First-Party Mold Damage Claim Was Not Covered by Premises Liability Endorsement
July 31, 2013 |A federal district court in Connecticut has ruled that a homeowner’s first-party claim for mold damage and remediation was not covered by a Limited Fungi, Wet or Dry Rot, or Bacteria Endorsement. The endorsement only covered premises liability claims, the court decided.
The Case
After Homestead Country Properties, LLC, found mold in the basement ceiling and in the attic close to the roof in a home it owned in Granby, Connecticut, it submitted a claim for mold damage and remediation to its insurance carrier. The insurer denied the claim, contending that the mold had not been caused by a covered peril.
Homestead sued the insurer, alleging that it had breached its duty to indemnify under the policy by denying its first-party claim for mold damage. Homestead did not dispute that the mold damage was not caused by an insured peril. Rather, Homestead argued that the insurer was improperly attempting to interpose a “fortuitous cause” requirement on coverage under the policy’s Limited Fungi, Wet or Dry Rot, or Bacteria Endorsement.
The insurer moved for summary judgment.
The Court’s Decision
The court granted the insurer’s motion.
In its decision, the court observed that the title of the endorsement stated that it was a “Premises Liability” endorsement, and that none of the terms of the endorsement purported to amend any part of the policy other than the Premises Liability portion. Thus, the court found, the Limited Fungi, Wet or Dry Rot, or Bacteria Endorsement did not apply to first-party coverage under the policy. The court explained that for Homestead’s claim to be covered, the mold had to have been caused by one of the perils insured against in the policy. Concluding that there was no factual dispute that the mold was not caused by an insured peril, the court granted summary judgment in favor of the insurer.
The case is Homestead Country Properties, LLC v. American Modern Home Ins. Co., No. 3:12cv1003 (JBA) (D. Conn. July 12, 2013).
