{ "id": 11202431, "name": "STEPHEN ALWART and PHYLLIS ALWART, Plaintiffs-Appellants v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant-Appellee", "name_abbreviation": "Alwart v. State Farm Fire & Casualty Co.", "decision_date": "1998-12-01", "docket_number": "No.COA98-38", "first_page": "538", "last_page": "542", "citations": [ { "type": "official", "cite": "131 N.C. App. 538" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "109 N.C. App. 77", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524306 ], "opinion_index": -1, "case_paths": [ "/nc-app/109/0077-01" ] }, { "cite": "837 P.2d 1000", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1992, "pin_cites": [ { "page": "1005" } ], "opinion_index": 0 }, { "cite": "425 S.E.2d 719", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 8, "year": 1993, "pin_cites": [ { "page": "720", "parenthetical": "citation omitted" }, { "parenthetical": "citations omitted" }, { "page": "720" }, { "page": "720" }, { "page": "720-721" }, { "page": "721" } ], "opinion_index": 0 }, { "cite": "109 N.C. App. 77", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524306 ], "pin_cites": [ { "page": "79", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/109/0077-01" ] } ], "analysis": { "cardinality": 471, "char_count": 9565, "ocr_confidence": 0.766, "pagerank": { "raw": 2.2505999028095005e-07, "percentile": 0.7815081110906466 }, "sha256": "4e6116c1712582fcea2c156cc97bc8b23df65a5c0305bba3e46f81aa89c9dbe5", "simhash": "1:6221e5f793f23003", "word_count": 1504 }, "last_updated": "2023-07-14T20:31:28.584435+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges McGEE and SMITH concur." ], "parties": [ "STEPHEN ALWART and PHYLLIS ALWART, Plaintiffs-Appellants v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant-Appellee" ], "opinions": [ { "text": "HUNTER, Judge.\nPlaintiffs purchased a homeowner\u2019s policy from State Farm Fire and Casualty Company (State Farm) insuring plaintiffs\u2019 dwelling, other structures, personal property, and loss of use. During the period of coverage, plaintiffs discovered damage to their home which manifested itself through buckling, wrinkling, and bulging of the exterior wall surface. The residence was covered with an Exterior Insulation and Finish System (EIFS), also known as \u201csynthetic stucco.\u201d Expert opinion, which was not refuted, stated that the damage was caused by contractor error and improper workmanship or products/materials in the installation of the EIFS system. Plaintiffs filed a claim under their policy with State Farm claiming that all \u201censuing losses\u201d resulting from the faulty, inadequate, or defective workmanship should be covered by their policy. State Farm denied coverage on the grounds that the damage resulted from causes specifically excluded under the policy. The denial letter relied on policy exclusions in \u201cSection I \u2014 Perils Insured Against,\u201d subsection 2(f), which states \u201cwe do not insure loss caused by . . . settling, cracking, shrinking, bulging or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings\u201d and \u201cSection I \u2014 Exclusions,\u201d subsection 2(c), which states:\n2. We do not insure for loss to property described in Coverages A and B caused by any of the following. However, any ensuing loss to property described in Coverages A and B not excluded or excepted in this policy is covered ....\nc. Faulty, inadequate or defective:\n1. planning, zoning, development, surveying, siting;\n2. design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction;\n3. materials used in repair, construction, renovation or remodeling; or\n4. maintenance^]\nPlaintiffs filed a complaint against defendant on 30 July 1996 seeking damages for defendant\u2019s refusal to provide coverage under their homeowner\u2019s policy. State Farm\u2019s motion for summary judgment was granted and from that order plaintiffs appeal.\nAt the outset, we note that \u201c[i]n interpreting the relevant provisions of the insurance policy at issue, we are guided by the general rule that in the construction of insurance contracts, any ambiguity in the meaning of a particular provision will be resolved in favor of the insured and against the insurance company.\u201d Smith v. State Farm Fire and Casualty Co., 109 N.C. App. 77, 79, 425 S.E.2d 719, 720 (1993) (citation omitted). However,\n[n]o ambiguity . . . exists unless, in the opinion of the court, the language of the policy is fairly and reasonably susceptible to either of the constructions for which the parties contend. If it is not, the court must enforce the contract as the parties have made it and may not, under the guise of interpreting an ambiguous provision, remake the contract and impose liability upon the company which it did not assume and for which the policy holder did not pay.\nId. (citations omitted). This is true even though \u201c[exclusionary clauses are not favored and must be narrowly construed.\u201d Id.\nPlaintiffs rely on this Court\u2019s rules of policy interpretation outlined in Smith to support their contention that although \u201censuing losses\u201d resulting directly from defective workmanship are excluded from policy coverage, the \u201censuing losses\u201d which are an indirect consequence of defective workmanship are covered. Plaintiffs argue the term \u201censuing losses\u201d is either ambiguous with regard to indirect damages and should be liberally construed in their favor, or is unambiguous and should be strictly construed and limited as an exclusion. An example of an indirect loss offered by plaintiffs for clarification is the water damage resulting from the defective flashing which was a direct consequence of faulty workmanship. In plaintiffs\u2019 example, the water damage is covered as an indirect loss and the replacement of the defective flashing is not covered.\nState Farm\u2019s counter position is that faulty workmanship and losses resulting from it are specifically excluded from the policy and the purpose of the \u201censuing loss\u201d clause, also in the section outlining exclusions, is \u201cnot to create new coverage but to further define what is covered.