Mason Drug Co. v. Harris

PATRICK E. HIGGINBOTHAM, District Judge,

dissenting:

I respectfully dissent. There was in my view no flood or loss “already in progress” on the date of the application for flood insurance. The flood, by any definition, occurred on the day of the application.1 There are three possible constructions of the hopelessly ambiguous language of the policy. First, and chosen by the majority, is the construction that leaves the applicant uninsured for the day of the application although the flood occurs after the contract of insurance is entered into. Under this construction of the policy, the risk of a flood occurring after the application is ac*889cepted and before the following midnight is upon the insured. The second possible construction of the exclusionary provision is that coverage was excluded for losses in progress at the time the policy was applied for or accepted. This is the construction urged by the appellant. Its adoption would place upon the insurer the risk of loss for flood occurring on April 10, but after the time of the application. Under this construction the clause would in effect restate the loss-in-progress doctrine of insurance law, see note 2 infra. The third possible construction of the exclusionary language is that a flood occurring on the day of the application but after that day began at midnight was not “already” in progress on the date of the application. This construction places the risk of loss from a flood occurring anytime during April 10, 1975 upon the insurer who accepted the premium.

It could be argued that this third construction would work unfairness upon the insurance company by allowing an applicant to purchase flood insurance coverage as the water lapped at his door so long as the flood did not begin before midnight of the previous day. The answer to the argument is that the insurer can avoid such a possibility by either unambiguously providing in the policy that coverage is excluded for a flood that occurs at any time during the day the policy goes into effect or by relying upon the loss in progress doctrine. Of course the loss-in-progress principle would exclude coverage only for losses in progress at the time of the acceptance of the policy.2 *

The majority, finding that the language of the contract unambiguously excluded coverage, observes that:

the insurer in this case took extra precaution and included the “loss-in-progress” principle as an exclusionary clause in the application for insurance

The insurer was, it seems, attempting to do more. It was apparently attempting to except the risk of a flood in progress, not merely at the time the policy was accepted, but for the entire day. If an insurer wishes to enjoy the benefits of insurance sales prompted by rising water and rising fear but does not wish to bear the risk of flood on the entire day of application, it can plainly so provide by deleting the word “already” from its contract of insurance, or by otherwise unambiguously excluding coverage for the entire day upon which application for insurance is made.

The majority concludes that the policy here did unambiguously exclude coverage for floods occurring at any time on the day of the application. I find the exclusionary provision of the policy ambiguous, and I would reverse the summary judgment entered in the appellee’s favor and remand for a trial of any fact question as to the agreement of the parties, or failing evidence, resolve the ambiguity against the insurer responsible for the language.

. One could argue that there is a fact question as to whether the flood was “in progress” when the river first rose above normal levels or at progressive points thereafter. It is undisputed there was no flood in progress the day preceding the application. Accordingly, there was also then no “loss in progress.” Drewett v. Aetna Casualty & Surety Co., 539 F.2d 496 (5th Cir. 1976); Summers v. Harris, 573 F.2d 869 (5th Cir. 1978).

. It is established in this circuit that the “loss-in-progress” doctrine of insurance law is applicable to policies issued under the national flood insurance program. Arguably the insurer here ought to enjoy the benefit of the doctrine despite the fact that express provision is made in the insurance contract for losses in progress. Even under that view, however, there appears to be a fact question as to whether the flood was in progress at the time the insurer accepted the policy on April 10, 1975. The existence of such a fact question would, of course, preclude entry of summary judgment in favor of the insurer.