Mar Wars, or is A Chipped Tile Worth $81,000? (October Litigation Quarterly 2009)

Everyone who has homeowners insurance expects the insurer to pay when the home is damaged by a covered event, such as a hurricane, fire or plumbing leak.  The typical homeowner simply wants their home restored to its prior condition and wants the insurer to pay what is rightfully owed.  Over the past several years, however, there has been a new type of claim that results in extreme overreaching by the insureds, their public adjusters and their attorneys.

This is the typical case we have defended:  Mr. Insured was hanging a picture on the wall.  He accidentally dropped his five-pound hammer.  When the hammer hit the floor, it chipped or cracked a tile.1 Mr. Insured, through his public adjuster, makes a claim.  The claim is not, however, for a chipped or cracked tile.  The claim is for $80,000 worth of new tile throughout the entire house.2 Everywhere in the home that the tile runs continuously from room to room is claimed as requiring replacement.  The stated reason is that the one damaged tile cannot be replaced because a matching tile cannot be found.  The insureds never have left over tile from when the floor was installed and they cannot have a mismatched tile in their floor because they are entitled to matching tile.  The argument is that pursuant to Fla. Stat. § 626.9744, the claims settlement statute, an insurer must make reasonable repairs or replacement of matching items in adjoining areas.

In the past, insurers tried to bargain.  “We do not need to replace the entire floor because we can harvest a matching tile from a hidden area, such as under the refrigerator.”3 Eventually, however, the cases typically settle.

Like mold claims before them, these “dropped object” claims have fomented ever more claims with bigger and more extensive demands and payouts.  At least one insurer refused to give in to such obvious overreaching.  That insurer began denying the claims as falling under an exception to coverage.  The insurer, after fully investigating the claims, including having an engineer inspect the damage4, denied such claims as “marring” pursuant to the “wear and tear, marring, deterioration” exception to coverage.5 Naturally, the insureds and their public adjusters pushed back.

The resulting lawsuits allege either breach of contract for failure to pay a covered claim or demand appraisal of the claim pursuant to the policy’s appraisal provision.6 Almost invariably, the insurers make the economic decision to settle the cases or agree to appraisal to cut their losses and cut off the attorneys’ fee claims.

Enter Raul Maestri v. Florida Peninsula Insurance Company.7 Florida Peninsula Insurance Company had long been denying these tile damage claims as “marring” but usually ended up settling the claims or participating in appraisal (either voluntarily or involuntarily).  No one had yet come up with an argument against such claims until Mr. Maestri’s attorney filed his standard motion for summary judgment on the right to have the claim decided by appraisal.  It was then that Florida Peninsula authorized Cole, Scott & Kissane to go on the offensive.

One of the insured’s standard arguments is that in interpreting an insurance policy, the court must look at the words surrounding the term at issue.  “Marring” falls between “wear and tear” and “deterioration.”  The terms “wear and tear” and “deterioration” imply a long-term and gradual condition, thus, “marring” should be interpreted the same way.  In counter to this argument, it is first noted that, while these HO-3 policies are “all risk” policies, “all risk” does not mean “all loss.”8 In addition, the general rule is that a single policy provision should not be read in isolation and out of context but that the contract should be interpreted according to all of the terms set forth in the policy.9 The “wear and tear, marring, deterioration” exception is only one subparagraph of a larger exception to coverage that also includes occurrences that are sudden and unexpected, such as mechanical breakdown and discharge of pollutants.  Thus, the entire exception can be read as excepting both gradual and sudden occurrences.

