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Mississippi Farm Bureau Casualty Insurance Co. v. Smith

Supreme Court of Mississippi

March 7, 2019

MISSISSIPPI FARM BUREAU CASUALTY INSURANCE COMPANY
v.
DOROTHY SMITH

          DATE OF JUDGMENT: 09/26/2017

          ADAMS COUNTY CIRCUIT COURT HON. LILLIE BLACKMON SANDERS

          TRIAL COURT ATTORNEYS SAM S. THOMAS JOSEPH B. MOFFETT DEBORAH McDONALD OWEN P. TERRY

          BEFORE RANDOLPH, C.J., MAXWELL AND BEAM, JJ.

          RANDOLPH, CHIEF JUSTICE.

         ¶1. Dorothy Smith sued Mississippi Farm Bureau Casualty Insurance Company ("Farm Bureau"), her homeowner's insurance carrier, after Farm Bureau denied her claim based on the earth-movement exclusion in the policy. Farm Bureau filed a motion for summary judgment, which was denied by the trial court. Farm Bureau filed a petition for interlocutory appeal by permission, which this Court granted. The Court finds that the trial court erred in denying Farm Bureau's motion for summary judgment. The earth-movement exclusion is unambiguous and excludes coverage for the property damage suffered by Smith. We reverse and render in favor of Farm Bureau and dismiss Smith's complaint as to Farm Bureau.

         FACTS AND PROCEDURAL HISTORY

         ¶2. Smith filed suit against her home builder, Larry Brown, d/b/a Brown's Construction Company, and Farm Bureau after learning that her home's foundation was defective. Smith filed a claim for the repair of the foundation, but Farm Bureau denied the claim. Smith alleged that Farm Bureau's refusing to pay for repairs under the terms and conditions of the policy amounted to breach of contract. She further alleged that the denial constituted bad faith and tortious breach of contract. Smith demanded damages to repair the foundation, damages for inconvenience, anxiety, emotional distress, extracontractual damages, punitive damages, and attorneys' fees.[1]

         ¶3. In response, Farm Bureau filed its answer and a motion for summary judgment, urging that Smith's claim was properly denied because the foundation defects were not covered under the policy's earth-movement exclusion.[2] The earth-movement exclusion reads,

A. We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.
2. Earth Movement
Earth Movement means:
a. Earthquake, including land shock waves or tremors before, during or after a volcanic eruption;
b. Landslide, mudslide or mudflow; c. Subsidence or sinkhole; or
d. Any other earth movement including earth sinking, rising or shifting;
caused by or resulting from human or animal forces or any act of nature unless direct loss by fire or explosion ensues and then we will pay only for the ensuing loss.

         Farm Bureau argued that the exclusion precludes coverage for any damage resulting from earth movement, regardless of its cause. Farm Bureau cited three cases: Rhoden v. State Farm Fire & Casualty Co., 32 F.Supp.2d 907, 913 (S.D.Miss. 1998); Boteler v. State Farm Casualty Insurance Co., 876 So.2d 1067 (Miss. Ct. App. 2004); and Hankins v. Maryland Casualty Co., 101 So.3d 645 (Miss. 2011). Farm Bureau argued that in all of these cases, the courts found that an earth-movement exclusion precluded coverage for damage caused by earth movement. Farm Bureau pointed out that Smith's proof confirmed that earth movement had caused her foundation's problems. Because no disputed issue of fact remained, Farm Bureau sought summary judgment.

         ¶4. Farm Bureau attached seven exhibits to its motion: (1) Smith's amended complaint; (2) Farm Bureau's answer and defenses to Smith's amended complaint; (3) Smith's responses to Farm Bureau's first set of interrogatories and first request for production of documents; (4) a two-paragraph letter/"expert report" authored by Smith's expert witness, Randy Blanton; (5) Blanton's deposition; (6) Smith's deposition; and (7) Smith's home insurance policy from Farm Bureau.

         ¶5. Smith, in her interrogatory responses, identified "[f]oundation and [s]tructural separation on house[, ] especially in [m]aster [b]edroom, [m]aster [b]athroom, [f]ireplace, [p]atio [c]racks and on [m]ason work on outside of house" as the problems for which she sought payment from Farm Bureau. She claimed the "[s]tructure falling in as well as interior" was the cause of such problems. In both responses, Smith referred to the "Blanton Report."

         ¶6. The "Blanton Report" is a two-paragraph letter authored by Smith's expert, Randy Blanton, which reads,

Dear Mr. Moffett,
After further inspection of the exterior of Dorothy Smith's home I found an area around the rear patio that has some damage, such as brick cracking, doors and windows separating from brick and etc. I did not notice this on my first inspection 8 years ago, but this indicates some foundation problems in my opinion. Just as a rough estimate I would say to correct this issue cost would be between $45, 000.00 to $50, 000.00 because it is very unlikely to match existing brick and etc.
This damage could be from faulty design in the foundation or poor compaction on the fill dirt when the house was first built or a busted water line that got the ground wet. Until it is opened up there is really no way to tell.
Thanks,
Randy L. ...

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