\u201d State Farm contends that when the policy covers a certain kind of loss the loss will be covered in whatever forms it takes, whether it is a direct or an \u201censuing loss.\u201d On the other hand, if the loss is \u201cexcluded or excepted,\u201d as is faulty workmanship, it is never covered, either directly or indirectly. State Farm illustrates a type of \u201censuing loss\u201d which is covered by the policy in an example of coverage for losses from fire. While the policy excludes water damage in some instances, the \u201censuing loss\u201d clause provides coverage for water damage from putting out the fire. Since loss from fire is covered, \u201censuing losses\u201d from the fire are also covered, despite the fact that water damage may be excluded in another form under the policy.\nThe specific State Farm policy language in question states that \u201cany ensuing loss to property described in Coverages A and B not excluded or excepted in this policy is covered,\u201d and is the identical language reviewed by this Court in Smith. Id. The plaintiffs in Smith were having their kitchen tile replaced and, in the process of ripping off the old tile, the workman used a sander to remove residue from the plywood floor. The residue contained asbestos which was spread throughout the house. The plaintiffs filed a claim on their homeowner\u2019s policy for the cleanup of their home and stated that the \u201cworkmanship\u201d exclusion was inapplicable to their claim \u201cbecause [they] [were] seeking to recover only for their ensuing losses and not for any loss directly due to the defective workmanship.\u201d Id. at 80, 425 S.E.2d at 720. State Farm was granted summary judgment and on appeal this Court held that \u201c[a] common sense reading of that [exclusions] language reveals that the first paragraph of the disputed exclusion means that State Farm\u2019s policy does not provide coverage for property loss caused by any event listed .... However, the policy does provide coverage for any ensuing loss . . . which is not excluded.\u201d Id. at 81, 425 S.E.2d at 720. The Court also agreed with State Farm\u2019s contention that \u201c[t]he exclusion obviously contemplates that the person or company performing the faulty or negligent work should be the ones (sic) responsible for any resulting damages (sic).\u201d Id. at 81, 425 S.E.2d at 720-721.\nSimilarly to the Smiths, the Alwarts claim their damages \u201cwere indirect or \u2018ensuing\u2019 losses resulting from the faulty and defective installation of the exterior components on their home.\u201d However, plaintiffs claim their case can be differentiated from Smith in that damages in Smith were direct damages, while plaintiffs\u2019 damages are \u201censuing losses\u201d resulting from indirect damages. We find this argument unconvincing as the Court in Smith did not limit their holding to \u201censuing losses\u201d directly resulting from the faulty workmanship but stated that \u201cthe exclusion does not itself make[] a distinction between losses directly due to defective workmanship and those losses ensuing from such defective workmanship . . . .\u201d Id. at 82, 425 S.E.2d at 721.\nApplying the precedent established in Smith and our own reading of the policy language, we hold that the policy in this case not only excluded the cost of repairing the faulty construction, workmanship, and materials, but also the cost of repairing the \u201censuing loss,\u201d whether direct or indirect, caused by the faulty construction, workmanship, and materials. As noted by the Washington State Supreme Court in a case also interpreting \u201censuing loss\u201d coverage, \u201c[g]iven the placement of the ensuing loss clause in a policy exclusion, it is difficult to reasonably interpret the ensuing loss clause contained in the defective construction and materials exclusion to be a grant of coverage.\u201d McDonald v. State Farm Fire and Cas. Co., 837 P.2d 1000, 1005 (Wash. 1992). There are parties who can be held responsible for the damage which occurred to plaintiffs\u2019 home and, as in Smith, plaintiffs may pursue those avenues of recovery.\nThe trial court\u2019s granting of summary judgment in favor of the defendant State Farm is\nAffirmed.\nJudges McGEE and SMITH concur.", "type": "majority", "author": "HUNTER, Judge." } ], "attorneys": [ "Lea, Clybum & Rhine, by Joel R. Rhine; Block, Crouch, Keeter & Huffman, L.L.P., by Auley M. Crouch, III; and The McLeod Law Firm, P.A., by Joe McLeod for plaintiff s-appellants.", "Bailey, Way & Jerzak, by Jennifer S. Jerzak for defendant-appellee." ], "corrections": "", "head_matter": "STEPHEN ALWART and PHYLLIS ALWART, Plaintiffs-Appellants v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant-Appellee\nNo.COA98-38\n(Filed 1 December 1998)\nInsurance\u2014 coverage \u2014 synthetic stucco damages \u2014 ensuing loss\nThe trial court correctly granted summary judgment for defendant in an action seeking damages for defendant\u2019s refusal to provide coverage under a homeowner\u2019s policy for synthetic stucco damages. Applying the precedent established in Smith v. State Farm Fire and Casualty Co., 109 N.C. App. 77, and the Court of Appeals\u2019 own reading of the policy language, the policy in this case not only excluded the cost of repairing the faulty construction, workmanship and materials, but also the cost of repairing the \u201censuing loss,\u201d whether direct or indirect, caused by the faulty construction, workmanship, and materials.\nAppeal by plaintiffs from an order entered 10 November 1997 by Judge James D. Llewellyn in New Hanover County Superior Court. Heard in the Court of Appeals 17 September 1998.\nLea, Clybum & Rhine, by Joel R. Rhine; Block, Crouch, Keeter & Huffman, L.L.P., by Auley M. Crouch, III; and The McLeod Law Firm, P.A., by Joe McLeod for plaintiff s-appellants.\nBailey, Way & Jerzak, by Jennifer S. Jerzak for defendant-appellee." }, "file_name": "0538-01", "first_page_order": 572, "last_page_order": 576 }