In Gallegos v. Safeco Ins. Co. of Am., 646 F. App'x 689 (10th Cir. 2016), both the Tenth Circuit and the District Court needed only a little evidence to apply standard homeowner's policy exclusions and deny all coverage to the policyholders' roof collapse claim.
The loss.
Eugene and Diane Gallegos owned a home in Colorado. Their home "suffered a partial roof collapse." It was not disputed that the roof collapsed after snow and ice accumulated on the roof. Gallegos v. Safeco Ins. Co. of Am., 646 F. App'x 689, 690 (10th Cir. 2016).
The Gallegoses were not the first owners of the house. There was evidence in the record that the aged framing system was not strong enough to support the weight of the heavy snow.
This evidence came from the testimony of the Gallegoses' own expert engineer. See Gallegos v. Safeco Ins. Co. of Am., 646 F. App'x 689, 692 (10th Cir. 2016). The engineer also testified that in his professional opinion the roof was in no condition to support the weight of the snow before the roof collapsed, whether or not Mr. Gallegos 'made modifications' or the pre-existing roof was untouched. In either case, he testified, "'the wood was very damaged or deteriorated, however you want to put it.'" The roof would not hold whether the wood was original to the house or not. See Gallegos v. Safeco Ins. Co. of Am., 646 F. App'x 689, 692-93 (10th Cir. 2016).
The relevant exclusions.
The Gallegoses' homeowner's policy contained several standard exclusions "for wear and tear; deterioration; and faulty design, construction, repair, and maintenance." Gallegos v. Safeco Ins. Co. of Am., 646 F. App'x 689, 693-94 (10th Cir. 2016).
The policy also contained a standard anti-concurrent cause exclusion. "That provision states that the policy does 'not cover loss caused directly or indirectly by any of [the specifically excluded perils]. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.'” Gallegos v. Safeco Ins. Co. of Am., 646 F. App'x 689, 693 (10th Cir. 2016).
The anti-concurrent cause exclusion barred all coverage for the roof collapse.
The appellate and trial courts gave great weight in this case to the homeowner's policy's anti-concurrent cause exclusion. Although there does not appear to have been much if any evidence that the Gallegoses somehow failed to maintain the roof "framing system," there was the opinion testimony of their own engineering expert that "faulty design, construction, repairs and maintenance" so that in the eyes of the Tenth Circuit there was improper maintenance or construction which was excluded, not to mention undisputed evidence of wear and tear, and deterioration.
The Tenth Circuit affirmed a summary judgment of no coverage here on the ground that improper construction or maintenance or both contributed to collapse of the Gallegoses' roof, and thus exclusions in insurance policy combined with the anti-concurrent cause exclusion to preclude the homeowners' recovery in this case. Gallegos v. Safeco Ins. Co. of Am., 646 F. App'x 689, 693 (10th Cir. 2016).
The wear and tear exclusion applies to normal wear and tear.
The Gallegoses argued that their homeowner's carrier could not rely on the wear and tear exclusion in the policy because there was no evidence that the wear and tear to the framing system supporting their roof was "abnormal" wear and tear.
The Tenth Circuit ruled that the standard wear and tear exclusion in the homeowner's policy at bar does not require evidence of abnormal wear and tear. Accordingly, the carrier did not need to prove that wear and tear contributing to homeowners' roof damage was abnormal in order to rely upon the wear and tear exclusion in that case. Gallegos v. Safeco Ins. Co. of Am., 646 F. App'x 689, 694 (10th Cir. 2016).
The carrier's disclaimer letter raised the relevant exclusions.
Further, the courts held that the homeowner's insurer's disclaimer letter denying all coverage was adequate to the task of raising and reserving each of the relevant exclusions on which the carrier relied to deny the homeowners any coverage. Gallegos v. Safeco Ins. Co. of Am., 646 F. App'x 689, 695 (10th Cir. 2016).
The letter itself was quoted or summarized at pages 691-92 and in footnote 2 on page 691 of the Tenth Circuit's opinion. In general terms, the disclaimer letter in this case went well beyond any general reservation of any exclusions which may come to the carrier's attention at any time. The letter in this case mentioned all the relevant exclusions as grounds for denying all coverage, the main one being the policy's anti-concurrent cause exclusion.
The exclusions could not be waived by the carrier by its conduct here.
Under the applicable law, the insurance carrier could waive a forfeiture of coverage which was otherwise available under the policy (such as in the case of a violation of a policy condition like notice, for example), but it did not waive any exclusions from coverage which did not exist even if its disclaimer letter might not mention them. This is the rule under Colorado law which applied to this case, wrote the Tenth Circuit. Gallegos v. Safeco Ins. Co. of Am., 646 F. App'x 689, 695 (10th Cir. 2016).
It is also the prevailing rule in other jurisdictions far from Colorado, including Florida for example.
The lessons to be drawn from this decision are pretty clear, including that the anti-concurrent cause exclusion is a weapon of mass exclusion as it were. Another lesson to be drawn here is that coverage decisions in one part of the United States often reflect coverage outcomes in other cases in other parts of the United States.
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