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Iler v. RVOS Farm Mutual Insurance Co.

Court of Appeals of Texas, Ninth District, Beaumont

November 16, 2017

JAMES C. ILER AND LINDA ILER, Appellants
v.
RVOS FARM MUTUAL INSURANCE COMPANY, Appellee

          Submitted on March 23, 2017

         On Appeal from the 75th District Court Liberty County, Texas Trial Cause No. CV0902090

          Before McKeithen, C.J., Kreger and Johnson, JJ.

          MEMORANDUM OPINION

          LEANNE JOHNSON JUSTICE

         James and Linda Iler ("the Ilers" or "Appellants") appeal the trial court's take-nothing judgment pursuant to the jury's verdict in favor of RVOS Farm Mutual Insurance Company ("RVOS"). On appeal, the Ilers argue that the trial court erred in allowing the jury to interpret an exclusionary clause in an insurance policy and that the trial court erred in denying Appellants' motion for judgment notwithstanding the verdict because they conclusively established their damages and attorney's fees. Alternatively, the Ilers argue that charge error requires a new trial.

         Background

         After RVOS denied their claim for damages allegedly caused by Hurricane Ike in 2008, the Ilers sued RVOS, with whom the Ilers contracted for property insurance for their home in Liberty. In their suit, the Ilers alleged claims for breach of contract, breach of duty of good faith and fair dealing, and violations of certain sections of the Texas Insurance Code.[1] On September 24, 2015, the Ilers filed Plaintiffs' Motion for Construction of Provision of Contract, requesting a ruling from the trial court "construing the language of an exception to an exclusion in the insurance contract that forms the basis of this suit so that the court's interpretation can be submitted to the jury in the charge." The relevant policy exclusion provided as follows:

PART 8 "Losses Not Covered"
1. The following exclusions apply to loss to property described under Part 3 - PROPERTY COVERAGE, but they do not apply to an ensuing loss caused by fire, smoke or explosion. . . . .
c. We do not cover loss caused by windstorm, hurricane or hail to:
. . . .
(4) the interior of a covered building or to personal property contained in a covered building unless direct force of wind or hail makes an opening in a roof or wall and rain enters through this opening and causes the damage.

         The Ilers further requested that the trial court "find that the words 'wind makes an opening in a wall' include wind-created separations between a door and a doorframe, between two doors, and between a window and a window frame[.]" RVOS filed a response to the motion and argued that neither the definition of wall nor the definition of door in the Merriam-Webster dictionary supports the Ilers' contention that a door is considered part of a wall, neither definition references the other, and the definition of wall does not state that it includes windows and doorways as part of the wall. According to RVOS, "[u]sing the ordinary common meanings of words, had coverage been intended, the words 'windows' and 'doors' would have been included." On October 7, 2015, the Ilers filed Plaintiffs' Amended Motion for Construction of Provision of Contract stating the following:

Plaintiffs seek a ruling from the court construing the language of an exception to an exclusion in the insurance contract that forms the basis of this suit so that the court's interpretation can be submitted to the jury in the charge.[] Plaintiffs seek a holding that the language is unambiguous and an interpretation of the language, and alternatively seek a holding that the language is ambiguous and an interpretation of the language. Specifically, Plaintiffs request the court find that the words of the exception cover a situation in which wind creates a separation between a door and its frame or threshold, between two doors, and between a window and its frame.

         The Ilers argued that "[a]s only the interpretation of an exclusion is in dispute, Plaintiffs contend there is no ambiguity in the contract and the interpretation of the exclusion is a matter of law for the court." According to the Ilers, (1) the ordinary and generally-accepted meaning of the word "opening" includes a space created when two things that are meant to go together are separated, and that any separation of a door and its frame and threshold large enough for rain to pass through is an opening; and (2) the ordinary and generally-accepted meaning of the words "opening in a wall" would include doorways and window openings, and if the wind forces a separation between a door and its frame or threshold large enough for rain to get through then the wind makes an opening in a wall.

         At a pre-trial hearing, the trial court found, based on the four corners of the contract, that the exclusion was not ambiguous, there was no conflict in the law, and that any conflict in the evidence would be for the jury to decide. The trial court further explained:

I denied [RVOS's] motion for summary judgment because I wasn't prepared to say as a matter of law that the facts and events of this case do not fall within coverage.
This jury may decide by [sic] hurricane force wind blowing through the weather stripping created a hole or a gap in the wall. I think that's a point of evidence, and it's a point of argument that you're going to make towards this jury for them to find or not find.
They may decide __ I don't see that that's a question of law.

