Opinion ID: 874453
Heading Depth: 2
Heading Rank: 1

Heading: The Outbuildings exclusionary provision is ambiguous.

Text: Both parties agree that the detached garage is a separate structure within the meaning of the contract. However, Farmers denied coverage for the fire damage to the garage because it read the Outbuildings exclusionary provision to include the detached garage. Arreguin argues the Outbuildings exclusion is ambiguous and thus cannot be used to deny him coverage for the fire damage. When we determine whether a policy is ambiguous we ask whether the policy `is reasonably subject to conflicting interpretation.' Talbot, 133 Idaho at 432, 987 P.2d at 1047 (quoting Mut. of Enumclaw v. Box, 127 Idaho 851, 853, 908 P.2d 153, 155 (1995) (quoting City of Boise v. Planet Ins. Co., 126 Idaho 51, 55, 878 P.2d 750, 754 (1994))). A provision that seeks to exclude the insurer's coverage must be strictly construed in favor of the insured. Moss v. Mid-America Fire & Marine Ins. Co., 103 Idaho 298, 300, 647 P.2d 754, 756 (1982). The burden is on the insurer to use clear and precise language if it wishes to restrict the scope of its coverage. Id. The insurance contract provides: Coverage B  Separate Structures We cover other structures on the residence premises separated from the dwelling, or connected to the dwelling by only a fence, utility line, sidewalk, driveway, patio or similar connection. Wall-to-wall carpeting attached to the structure is part of the structure. We do not cover land or the value of land, including land on which the separate structure is located or the cost to restore, replace, repair or rebuild land. If a covered loss causes damage to a separate structure and to the land on the residence premises, we do not cover any increased cost to repair or rebuild the separate structure because of damage to the land. We do not cover separate structures which are intended for use in business or which are actually used in whole or in part for business purposes.    RESTRICTIVE ENDORSEMENT We agree not to cancel this policy for 30 days from the date shown above. You and we agree that this policy does not cover loss by/to: 1. ALL OUTBUILDINGS. . . . This endorsement is part of your policy. It supersedes and controls anything to the contrary. It is otherwise subject to all other terms of the policy. (Emphasis in original). An insurance policy is ambiguous when it is reasonably subject to differing interpretations. Armstrong v. Farmers Ins. Co. of Idaho, 143 Idaho 135, 137, 139 P.3d 737, 739 (2006). Outbuildings is not defined anywhere in the contract. Here outbuildings is reasonably subject to at least two differing interpretations and thus is ambiguous. [1] Its definition may reasonably encompass all structures on the property, including all the described structures under separate structures as well as attached structures to the dwelling. [2] Another reasonable definition might encompass only those structures within the definition of separate structures. Farmers cites various outbuilding definitions in an attempt to show that all definitions of outbuildings include a detached garage. These various definitions demonstrate that outbuildings is not necessarily subject to a single reasonable definition. For instance, one source defines outbuilding to include buildings both adjoining to and separate from the dwelling, and a different source defines outbuilding only as a detached building. Furthermore, during oral argument, Farmers was unable to say whether the pump house on Arreguin's property would qualify as an outbuilding. An additional indication of ambiguity in this particular contract is that it defines many terms such as: aircraft, occurrence, residence premises, and water, but does not define outbuilding anywhere in the contract. See Moss, 103 Idaho at 301, 647 P.2d at 757 (noting that an indication of vagueness and ambiguity of the undefined terms in question was that more than forty terms were defined in the policy and thus address questions the insured might have about coverage). Furthermore, a provision excluding coverage is strictly construed in favor of the insured and the insurer has the burden to use clear and precise language if it is restricting the scope of its coverage. Moss, 103 Idaho at 300, 647 P.2d at 756. [E]xclusions not stated with specificity will not be presumed or inferred. Clark, 138 Idaho at 541, 66 P.3d at 245. If Farmers intended the Outbuildings provision to exclude coverage for the detached garage it could have simply used the word garage or similar clear and precise language to that used when it defined the separate structures covered under the contract. Additionally, the fact that the policy's other exclusions use clear and precise language and indicate to which part of the policy coverage they correspond, further bolsters our conclusion that the Outbuildings exclusion is ambiguous. For example, the Sewer and Drain Water Damage Coverage Endorsement specifically articulates that it applies to the coverage extended under: Coverage A  Dwelling, Coverage B  Separate Structures, and Coverage C  Personal Property. Contrarily, the Outbuildings provision lacks a reference to any portion of the existing contract and instead it is left to the imagination of the insured as to what the exclusion applies to with only the aid of the additional unspecific language that the exclusion supersedes and controls anything to the contrary. We are compelled to strictly construe the exclusionary provision in favor of the insured and the insurance company bears the burden to use clear and precise language when restricting the scope of coverage. Moss, 103 Idaho at 300, 647 P.2d at 756. It is unclear whether outbuildings covers the buildings defined in separate structures or the attached structures defined under dwelling. Unlike the other clear and detailed exclusionary provisions, the Outbuildings provision fails to reference any other part of the contract. Therefore, because Farmers has not met its burden to use clear and precise language in this particular exclusionary provision, we hold the Outbuildings exclusionary provision is ambiguous and reverse the district court's grant of summary judgment to Farmers.