RENDERED: JULY 2, 2021; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-1067-MR
DENNIS PROBUS AND REBECCA
PROBUS APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT
v. HONORABLE ANN BAILEY SMITH, JUDGE
ACTION NO. 19-CI-007784
ALLSTATE INSURANCE CO. D/B/A
ALLSTATE INDEMNITY CO. APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: DIXON, GOODWINE, AND TAYLOR, JUDGES.
DIXON, JUDGE: Dennis and Rebecca Probus appeal from the order granting
summary judgment in favor of Allstate Insurance Co. d/b/a Allstate Indemnity Co.
(“Allstate”) entered on August 2, 2020, by the Jefferson Circuit Court. Following
a careful review of the record, briefs, and law, we affirm.
FACTS AND PROCEDURAL BACKGROUND
In 2017, the Probuses purchased a vacation residence and insured it
with Allstate. In 2018, the Probuses visited their vacation residence over Labor
Day weekend. When they departed, they left the water on—but not running. Upon
entering the residence on November 7, 2018, Mr. Probus discovered water and
mold over a large portion of the residence and heard water leaking. He followed
the sound and saw water spraying from a cracked plastic nut on the water supply
line to the toilet. The Probuses reported the claim to Allstate.1 An adjuster
inspected the residence on January 14, 2019, and informed the Probuses that the
damage was not covered under their policy.
On December 12, 2019, the Probuses filed the lawsuit herein alleging
Allstate breached their insurance contract by failing to properly investigate and
satisfy the claim. Allstate filed an answer and counterclaim, deposed the Probuses,
and moved the trial court for summary judgment. After the matter was briefed, the
trial court entered its opinion and order granting Allstate summary judgment
because the damages were specifically excluded by the terms of the insurance
contract. This appeal followed.
1
Mr. Probus testified in his deposition that he reported the claim to Allstate sometime between
November 14 and 16, 2018; Mrs. Probus testified in her deposition that they reported the claim
to Allstate sometime between November 13 and 15, 2018.
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STANDARD OF REVIEW
Summary judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, stipulations, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of law.” CR2 56.03. An
appellate court’s role in reviewing a summary judgment is to determine whether
the trial court erred in finding no genuine issue of material fact exists and the
moving party was entitled to judgment as a matter of law. Scifres v. Kraft, 916
S.W.2d 779, 781 (Ky. App. 1996). A grant of summary judgment is reviewed de
novo because factual findings are not at issue. Pinkston v. Audubon Area Cmty.
Servs., Inc., 210 S.W.3d 188, 189 (Ky. App. 2006) (citing Blevins v. Moran, 12
S.W.3d 698, 700 (Ky. App. 2000)).
ANALYSIS
On appeal, the Probuses argue the trial court erred in granting
summary judgment, alleging the existence of disputed material facts which must be
tried by a jury. The first alleged disputed material fact is when the rupture in the
waterline was discovered. Mr. Probus testified in his deposition that he discovered
the rupture on November 7, 2018. A water bill has also been presented for the
period ending November 1, 2018, showing much greater use for that billing period,
2
Kentucky Rules of Civil Procedure.
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which began on October 2, 2018. It has not been established when exactly the
water bill was received; however, this issue—while potentially disputed—is not a
material one that would change the interpretation of the insurance contract. The
contract excludes damage caused by:
16. Seepage, meaning continuous or repeated seepage or
leakage over a period of weeks, months, or years, of
water, steam or fuel:
a) from a plumbing, heating, air conditioning or
automatic fire protection system or from within a
domestic appliance; or
b) from, within or around any plumbing fixtures,
including, but not limited to shower stalls, shower
baths, tub installations, sinks or other fixtures
designed for the use of water or steam.
ROA3 90-91 (emphasis added). Here, Mr. Probus testified that the water had
entered the residence for a period of “four weeks or better.” Thus, whether the
incoming water was discovered on November 1 or 7, 2018, is immaterial—either
date still constitutes a period of weeks—and would not otherwise preclude the trial
court’s grant of summary judgment.