The insured then argued that because the parties disagree as to the meaning of “marring,” the policy is ambiguous and must be resolved in favor of coverage.10 Simply saying a policy is ambiguous does not make it so.  Insurance contracts are interpreted like all other contracts—“according to the plain language of the policy except when a genuine inconsistency, uncertainty, or ambiguity in meaning remains after resort to the ordinary rules of construction.”11 Unambiguous policy provisions should be enforced according to their terms whether they are providing coverage or excluding coverage.12 The lack of a definition of a policy term does not, therefore, create an ambiguity.13 “The mere fact that an insurance contract is complex and requires some analysis to interpret it does not, by itself, render the agreement ambiguous.”14 “Mar,” in its ordinary definition, means “to inflict damage, especially disfiguring damage, on.”15 A chip or crack in a tile falls within that definition.  This type of case does not involve the problem of ambiguity, but simply whether the policy provision applies to the type of damage claimed.16

There are no cases in Florida that address the “wear and tear, marring, deterioration” provision.  Only one case involving homeowners insurance directly addresses “marring.”17 In Ehsan v. Ericson Agency, Inc., the insured owned a rental property.  A prospective tenant stole the keys and moved his family into the property.  Upon evicting the squatters, the insured discovered extensive damage throughout the house.  The insurer denied the claim, in part, as “marring.”  The court notes the context of the word as appearing between “wear and tear” and “deterioration” and that the term is, thus, meant to include marring of appearance caused by wear and tear or deterioration resulting from ordinary use over time.18

The facts of Ehsan involve more extraordinary damage than the claim of a dropped object chipping a tile during the ordinary and normal use of the insured’s premises over time.  Thus, while Ehsan interprets “marring” in a way that seems to go against excluding the chipped tile as marring, Ehsan and the chipped tile case are factually distinguishable.

In Gerawan Farming Partners, Inc. v. Westchester Surplus Lines Ins. Co., the insured’s farming operation made a claim against its policy when its fruit began exhibiting surface pitting some time after the packing process.19 The insurer denied the claim, in part, based on the marring exception.  The court adopted the definition of “mar” used by the court in Ehsan.20 The court thus found the pitting on the surface of the fruit to be marring under that definition.  The court then looked at the structure and organization of the exception.  The court concluded that all of the terms in the exclusionary paragraph must be related, but that the damage being claimed did not fall into the category of blemishing that occurs over time through the normal use of property.21

The crux of the argument against coverage for a damaged tile claim evolved into fitting the claim within the entire exception and not just focusing on “marring.”  The “wear and tear, marring, deterioration” provision applies to the insured property as a whole, not to individual components of the property.  When people go through their daily lives in their homes carrying things from one room to another, performing maintenance work, etc., objects are dropped, potentially inflicting damage.  This is part of the wear and tear of the home.  It also begs the question:  Does the insurance company owe an insured for a houseful of tile every time something heavy is dropped on one or a few tiles?  That cannot possibly be what was expected by the issuance of an insurance policy or intended by the parties when they entered into the insurance contract.22

Back, then, to Mr. Maestri and his claim for $81,000 in insurance benefits due to damage to one floor tile.  A hearing was held on Mr. Maestri’s motion for summary judgment on July 29, 2009, in front of Miami-Dade Circuit Court Judge Ronald Friedman.  Judge Friedman began by stating that he was “troubled” by such a large claim for such a small amount of damage.  After a rather abbreviated argument, Judge Friedman ruled that the insurance policy at issue was not intended to cover the claimed incident.23 Thus, the first win for the insurance industry and the first chink in the insureds’ armor.

It remains to be seen whether any ruling, for or against coverage, will be taken up on appeal.  If so, we may finally have our first Florida appellate decision that fairly and favorably interprets this exception to coverage.


1          Other such cases handled by Cole, Scott & Kissane include a dropped “scotch” glass, a dropped serving platter, a dropped fax machine and a wrench dropped after fixing a plumbing leak that resulted in a separate, paid claim.

2          Not only does the damage estimate include tile for almost every room in the home, but it includes repainting every room in which the tile is replaced, sometimes repainting the ceiling and occasionally replacing the kitchen cabinets.  One estimate from a public adjuster notes that the kitchen cabinets in the insured property are too old to withstand removal and resetting after installation of the new tile.

3          Although the insureds argue that this could not and would not work, it does not appear that this method of repair ever was actually attempted.

4          Every engineer’s report the author has read contains the same conclusion:  The damage is not inconsistent with the date and description of the occurrence.  Occasionally, the report will contain an added conclusion that the tile was improperly or poorly installed.  This, too, is excluded by the terms of the policy.

