Federal jury finds for homeowners’ insurer on denial of coverage for damage caused by settlement

Suzanne Bruss successfully defended American Bankers Insurance Company of Florida in a breach of contract lawsuit filed in U.S. District Court in Kansas by homeowners after their home had sustained structural damage caused by settlement of the home. The plaintiff homeowners alleged they began noticing cracks in walls and sloping floors a few months after a water pipe had burst which they maintained caused water to seep below the slab and wet the foundation soils. Plaintiffs sued for the replacement cost of the home of over $500,000, damage to $100,000 in personal property due to mold, and their attorneys fees on the basis that the carrier had denied the claim without just cause or excuse. Before the trial, the court found there was no coverage for mold or for the damage to the home under the main dwelling coverage part due to applicable exclusions. Plaintiffs then claimed the structural damage was caused by “collapse” under an incidental coverage. The jury determined American had not breached the contract by denying the claim, and plaintiffs recovered nothing on their claim.