According to the Probuses, the next disputed issue of material fact is:
“what is the efficient proximate cause of the damage?” They concede the “actual
cause is clear because the water was spraying from the cracked plastic nut. The
3
Record on appeal.
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damage caused by the rupture was caused by the water escaping from the cracked
plastic nut.” Here—contrary to the Probuses’ assertions—the facts are not in
dispute; rather, the Probuses are challenging the trial court’s legal conclusions
concerning application of the insurance contract to those facts. Because the
construction and interpretation of a contract is a matter of law, it is reviewed under
the de novo standard. Nelson v. Ecklar, 588 S.W.3d 872, 878 (Ky. App. 2019),
review denied (Dec. 13, 2019).
The Probuses cite Smith v. Higgins, 819 S.W.2d 710 (Ky. 1991), in
support of their argument that the trial court incorrectly construed the insurance
contract. However, Smith concerned interpretation of the Motor Vehicle
Reparations Act, not an insurance contract. The Probuses also cite Reynolds v.
Travelers Indemnity Company of America, 233 S.W.3d 197 (Ky. App. 2007),
which concerned interpretation of a similar insurance contract to the one herein.
In Reynolds, a refrigerator was stolen from the Reynoldses’ residence
and the water left on, which caused water to leak in the home. The Reynoldses
reported the theft and subsequent water and mold damage to their insurance carrier
within two weeks. That panel of our Court opined:
The policy provision exempts from coverage a loss
caused by the “continued or repeated . . . leakage of
water or steam over a period of time, weeks, months or
years, from within a . . . household appliance.”
(Emphasis added.) The Reynoldses contend that there
was no proof that the water leaked for a period of time
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that included weeks. They contend that the water leaked
for a period of time less than fourteen days. Travelers
argues that the terms period of time and weeks refer to
separate and discrete spans of time. “If the term ‘time’
meant weeks, months, or years, it would be mere surplus
since those terms are included in the policy language.”
Appellee’s brief at 12.
Ambiguous coverage exclusions are strictly
construed so as to make insurance effective under the
circumstances. [Kemper Nat’l Ins. Cos. v. Heaven Hill
Distilleries, Inc., 82 S.W.3d 869, 873-74 (Ky. 2002)]. If
an insurance exclusion is subject to two reasonable
interpretations, the interpretation which is more favorable
to the insured must be adopted. [Motorists Mut. Ins. Co.
v. RSJ, Inc., 926 S.W.2d 679, 680 (Ky. App. 1996)].
. . . We believe that the phrase “period of time” cannot
reasonably be said to refer to a separate span of time
somehow distinct from “weeks, months or years.”
Instead, we believe that the grammatical structure of the
sentence informs the ordinary person that a loss caused
by the continuous or repeated leakage of water from a
household appliance is not covered by the policy if and
only if the leakage has occurred over a period of time
that may be comprised of weeks, months, or years. The
Reynoldses presented evidence tending to show that the
theft occurred less than two weeks before it was
discovered. Thus, the exception to coverage does not
encompass the facts and circumstances of the loss at
issue in this case. The trial court erred by granting
summary judgment on this basis.
Id. at 202.
Here, although the facts are distinguishable from Reynolds in that
coverage was properly denied, the same logic applies concerning the interpretation
of the insurance contract. The phrase “over a period of weeks, months, or years”
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must not be overlooked. Because there is no dispute that the water entered the
residence for a period of weeks, the claim was properly denied, and summary
judgment properly granted. Furthermore, we agree with the trial court’s
assessment concerning the Probuses’ semantic argument that the water line rupture
did not constitute a “leak.” The damage to their residence was clearly caused by a
leak as the term is understood by ordinary people. Mr. Probus even characterized
it as such in his deposition. (See ROA 25, deposition of Mr. Dennis Probus, Feb.
