Argument That Rain Alone Can’t Cause a Flood “Would be News to Noah” Says a California Court

Last month an appellate court in California looked to the Bible, citing the Book of Genesis when rejecting the argument that an inundation caused solely by heavy rain was not an excluded flood.  The opinion was handed down in Horvath v. State Farm General Ins. Co., 2014 WL 2931049 (Cal.App., June 30, 2014).

shutterstock_25651162The insureds, Peter and Susan Horvath, owned a home at the end of a cul-de-sac at the bottom of Bell Canyon Drive.  On December 22, 2010, severe rainstorms led to what the husband described as a “river of water coming down the street.”  The town’s drainage systems were overwhelmed, and the cul-de-sac quickly filled up, ultimately inundating the first floor of the insureds’ home with 18” of water.  The couple were evacuated by firefighters, and the local municipality yellow-tagged the structure as unfit to live in.

The policyholders made claim under a homeowners policy issued by State Farm General Insurance Company.  The carrier denied liability because “flood” was an excluded peril under the contract of insurance.  Specifically, the language at issue recited as follows:

We do not insure under any coverage for any loss which is caused by . . . Water Damage, meaning flood, surface water, waves, tidal water, tsunami[.]

The term “flood” was not further defined in the policy.

Litigation followed.  The trial court granted State Farm’s motion for summary judgment, and the Horvaths took an appeal.  Their argument was that a flood could not be caused by excess rainfall alone.  They contended that the term was instead confined to situations in which “an existing body of water exceed[s] its bounds and inundate[s] the surrounding area with water.”

On June 30, a unanimous panel of the state’s intermediate level court disagreed, and it affirmed.  As Justice Raymond J. Ikola’s opinion succinctly put it, “[t]hat would be news to Noah,” citing Genesis 7:17 (“And the flood was forty days upon the earth; and the waters increased, and bare up the ark, and it was lift up above the earth”).

The panel interpreted its task as determining whether the plain and ordinary meaning of the word “flood” would encompass the water that damaged the Horvaths’ home.  In Justice Ikola’s words:

We believe it does.  What happened to plaintiffs is a typical “flash flood.”  In common parlance, a “flash flood” is “a local flood of great volume and short duration generally resulting from heavy rainfall in the immediate vicinity.”  (Merriam-Webster’s Collegiate Dict. (10th ed. 2001) p. 442).

* * *

A flash flood is a type of “flood” as demonstrated by the fact that it is defined in terms of a flood.

The court also rejected the policyholders’ ambiguity argument.  The Horvaths asserted that what happened to their home would not have qualified as a flood under the National Flood Insurance Program’s definition of that term because most of the NFIP formulation was confined to situations in which an existing body of water overflows.  As the panel explained, however, one cause of an NFIP flood is “runoff of surface waters,” and “a deluge of rainwater” is just that – “the runoff of surface water.”

The opinion was not designated for publication by the Court of Appeal.  As a result, it may not be cited or relied upon in any other action in California.

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About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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