Court Opinion

ID: 9477002
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:10:57.357387+00
Date Added: 2024-06-11T17:45:37.466819
License: Public Domain

GRANT, Senior District Judge,
dissenting:
I respectfully disagree with the majority’s conclusion that there can be only one reasonable construction of the language of the flood insurance policy at issue.
The evidence showed that this flood of December 1982 was one of the highest in recent times, that the water level remained high for an extended period of time, and that there was current and wave activity against the house. The water inundated the basement and rose into the living area, damaging personal property. The current or waves knocked down a wooden wall. After the water subsided, the walls of the house cracked and separated from the floor; the doors and windows became unaligned, the floors uneven, the roofline crooked. Yet the insurers assumed liability for only the damage to the contents of the house and the wooden wall. They contended that the structural damage was *660caused, not by the flood, but by settlement of the structure’s footing.
The majority states that it agrees with the district court that the “settlement which caused the damage to the house is a type of earth movement which is excluded from the coverage of the insurance policy” because it is not a mudslide or erosion. It is this narrow reading of the “earth movement” exception with which I disagree.
The “earth movement” exclusion of the policy states that the policy will not cover peril “by theft or by fire, windstorm, explosion, earthquake, landslide or any other earth movement except such mudslide or erosion as is covered under the peril of flood.” The term “soil settlement” is not used either in the insurance policy itself or in the federal flood insurance legislation. The question is: If “settlement” is a type of earth movement, as the district court and majority hold, is it more like those perils that are excluded under the policy, or more like “such mudslide or erosion as is covered under the peril of flood”? Keeping in mind that “any ambiguities in an insurance policy should be resolved against the insurance company,” Myers v. Merrimack Mutual Fire Ins. Co., 788 F.2d 468, 470 (7th Cir.1986), we turn for guidance to Congressional explanations of its intent in defining “flood,” “erosion,” and “mudslide.”
The legislative history of the Flood Disaster Protection Act of 1973, P.L. 93-234, which revised the 1968 Act by expanding the national flood insurance program, elucidates in “Definition of ‘Flood’ ” and “Extension of Flood Insurance Program to Cover Losses from Erosion” the extent of coverage provided for damage by flood, mudslide, or erosion. S.Rep. No. 583, 93rd Cong. 1st Sess., reprinted in 1973 U.S.Code Cong. & Ad.News 3217, 3228-29. It makes clear that Congress did not intend to provide coverage for damage due to gradual earth movement, the shifting of unsubstantial fill under buildings, or the normal, continuous and gradual wearing away of land by waves. However, it did intend that the effects of unforeseeable and sudden floods, mudflows and abnormal erosion situations be covered. Furthermore, where the mudslide or flood is “preceded or accompanied by a slow or gradual movement of the earth, sometimes caused or aggravated by the improper use of fill in the construction of new subdivisions, which had already endangered the insured property, and would ultimately result in its destruction,” the FIA would be required to pay for those losses if the mudflow or flood proximately caused the damage. Congress explained the amendment clearly:
The amendment added by the committee is intended to make clear that, just as FIA would be required to pay a sudden flood loss that occurred to an insured property while a gradual landslide was in progress, so too it is expected to pay for mudflow losses that occur unexpectedly while a landslide is in progress, so long as the mudflow and not the landslide is the proximate cause, or sine qua non, without which the damage claimed would not have occurred.
Id. at 3229. The evidence in this case clearly showed that the structural damage to appellant’s home would not have occurred without the flood.
After considering the legislative history of the definition of “flood,” I can only conclude that there is not just one reasonable construction of the instant insurance policy. The policy excludes “any other earth movement except suck mudslide or erosion as is covered under the peril of flood.” Congress intended coverage for the effects of unforeseeable and sudden floods, mudflows, and erosions, including gradual earth movements that preceded or accompanied those occurrences, as long as the peril was the proximate cause “without which the damage claimed would not have occurred.” In Mr. Sodowski’s circumstances, the flood was the sine qua non of his total losses; damage to the structure of his home cannot be separated from the immediate damage that occurred from the flood waters. I am convinced that the insurance policy can be construed reasonably and correctly to cover Mr. Sodowski’s losses.
I further dissent from the majority’s decision to join the holding in West v. Harris, 573 F.2d 873 (5th Cir.1978), cert. denied, 440 U.S. 946, 99 S.Ct. 1424, 59 L.Ed.2d 635 (1979) rather than Quesada v. Director, Federal Emergency Management Agency, *661753 F.2d 1011 (11th Cir.1985). The circumstances of the case before us are more similar to those in Quesada, which involved damage to a house built on a sand base. The ground was saturated during a storm; after the storm, as the water receded, the saturated sand compacted and settled. The foundation, no longer supported, sank down to the lowered level, and as a result the floors and walls of the house cracked.
In West, the holding with which this court aligns itself, the two damaged houses were built on unstable ground, swampland. Furthermore, the city’s rapid draining of the canals next to appellants’ homes exacerbated the damage to the structures. No such intervening cause was found in the facts of Quesada. The district court opinion, Quesada v. Director, Federal Emergency Mgmt. Agency, 577 F.Supp. 695 (S.D.Fla.1983) fully distinguished the “materially different set of circumstances” found in West from the situation of the Quesadas.
In the case at bar, unlike those of the Wests and the Daigles, the Plaintiffs’ home was built not on reclaimed swampland, but over sand — the customary fill used in housing foundations in Dade County. There was no evidence adduced that sand expands and contracts the way the reclaimed swampland, filled in with a mixture of humus and clay, did in the West cases. Similarly, no evidence was introduced in support of the notion that sand would cause the kind of “heaving and settling” with moisture changes that occurred in West. The Quesadas had never found it necessary to purchase fill for the types of “potholes” found on the land of the Daigles and Wests. Additionally, there was no immediate drainage, and no immediate drying of the land surrounding the Quesadas’ residence, as occurred when the drainage canals in West were quickly emptied. Finally, although the water never entered the Quesadas’ house directly, there was evidence adduced at trial that water had come all the way up to the house and under it into its foundation.
577 F.Supp. at 700.
“The heart” of West, according to the Quesada district court, was that the flood insurance policy did not cover “damage which was ‘the result of earth movement,’ where such movement would have occurred over time regardless of the flooding, or where the movement was in some sense uniquely attributable to the particular structure of the insured’s house as compared with others in the locality.” Id. at 701. On the evidence in Quesada, the court found that “it would be unreasonable ... to find that anything other than the flood caused the damage to plaintiffs’ house.” Id. Therefore, the district court refused to be bound by the Fifth Circuit decision with its “materially distinguishable circumstances” that made it inapposite in Quesada and that, in our opinion, distinguish it from the case before us. In accord, the Eleventh Circuit reasonably concluded that the compacting of the soil under the foundation of the house “would not have occurred but for the flooding and did in fact occur simultaneously therewith.” 753 F.2d at 1014. That conclusion is appropriate in this case.
Therefore, I would reverse the decision of the district court and remand it for a determination of the damages, including prejudgment interest at the rate allowed under Illinois law.