14, 2020, p. 19, lines 20-21. “I could hear the noise of a water leak.”)
The Probuses’ final, albeit cursory, argument is that their policy’s
discussion of mold damage “does not apply in this case because the proximate and
efficient cause of the loss was a rupture of the plastic nut, which released water
throughout the entire house” rather than a “leak,” as discussed above. In Reynolds,
the Court observed:
Finally, we shall consider whether the policy
provision excluding a loss caused by mold applies to
justify Travelers’ rejection of the claim. We conclude
that the exception does not apply to the facts and
circumstances of this case.
There is no reason to doubt that the mold that developed
in the Timber Ridge Drive residence was a direct result
of the theft of their refrigerator—a covered peril as we
have concluded. The Reynoldses contend that the cost of
removing the mold was not a loss separate and apart from
the loss resulting from the theft but that it was instead
part and parcel of the covered loss—indeed, a direct and
proximate result of the theft. Since there is no genuine
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issue of material fact with respect to the cause of the
mold, we are satisfied that the costs associated with the
removal of the mold are covered by the policy.
Reynolds, 233 S.W.3d at 202. Here, there is no reason to doubt that the mold that
developed in the Probuses’ residence was a direct result of the water leak from the
cracked water supply line nut, which was not a covered peril under their insurance
policy. Accordingly, and under the terms of the insurance policy herein,4 the mold
4
Concerning mold, the policy at issue provides:
C. We do not cover loss to the property described in Coverage
A˗Dwelling Protection or Coverage B˗Other Structures
Protection consisting of or caused by mold, fungus, wet rot, dry
rot or bacteria. This includes any loss which, in whole or in part,
arises out of, is aggravated by or results from mold, fungus, wet
rot, dry rot or bacteria.
This exclusion applies regardless of whether mold, fungus, wet rot,
dry rot or bacteria arises from any other cause of loss, including
but not limited to a loss involving water, water damage or
discharge, which may otherwise be covered by this policy, except
as specifically provided in Section I, Conditions˗Mold, Fungus,
Wet Rot and Dry Rot Remediation as a Direct Result of a
Covered Water Loss.
...
C. We do not cover loss to the property described in Coverage
C˗Personal Property Protection consisting of or caused by mold,
fungus, wet rot, dry rot or bacteria. This includes any loss which,
in whole or in part, arises out of, is aggravated by or results from
mold, fungus, wet rot, dry rot or bacteria.
This exclusion applies regardless of whether mold, fungus, wet rot,
dry rot or bacteria arises from any other cause of loss, including
but not limited to a loss involving water, water damage or
discharge, which may otherwise be covered by this policy, except
as specifically provided in Section I, Conditions ˗Mold, Fungus,
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damage was not a covered loss. Thus, the trial court did not err in granting
summary judgment in favor of Allstate.
CONCLUSION
Therefore, and for the foregoing reasons, the order of the Jefferson
Circuit Court is AFFIRMED.
ALL CONCUR.
BRIEF FOR APPELLANTS: BRIEF FOR APPELLEE:
Dennis R. Carrithers A. Campbell Ewen
Louisville, Kentucky William P. Carrell, II
Louisville, Kentucky
Wet Rot and Dry Rot Remediation as a Direct Result of a
Covered Water Loss.
...
19. Mold, Fungus, Wet Rot and Dry Rot Remediation as a
Direct Result of a Covered Water Loss
In the event of a covered water loss under Coverage A˗Dwelling
Protection, Coverage B˗Other Structures Protection or
Coverage C˗Personal Property Protection, we will pay up to
$5,000 for mold, fungus, wet rot or dry rot remediation.
ROA 91, 96, 105 (emphasis in original).
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Dennis Probus v. Allstate Insurance Co. D/B/A Allstate Indemnity Co.
Combined Opinion