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In White v. West American Insurance Company, a bad faith claim arose after the insurer denied coverage with respect to the insured’s claims for damages to their trailer and personal property.  The insured purchased a homeowners policy for  their double wide trailer dwelling.  The policy included a Water Damages Exclusion and a Pollutant Exclusion.  During the policy period, the insured suffered water damage to their trailer and personal property.

The insured filed a breach of contract and bad faith suit alleging that the insurer wrongfully denied coverage with respect to their claims for damages to their trailer and personal property.  The insurer filed a motion for summary judgment alleging that surface water caused the damage to the insured’s property and therefore was excluded under the policy.  The Court found that there were no ambiguities in the policy and that the nature and origin of the damages to the trailer were from surface water caused by the heavy rainfall which began the prior weekend.  The undisputed evidence in the record, including the photographs and the testimony show, beyond doubt, that the cause of the damage was from extensive rain flooding, which in turn caused a backup of sewage from the sewer system when the sewer pumping station’s pumps were turned off.  Even if flooding did not occur, the Concurrent Clause of the policy would exclude surface water from coverage.

The Court found there was no evidence to support the insured’s contention that the water came from underground and was not surface water. Therefore the Court found that the Water Damages Exclusion applies and the insured was properly denied coverage with respect to their damages claim by the insurer, since there was no coverage for water damages caused by flooding and surface water.

Since the Court determined that the insured’s claims for damages were properly excluded from coverage under their policy’s Water Damage Exclusion, there was no duty by the insurer to cover the damages to the insured’s house and personal property.  Since the insured’s claim was properly denied by the insurer, there can be no showing under a clear and convincing standard that there was bad faith.  Therefore the Court granted the insurer’s motion for summary judgment on the insured’s bad faith claim.

Date of Decision: December 5, 2008

White v. West Am. Ins. Co., Civil Action No. 4:06-CV-2453, 2008 U.S. Dist. LEXIS 99034 (M.D. Pa. Dec. 5, 2008)(Blewitt, J.)