Damage caused by plumbing leakage that continued for one to two months, even though hidden and unknown to the insureds, was not “sudden” and, therefore, was excluded. ( Brown v. Mid-Century Insurance Company (2013) 215 Cal.App.4th 841)
Facts
Leroy and Terrie Brown began observing condensation forming on the windows of their three-story, split-level home. They also noticed moisture running from the windowsills down the walls. When they cleaned the windows, the condensation returned the next day. About a week later, the Browns began noticing mold forming around the inside of the windows and on the walls in the house.
About a month after the Browns first noticed the condensation, they discovered damp soil in the crawlspace. The Browns immediately shut off the water to the house, and they hired a plumber to find and fix the leak. After conducting an investigation, the plumber determined a copper hot water supply line, which was embedded in a concrete footing, was leaking. The pipe was heavily corroded, and had a hole that was approximately one-eighth of an inch in diameter.
After the plumber determined the source of the leak, the Browns contacted their insurer, Mid-Century Insurance Company. The policy insured the Browns’ interest in certain items of property and stated “[c]overage is dependent upon both the (1) cause of the loss or damage and (2) type of loss or damage.”
The policy listed certain types of loss or damage that were not covered under the policy, “however caused,” including “loss or damage consisting of, composed of or which is water damage.” The policy included an “extension of coverage” that provided “limited” water damage coverage “for direct physical loss or damage to covered property from direct contact with water, but only if the water results from … (4) a sudden and accidental discharge, eruption, overflow or release of water … (i) from within any portion of: (a) a plumbing system.”
The policy further stated as follows: “A sudden and accidental discharge, eruption, overflow or release of water does not include a constant or repeating gradual, intermittent or slow release of water, or the infiltration or presence of water over a period of time. We do not cover any water, or the presence of water, over a period of time from any constant or repeating gradual, intermittent or slow discharge, seepage, leakage, trickle, collecting infiltration, or overflow of water from any source … whether known or unknown to any insured.”
With regard to mold, the policy stated: “We do not insure loss or damage consisting of, composed of, or which is fungi. Further, we do not insure any remediation.” The policy also contained the following exclusion: “We do not insure loss or damage directly or indirectly caused by, arising out of or resulting from fungi or the discharge, dispersal, migration, release or escape of any fungi. Further, we do not insure any remediation ….” The policy defined fungi as “any part or form of fungus, fungi [or] mold ….”
Mid-Century denied the Browns’ claim, and the Browns filed suit for breach of contract and bad faith. Ultimately, Mid-Century filed a motion for summary judgment (or in the alternative for summary adjudication) on the Browns’ claims for breach of contract and bad faith.
In support of its motion, Mid-Century submitted the declaration of a plumbing expert, who concluded that the portion of the pipe that had been embedded in concrete had not been wrapped with a plastic protective sleeve, a violation of the building code. The plumber also concluded that the lack of the protective sleeve caused the corrosion, and that the corrosion initially caused a pinhole-sized opening that became progressively larger over time. Based on his observations and review of plumbing records, the Mid-Century’s plumbing expert concluded that the leakage had continued for at least five months before the leak was discovered and the water was turned off.
The Browns opposed Mid-Century’s motion and submitted a declaration from their own expert, who concluded that the initial leakage had occurred within a fraction of a second and, therefore, was “sudden.” However, even the Browns’ expert conceded that, after the leakage started, it continued for one to two months. The trial court granted Mid-Century’s motion for summary judgment, and the Browns appealed.
Holding
The Court of Appeal held that policy did not cover any of the damage, and thus affirmed the summary judgment in favor of Mid-Century. Irrespective of whether the initial leakage developed within a fraction of a second, and irrespective of whether the leakage was characterized as a “drip, spray, or stream,” it was undisputed that the leakage continued for at least one to two months. The Court further held that leakage that gradually occurred over such a long period of time cannot be deemed “sudden,” and that the term “a period of time” was not vague under these circumstances. Because the Browns’ breach of contract claim failed, their bad faith claim also failed.
Comment
This holding of this case makes it clear that plumbing leakage that persists over a sufficiently long period time is not “sudden.” In addition, the holding of this case elaborates upon the holding of Finn v. Continental Ins. Co. (1990) 218 Cal.App.3d 69, where the policy excluded damage caused by leakage and seepage that occurred over “weeks, months or years,” and where it was undisputed that a sewer line under a house had leaked for at least six months. The Finn court held, among other things, that the rupture or incomplete joining of a plumbing pipe is not a peril that is separate from the peril of leakage. Since these perils are not separate, the predominant cause doctrine has no application.
This case generally is consistent with the holding in Freedman v. State Farm Ins. Co. (2009) 173 Cal.App.4th 957, in which the court upheld the validity of an exclusion for “continuous or repeated seepage or leakage of water or steam from a … plumbing system….” In Freedman , the court rejected the insureds’ argument that the exclusion was vague because it did not specify how long a leak must last in order to be “continuous” or how many times the leak must stop and start in order to be “repeated.”