where the water damage itself is the result of a preceding cause. What is the preceding cause which gives to the exception the effect of taking the ensuing loss out of the reach of exception k [the foundation exception]? Again, the plain language of the exception compels the conclusion that the water damage must be a consequence, i.e., follow from or be the result of the types of damage enumerated in exception k. “Ensuing loss caused by water damage” refers to water damage which is the result , rather than the cause , of “settling, cracking, . . . of foundations . . .” [22] This Court refused the application for writ of error, thus giving the Lambros opinion the same force and effect as one of our own. [23] The part of the ensuing‑loss clause at issue in Lambros is indistinguishable from the part at issue here. The Department of Insurance asserts that the Lambros policy covered fewer water risks and the homeowners’ claim did not involve mold. But the relevant ensuing‑loss language has changed in no material respect; that Lambros involved a different house, different homeowners, and a different insurer does not make it distinguishable. If Lambros is still the law, then this clause too applies only to losses caused by an intervening cause (like water damage) that in turn follow from an exclusion listed in paragraph 1(f). The Fiesses and the Department make several arguments for construing ensuing‑loss clauses differently, but all would require reversing Lambros . That of course is not out of the question; our opinions are not like the law of the Medes and the Persians — unalterable once written. [24] But we are bound to consider the principles of stare decisis before taking such a step. Stare decisis has its greatest force in cases construing statutes, partly because our errors may be corrected by statutory amendments. [25] Although Lambros did not construe a statute, it was the next thing to it — a mandatory policy form promulgated by a state agency that private parties could not alter. If our policy interpretation in Lambros was wrong, it is strange that insurance regulators did nothing to change the policy for a quarter century. Accordingly, we decline the invitation to overrule it.