5          The standard HO-3 policy contains the following:

We insure against risk of direct loss to property described in Coverages A and B only if that loss is a physical loss to property.  We do not insure, however, for loss:

* * *

2.  Caused by:

* * *

e.  Any of the following:

(1)  Wear and tear, marring, deterioration

6          After arguing in favor of coverage in the appraisal cases, the insured then claims that coverage includes all continuous tile throughout the house.  This argument is based on Fla. Stat., §626.9744, the claims settlement statute, which requires an insurer to make reasonable repairs or replacement of matching items in adjoining areas.  The insurer may consider the cost of repairing or replacing the undamaged portions of the property, the degree of uniformity that can be achieved without that cost, the remaining useful life of the undamaged portion and other factors.

7          Case No. 08-43156 CA 02, Eleventh Judicial Circuit, Miami-Dade County, Florida.

8          Fayad v. Clarendon Nat’l Ins. Co., 899 So. 2d 1082, 1086 (Fla. 2005).

9          Swire Pac. Holdings, Inc. v. Zurich Ins. Co., 845 So. 2d 161, 166 (Fla. 2003); Fla. Stat., §627.419.

10        The insureds never actually explain what the ambiguity is or cite any law that holds this provision is ambiguous.  They seem to rely on the fact that they say the damage is covered and the insurer says it is not for support of the argument that this, then, must be ambiguous.

11        Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528, 532 (Fla. 2005) (citation omitted); Fayad v. Clarendon Nat’l Ins. Co., 899 So. 2d 1082, 1086 (Fla. 2005); Swire Pac. Holdings, Inc. v. Zurich Ins. Co., 845 So. 2d 161, 712 (Fla. 2003).  One must also look to the intent of the parties at the time the contract was made.  U.S. Fire Ins. Co. v. J.S.U.B., Inc., 979 So. 2d 871, 881 (Fla. 2007).

12        Taurus Holdings, Inc., 913 So. 2d at 532.

13        State Farm Mut. Auto. Ins. Co. v. Mashburn, 2009 15 So. 3d 701, 705 (Fla. 1st DCA 2009).

14        Mashburn, 15 So. 3d at 704.

15        American Heritage Dictionary (on-line ed.).

16        There are two cases that find the entire exception to be unambiguous.  See Brodkin v. State Farm Fire & Cas. Co., 217 Cal. App. 3d 210, 218 (Cal. App. 1989); Ehsan v. Ericson Agency, Inc., 2003 WL 21716345, n. 18 (Conn. Super. 2003) (“marring” defined but not found to be ambiguous).

17        Ehsan v. Ericson Agency, Inc., 2003 WL 21716345 (Conn. Super. 2003).  Gerawan Farming Partners, Inc. v. Westchester Surplus Lines Ins. Co., 2008 WL 80711 (E.D. Cal. 2008), also involves interpretation of “marring” but in the context of a commercial property policy.

18        Ehsan v. Ericson Agency, Inc., 2003 WL 21716345, n. 18 (Conn. Super. 2003).

19        2008 WL 80711 (E.D. Cal. 2008).

20        The court defined “mar” as a disfiguring mark or blemish and defined a blemish as an imperfection that seriously impairs appearance.  Gerawan Farming Partners, Inc. v. Westchester Surplus Lines Ins. Co., 2008 WL 80711, *14 (E.D. Cal. 2008).

21        There is at least one case that states that “marring” can be the result of a sudden occurrence.  See Gibson v. Farmers Ins. Co. of Wash., 2007 WL 1180999 (Wash. App. 2007) (discussing “marring” as part of a similar exception to coverage in dicta).

22        U.S. Fire Ins. Co. v. J.S.U.B., Inc., 979 So. 2d 871, 881 (Fla. 2007).

23        After much discussion, the parties could not agree on the language of the order. Judge Friedman chose to enter the order proposed by Cole, Scott & Kissane. Currently the insured’s Motion for Rehearing is pending before the court.

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