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Martinez v. American Family Mutual Insurance Co.

Court of Appeals of Colorado, Division A

February 9, 2017

Michael Martinez, Plaintiff-Appellant,
American Family Mutual Insurance Company, a Wisconsin Corporation, Defendant-Appellee.

         Weld County District Court No. 15CV30103 Honorable Todd L. Taylor, Judge


          Meier & Giovanini, LLC, Douglas Meier, Lakewood, Colorado, for Plaintiff-Appellant.

          Campbell, Latiolais & Averbach, LLC, Kirsten M. Dvorchak, Colin C. Campbell, Denver, Colorado, for Defendant-Appellee.



         ¶ 1 In this insurance coverage case, plaintiff, Michael Martinez, appeals the district court's entry of summary judgment, pursuant to C.R.C.P. 56(c), in favor of defendant, American Family Mutual Insurance Company (American Family). We affirm.

         I. Background and Procedural History

         ¶ 2 At all times relevant to this appeal, Martinez owned a home in Erie, Colorado. The home had a finished basement with windows below the ground, which were surrounded by window wells.

         ¶ 3 On August 3, 2013, there was a severe thunderstorm in Erie. According to Martinez's complaint, some of the heavy hail and rain collected at the base of his window wells, and the hail at the base of the window wells prevented the accumulating rainwater from percolating into the ground. As alleged by Martinez, the rainwater accumulated on top of the hail to such an extent that it eventually overflowed the basement windows, seeped into the basement, and caused substantial damage to his home and personal property.

         ¶ 4 Martinez filed a claim with his insurer, American Family. After conducting an investigation, American Family concluded that the damage to Martinez's home was caused by either "flooding" or "surface water, " and was, therefore, expressly excluded from coverage under Martinez's insurance policy. American Family denied Martinez's claim on these grounds.

         ¶ 5 Thereafter, Martinez filed suit, seeking a declaratory judgment on the issue of coverage. Martinez also asserted claims for contractual and extra-contractual damages. American Family filed a motion for summary judgment on the issue of coverage, arguing that the insurance policy's water damage exclusion for "flood" and "surface water" applied, as a matter of law, to the damage to Martinez's home.

         ¶ 6 In a lengthy and thorough written order, the district court granted American Family's motion for summary judgment, concluding that the rain and hail that collected in the window wells was "surface water" and, thus, the loss from the resulting damage was excluded by the plain language of the insurance policy.

         ¶ 7 This appeal followed.

         II. Standard of Review and Applicable Law

         ¶ 8 An insurance policy is a contract and, thus, its meaning is a question of law that we review de novo. Grippin v. State Farm Mut. Auto. Ins. Co., 2016 COA 127, ¶ 9. In construing an insurance policy, we apply well-settled principles of contract interpretation, Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294, 299 (Colo. 2003), and give effect to the intent and reasonable expectations of the parties thereto, see Grippin, ¶ 9. In addition, we read the provisions of the policy as a whole, construing the policy so that all provisions are harmonious and none is rendered meaningless. Sachs v. Am. Family Mut. Ins. Co., 251 P.3d 543, 546 (Colo.App. 2010).

         ¶ 9 We review an order granting a motion for summary judgment de novo. Georg v. Metro Fixtures Contractors, Inc., 178 P.3d 1209, 1212 (Colo. 2008). Summary judgment is appropriate only if the pleadings and supporting documentation demonstrate that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c).

         ¶ 10 In support of its motion for summary judgment, the moving party carries the initial burden of demonstrating that there is no genuine issue of material fact. Greenwood Tr. Co. v. Conley, 938 P.2d 1141, 1149 (Colo. 1997). When a party moves for summary judgment on an issue upon which the party would not bear the burden of persuasion at trial, the moving party's initial burden of production may be satisfied simply by demonstrating an absence of evidence in the record to support the nonmoving party's case. Casey v. Christie Lodge Owners Ass'n, 923 P.2d 365, 366 (Colo.App. 1996). "[O]nce the moving party has met its initial burden of production, the burden shifts to the nonmoving party to establish that there is a triable issue of fact." Greenwood Tr., 938 P.2d at 1149. If the nonmoving party fails to meet this burden, summary judgment for the moving party should be granted. Casey, 923 P.2d at 366.

         ¶ 11 In reviewing an order granting summary judgment, we give the nonmoving party the benefit of all favorable inferences that may reasonably be drawn from the undisputed facts, and all doubts must be resolved against the moving party. Brodeur v. Am. Home Assurance Co., 169 P.3d 139, 146 (Colo. 2007).

         III. Analysis

         ¶ 12 On appeal, Martinez raises two contentions. First, he contends that damage to his basement and personal property was not caused by "surface water." Second, he contends that, even if the water was surface water, it lost that character when it entered the window wells. Thus, Martinez argues that his policy did not bar coverage as a matter of law and that, accordingly, the district court erred in granting American Family's motion for summary judgment.

         ¶ 13 We note as a preliminary matter that Martinez's various versions of the events at issue changed over time.

         ¶ 14 Initially, on August 22, 2013, prior to the initiation of this lawsuit, Martinez told an American Family claims investigator that

about a foot or two of hail . . . fell on the ground and fell into my window wells. [O]bviously the hail . . . seeped through the window . . . as it was melting, [and] that caused the water to come through the window and it flooded my basement out.

         ¶ 15 However, in his complaint, filed on February 6, 2015, Martinez alleged that his home

incurred accidental direct physical loss as a result of a severe hail and rainstorm. The hail was so heavy it filled the window wells not allowing rainwater to drain. As a result, the rainwater that went directly into the window wells could not drain and entered the [home] through the windows. The rain did not touch the ground and was above the surface of the ground at all times before entering into the [home].

         ¶ 16 Thus, contrary to his initial claim, Martinez appeared to allege that the melted hail did not damage his home, but that rain on top of the hail did so.

         ¶ 17 Nine months after filing his complaint, in an affidavit filed with his response to American Family's motion for summary judgment, Martinez further elaborated on his more recent account.[1] In his affidavit, Martinez averred as follows:

On August 3, 2013 my home was hit by a hailstorm and rainstorm. The hail was so heavy that it filled the window wells, not allowing rainwater to drain. I also believe the gutters filled with hail so that rainwater ran off the roof and directly into the window wells. As a result, rainwater that fell from the sky and ran off the roof went directly into the window wells and could not drain. The rainwater never touched the ground and was never on the surface of the ground before entering my home and causing damage.

         ¶ 18 On appeal, Martinez reasserts the version of events contained within his complaint and affidavit. American Family argued below, and argues now on appeal, that, under any version of events alleged by Martinez, his insurance policy barred coverage as a matter of law.[2] For the reasons set forth below, we agree with ...

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