Present: Hassell, C.J, Lacy, Keenan, Koontz, Lemons, and
Agee, JJ., and Carrico, S.J.
ALLSTATE INSURANCE COMPANY
v. Record No. 060951 OPINION BY JUSTICE DONALD W. LEMONS
March 2, 2007
ELSIE BRADSHAW GAUTHIER, ET AL.
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
William R. O'Brien, Judge
In this appeal, we consider whether an exclusion from
coverage in an insurance policy properly applies to a claim
for loss as a result of the sinking of a boat.
I. Facts and Proceedings Below
Elsie Gauthier owned a power boat covered under an all
risk insurance policy (the "policy") issued by Allstate
Insurance Company ("Allstate"). Under the terms of the
policy, Albert Gauthier, Mrs. Gauthier's husband, was an
insured as well. Mr. Gauthier disconnected a water pump from
the boat in order to take "the water pump to someone else to
repair." It is stipulated that:
In the process of replacing the water pump, Mr.
Gauthier disconnected the hose that ran from the
thru hull fitting to the pump's suction. Instead
of closing off the seacock [valve], Mr. Gauthier
put a plug made from a handle of a rake in the
hose and secured the loose end in a position
above the water line to prevent water from
flowing through the tube and secured it by
pushing it behind a bar on the engine.
That same day, Mr. Gauthier checked the boat before going
to sleep, and "everything was fine." It was a windy night,
and when Mr. Gauthier awoke the next morning, the boat had
sunk. Mr. Gauthier believed the motion of the boat caused the
hose to fall and the make-shift plug to fall out. Water then
"came into the boat through the hose connected to the Thru
Hull Fitting" causing the boat to sink.
The Gauthiers notified Allstate of the loss. The boat
was considered a total loss, but after an investigation, the
Gauthiers received a letter from Allstate denying coverage for
the loss. Allstate contended in the letter that the language
in the policy "excluded the incident from coverage."
Specifically, Allstate relied on Coverage TT exclusion number
5 in denying coverage. Exclusion number 5 provides:
We do not cover loss to the property described in
Coverage TT resulting in any manner from . . .
repairing, renovating, servicing, or maintenance.
Fire or explosion resulting from any of these is
covered, but only for loss caused by fire or
explosion.
The Gauthiers filed an action for breach of contract
against Allstate seeking payment under the policy for the loss
of the boat. The parties agree that if the loss were covered,
Allstate must pay the Gauthiers $40,766. The trial court
found the sinking of the boat was a result of Mr. Gauthier's
negligence. The trial court also found that because
"negligence was not excluded by the policy," it was a "covered
loss," and "Allstate would owe coverage" to the Gauthiers.
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Allstate now appeals to this Court upon one assignment of
error: "The trial Court erred in ruling that the plaintiffs'
were entitled to coverage under the Boat Owners Policy issued
by the Allstate Insurance Company to Elsie Bradshaw Gauthier."*
II. Analysis
Allstate concedes that the negligence of Mr. Gauthier
resulted in the sinking of the boat and that negligence is a
covered loss under the policy, unless specifically excluded
within the policy. Therefore, the question on appeal is
limited to whether an exclusion under the policy applies
thereby relieving Allstate from the duty to pay for the loss.
Allstate asserts that "the loss was the result of repair
and/or maintenance, etc. being performed on the water pump,
that said loss clearly is excluded from coverage under the
policy and that Allstate rightfully denied said loss." The
*
This assignment of error is taken from Allstate's
petition for appeal. Allstate restated the assignment of
error in its brief to read:
The Trial Court erred in failing to apply the
contracted policy exclusion "Exclusion 5, Coverage
TT, Losses We Do Not Cover," to the Gauthiers' loss
and concluding there was coverage for their loss
under the insurance contract.
It is improper for an appellant to change the wording of
an assignment of error from that which was presented to the
Court at the petition stage. White v. Commonwealth, 267 Va.
96, 102-03, 591 S.E.2d 662, 665-66 (2004). Here the change,
while improper, does not change the substance of the error
alleged.
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Gauthiers maintain that the "predominant efficient cause of
the sinking and loss was the flooding of the vessel caused by
the failure of the insured to close the seacock valve. If the
valve had been closed[,] the water could not have entered the
boat and the boat would not have sunk."
Both parties spend much time arguing about how to
interpret the policy when there are concurrent causes for the
loss. As a result, the parties discuss in some detail our
opinion concerning the specific policy language at issue in
Lower Chesapeake Assocs. v. Valley Forge Ins. Co., 260 Va. 77,
532 S.E.2d 325 (2000), and whether the language of this policy
is similar.
However, Lower Chesapeake is inapposite to this case
because the trial court found that there was only one cause of
the loss:
The Court is going to find based on the
stipulations and arguments of counsel that
there's no question that this loss was as a
result of the insured's improperly or
negligently inserting that device [(make-shift
plug)] to – in lieu of the [seacock], so that's
how the water got in and caused the boat to
sink.
I'm also going to find that [such] negligence
was not excluded by the policy, so that the
policy does apply and the insureds are entitled
to their loss here.
Consequently, the issue in this case is not how to handle
concurrent causal events. Rather, the issue in this case is
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whether the one causal event found by the trial court may be
characterized as a "loss to the property . . . resulting in
any manner from: . . . repairing, renovating, servicing or
maintenance." If so, then the loss is excluded under the
policy.
In the case at bar, the trial court's determination that
the negligence of the insured did not constitute "repairing,
renovating, servicing or maintenance," was a finding of fact.
Accordingly, we must approve the finding of the trial court
unless it is "plainly wrong or without evidence to support
it." Code § 8.01-680; see Wilson v. Commonwealth, 272 Va. 19,
27, 630 S.E.2d 326, 330 (2006).
Mr. Gauthier's negligence was not in repairing the boat,
but in failing to close the seacock after disconnecting the
hose. It was the disconnecting of the boat's closed system
and the failure to close the seacock that allowed water to
come into the boat, causing the boat to sink. As the parties
stipulate, Mr. Gauthier was taking "the water pump to someone
else to repair."
Exclusions in insurance policies must be read narrowly in
favor of coverage. Transcontinental Ins. Co. v. RBMW, Inc.,
262 Va. 502, 512, 551 S.E.2d 313, 318 (2001) ("Exclusionary
language in an insurance policy will be construed most
strongly against the insurer and the burden is upon the
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insurer to prove that an exclusion applies."). If Allstate
intended for negligent acts that occurred while in preparation
for repairs to be excluded, it needed to use language clearly
accomplishing that result.
In this case, the trial court found that the cause of the
loss was Mr. Gauthier's negligence in failing to close the
seacock. The trial court further held that such actions and
omissions on the part of Mr. Gauthier did not fall within the
exclusions to the policy. These findings are neither plainly
wrong, nor without evidence to support them. Thus, pursuant
to Code § 8.01-680, the judgment will not be disturbed.
III. Conclusion
For the reasons stated herein, we will affirm the
judgment of the trial court.
Affirmed.
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