Fourth DCA Reverses Verdict Entered in Favor of Insurer and Orders New Trial Regarding Constant and Repeated Seepage Exclusion

By Zachary D. Sonenblum

In Feldman v. Citizens Prop. Ins. Corp., the Fourth DCA reversed the verdict entered in favor of the insurer and ordered a new trial regarding the policy’s “constant or repeated seepage or leakage” exclusion.

On July 12, 2016, the insured observed that a piece of the living room ceiling fell on the floor and immediately contacted a water remediation company, as well as a handyman to perform repairs. Citizens denied coverage for the claim based on the policy’s “constant or repeated seepage or leakage” exclusion, which provides in pertinent part:

GENERAL EXCLUSIONS: We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.
    . . .

14. Constant or repeated seepage or leakage of water or stream, or the presence or condensation of humidity, moisture or vapor, which occurs over a period of weeks, months or years.

At trial, the insured’s expert testified the damage was the result of a one-time large-volume water event, and the insurer’s expert testified it was the result of a long-term water leak. At the close of evidence, the insured moved for entry of directed verdict that they met their initial burden to prove loss during the policy period, which was denied. The Court also denied both 1) the insured’s request for special jury instruction regarding the constant or repeated seepage provision and 2) the insured’s motion for a new trial.

The Fourth DCA found that the trial court erred when it denied the insured’s motion for directed verdict on the insured’s initial proof because the insured satisfied both requirements—1) no conflicting evidence was presented and 2) “there is no view of the evidence that would support a verdict for the insurer on when the ceiling collapse occurred. It is undisputed that physical loss occurred on the insured’s property during the policy period.”

Turning to the “constant or repeated seepage” provision, the Court found that the policy provision was factually distinguishable from prior caselaw in Hicks v. American Integrity Ins. Co., where the policy stated “period of fourteen days or more.” Instead, here, the policy states “over a period of weeks, months or years.” Accordingly, the appellate court affirmed the trial court’s refusal to give the insured’s requested jury instruction that the insured was “entitled to recover for damages caused during the first 13 days of the constant or repeated seepage or leakage”.

The Fourth DCA reversed the jury verdict and remanded the case back to the trial court for a jury trial on the remaining issue of whether the exclusion for long term leakage and seepage precluded coverage.