Kathy Maus Wins Case Involving Insurance Coverage Dispute

September 22, 2020 08:50 AM
Kathy Maus

IADC member Kathy Maus, a partner at Butler Weihmuller Katz Craig LLP, along with colleague Blake Hunter received summary judgment for GuideOne Elite Insurance Company.

This consolidated action involved an insurance coverage dispute arising out of property damage caused to two churches by Hurricane Michael. GuideOne Elite Insurance Company (“GuideOne”) issued commercial property insurance policies to the churches. The policies contained identical Windstorm or Hail Exclusion endorsements that barred coverage for loss or damage “caused directly or indirectly by Windstorm or Hail, regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage.” The churches claimed property damage due to Hurricane Michael, and GuideOne denied coverage citing the endorsements. Subsequently, the churches filed declaratory judgment actions. The cases were removed to federal court and consolidated, and the parties filed cross-motions for summary judgment.

The churches argued that “windstorm,” as used in the endorsement, was ambiguous because the policies referred to the term “hurricane” separately from “windstorm.” GuideOne argued that the endorsement was unambiguous, that the definition of “hurricane” used in the policies only applied to a policy covering a residential restructure, and that a hurricane constitutes a windstorm. Surprisingly, this was an issue of first impression because no court in Florida (of all places) previously addressed this issue head on. 

The court agreed with GuideOne and granted summary judgment. Even though the policies did not define the term “windstorm,” Florida case law states that an undefined term does not render the term ambiguous. In absence of a definition of windstorm in the policies, one must resort to the common meaning of the term. Prior case law defined “windstorm” in other contexts to mean “a wind of sufficient violence to be capable of damaging insured property either by impact or its own force or by projecting some object against the property.” Additionally, courts consistently held that a hurricane constitutes a windstorm. Therefore, the court held that the Windstorm or Hail Exclusion endorsement barred coverage for property damage to the churches caused by Hurricane Michael. 

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