Opinion ID: 48759
Heading Depth: 4
Heading Rank: 1

Heading: Mold Damage vs. Water Damage

Text: Allstate suggests that the Texas Supreme Court’s recent opinion in Fiess v. State Farm Lloyds5 “is dispositive of the claims asserted by the Watsons in the [instant] suit.” In Fiess, the Texas Supreme Court answered the following question certified to it by this court: Does the ensuing loss provision contained in Section I-Exclusions, part 1(f) of the Homeowners Form B (HO-B) insurance policy as prescribed by the Texas Department of Insurance effective July 8, 1992 (Revised January 1, 1996), when read in conjunction with the remainder of the policy, provide coverage for mold contamination caused by water damage that is otherwise covered under the policy?6 The Texas Supreme Court ruled that the ensuing loss provision of that form policy does not provide coverage for mold contamination resulting from water damage otherwise covered under the policy. In this appeal, the Watsons concede that if we should remand their case to the district court, they will not be able to recover the costs of remediating the mold contamination that resulted from 3 Bank of Louisiana v. Aetna U.S. Healthcare Inc., 468 F.3d 237, 241 (5th Cir. 2006). 4 Fiess, 392 F.3d at 808 (citation omitted). 5 202 S.W.3d 744 (Tex. 2006). 6 Fiess, 392 F.3d at 811-12. 6 water damage caused by the roof or plumbing leaks at issue in this case. They maintain, however, that they would still be entitled to recover for the water damage itself. To this extent, the Watsons are correct. Allstate characterizes all of the physical damage at issue in this case as “mold damages,” and the record does reflect that mold remediation comprises a significant, if not the predominant, portion of the repair costs that the Watsons face. It is beyond dispute, however, that Allstate denied coverage for both the mold and the water damage associated with the roof and under-slab leaks. For this reason, the Texas Supreme Court’s decision in Fiess would affect only the quantum of the Watsons’ recovery in the district court if they are successful on appeal, and does not dispose of their action entirely as Allstate contends.