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FL Court Rules 'Act of Nature' on Corrosion, Rust
In Dodge v. People’s Trust Insurance Company, 2021 WL 2217299 (4th DCA Jun. 2, 2021), a Florida court ruled that rust and corrosion of water pipes is considered an “act of nature.”
The ruling made by Florida’s Fourth District Court of Appeals thus excluded the insured’s water overflow incident from coverage under their homeowner’s insurance policy.
What Happened
According to an appeal made by Gene and Kathleen Dodge against the People’s Trust Insurance Company, the insured couple disagreed with a summary judgment order limiting People’s Trust Insurance Company's liability for water damage to $10,000 under the parties’ homeowner’s insurance policy.
While the parties agreed that the Dodges’ loss resulted from the deterioration of cast iron pipes under the home because of “rust or other corrosion,” the Dodges did not agree with the policy’s limit of $10,000. As a result, the couple sued People’s for breach of contract, arguing whether the policy limits coverage to $10,000.
In their appeal, the Dodges point out that the policy coverage would be dependent on the term “act of nature” within the homeowner’s insurance policy. In addition, the appeal also pointed out exclusions in the policy that did “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 …”
One excluded clause that followed was “Water.” The policy’s endorsement further defines “water” as “Discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance; … caused by or resulting from human or animal forces or any act of nature.”
In the policy’s Limited Water Damage Coverage endorsement, which covers up to a $10,000 limit, People’s report that the losses covered include “Sudden and accidental direct physical loss to covered property by discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire protective sprinkler system or from within a household appliance.”
Court Ruling
While there was no doubt that water overflow from the insured’s plumbing system caused damage to their home and that the parties agreed that incident happened as a result of deteriorated cast iron pipes due to rust and other corrosion, the appellants argued that policy contained a water damage exclusion for “. . . overflow of water . . . caused by or resulting from human or animal forces or any act of nature.”
In this case, the court was obliged to better define “act of nature.” One the side of the appellants, the insured argued that the phrase “act of nature” was only triggered if some singular act or external force occurred and was synonymous with the phrase “act of God,” which is defined as “an overwhelming, unpreventable event caused exclusively by forces of nature …” by Black’s Law Dictionary.
It is because the corrosion and rust wasn’t due to an “exceptional, unpreventable event,” that the Dodges argued that the policy’s water damage exclusion should not have been employed.
Despite the argument, Judge Nicholas R. Lopane of the 17th Judicial Circuit in Broward County, Florida, ruled that “act of nature” simply meant “something that naturally occurs,” leading to the determination that rust and corrosion could fit within the broad definition.
In further explaining the ruling, the judge defined “act” as “doing of a thing” and “nature” as the “the inherent character or basic constitution of a person or thing.” In addition, the judge further defined that “rust” is a “reddish brittle coating formed on iron especially when chemically attacked by moist air,” and “corrosion” is “the action, process, or effect of corroding,” which is “to wear away gradually by chemical action.”
By observing that rust is a form of corrosion caused by a chemical reaction that occurs within the presence of iron and moist air, the judge found corrosion to be an “act of nature” in that it is “the doing by chemical action of the inherent character of the thing – the wearing away of iron by moist air.”
In conclusion, the judge ruled that the policy term “act of nature” did not require an uncontrollable or unpreventable event, and excluded damage caused by natural forces. The ruling further reported that the water damages resulting damages to the insured’s home was precluded from coverage.
Under the expansive definition established in the case, the term “act of nature” will now be applied to controllable, preventable, and gradual events under Florida law.