         The trial court severed the extra-contractual claims from the breach of contract claim, and the breach of contract claim was tried to the jury.

         Trial Testimony and Post-Judgment Pleadings

         Linda Iler (Linda) testified she and her family moved into their newly-built home in Liberty County in March 2007. The Ilers purchased an insurance policy from an insurance agent in Dayton, Texas. At trial, Linda identified the "The Star Policy[, ]" the insurance policy through RVOS that the Ilers purchased. Linda testified that she was aware that she and her husband were required to pay premiums under the policy, and that they did not have to pay any premium for excluded items. Linda also testified that she and her husband were aware that Part 8 of the policy was the exclusion portion of the policy, and that they were aware of that portion at the time they bought the policy.

         About a year and a half after moving into the home, Hurricane Ike made landfall. According to Linda, she was present at the home when the hurricane made landfall and she became concerned that the French doors in the back of her house that opened inward into the house might be pushed open by the winds. She testified she pushed a recliner chair against the doors so "that for some reason if the doors did give that would maybe stop the doors from opening completely." Linda testified that someone at the radio station reported to her that the winds had been blowing 120 miles per hour during the hurricane.

         According to Linda, she noticed water on the floor in front of the French doors the morning after the worst of the storm had passed. She testified she used three or four bath towels to clean up the water. Linda explained at trial that once the winds died down later that morning she walked the exterior of the house and did not see any flood water or watermarks on the outside of her home. She testified that on the lot they owned next to their house she noticed the tops of trees were gone and branches were lying on the ground, and that one tree had been knocked down. According to Linda, there were no watermarks on the interior walls of her home, she did not notice any leaks in the ceiling or broken windows, she noticed that the weather stripping that was on the French doors prior to Hurricane Ike now was gone, and she did not see anything that would lead her to believe that a flood caused water to get on the floor. Linda testified that the windows and doors of her home were closed during the storm and that she did not see a hole in her home's roof or wall.

         Linda testified that for about ten days after Hurricane Ike the family stayed at Linda's mother-in-law's home because her mother-in-law had a generator big enough to run the air conditioning. According to Linda, during that ten-day period she made a visit to her home and noticed that the wood flooring where the water had been had started to buckle, and that over time there was damage to the floor under beds that were up against windows in other rooms.

         Linda explained at trial that she made an insurance claim with RVOS, two adjusters inspected her home, and she told the adjusters that the weather stripping around the doors was gone and that she thought the wind and the rain had caused the floor damage. Linda testified about a letter dated October 16, 2008, which was admitted into evidence at trial. According to Linda, RVOS stated in the letter that the Ilers' insurance policy does not include flood coverage and that the claim was denied because Part 8 of their insurance policy excludes "loss caused by or resulting from flood, surface water, waves, tidal water or tidal waves, overflow of streams or other bodies of water or spray from any of these whether or not driven by wind." Linda further testified that she received a letter from RVOS dated April 27, 2009, stating that after Alamo Claims Service inspected the damage, RVOS was "unable to make an allowance for the damage or further investigative testing as the damage was not caused by the named peril in [the Ilers'] policy." The April letter was also admitted into evidence. Linda explained to the jury that she hired the company that built the house to repair the flooring, and the flooring was repaired. According to Linda, at the time of trial she and her husband still had not paid the company for the repairs.

         Linda further testified as follows:

Q. Mrs. Iler, do you know what a doorway is?
. . . .
A. Oh, a doorway, yes, of course.
Q. Is a doorway an opening in a wall?
A. Yes, it is.
Q. If you attached a door to a doorway but you leave the door open, is there an opening in the wall?
A. Yes.
Q. If you close the door, is there an opening in the wall?
A. No.
. . . .
Q. . . . . If the wind blew very hard against the door and if the wind caused the door to bow or separate or otherwise create space between the door itself and the door frame or the threshold or between the doors and that separation was big enough for rain to go through, is a space between a door and its frame or between two doors or between a door and its threshold, is a space an opening?
A. Yes.
Q. So, would you say that if the wind blew hard enough to make a separation between two doors, around the door, under the door, it has made an opening?
A. Yes.
. . . .
Q. Can a wall have a doorway in it?
A. Yes.
Q. Can a wall have a window opening ...

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