On April 30, 2021, Chief Judge K. Michael Moore of the U.S. District Court, Southern District of Florida, granted our motion for summary judgment in a first-party insurance property damage claim. The case had initially been filed in Florida state court but was removed to federal court.

The case involved a water backup into a home because of clogged drain lines. National Specialty Insurance Company (“NSIC”) paid the full $10,000 under a Limited Water Damage Endorsement contained in the policy, along with additional mold remediation costs. Plaintiffs were seeking approximately $156,000, in addition to the $10,000 already paid for tear out and rebuild through the foundation of most of the living areas of the home, in order to access and replace the drain lines. Plaintiffs retained a plumber and a public adjuster to provide expert opinions as to the necessity of the repairs to the plumbing system, the necessity of accessing the pipes via destruction of portions of the home, and the costs of performing all of the work. Both experts executed affidavits stating their opinions that the pipes had to be replaced due to unspecified Florida building code requirements. Based upon their experts’ contentions, Plaintiff’s counsel argued that ordinance and law coverage under the policy should apply as well.

While the cost of the actual repair of leaking or clogged plumbing is excluded in all insurance policies, the costs to tear out (and later build back) parts of the structure in order to access the pipes to make the repair are covered under the policy. However, NSIC’s limited water damage endorsement places a limit on coverage for damages due to a plumbing loss. This endorsement has led to litigation over whether the limit applies only to resulting damaged caused directly by water, or whether it applies to all damages, including build back and rebuild costs.

Firm President Brian Henry and Associate William Mims moved for summary judgment in November 2020. On April 30, 2021, Judge Moore ruled that NSIC had done all it was required to do under the policy by paying the $10,000 for water damage, along with the mold costs. The Court found that the limited water damage endorsement does limit damages for tear out and build-back, was not ambiguous, and that Plaintiff was not entitled to additional benefits under law and ordinance coverage. The case is Yanes et al v. National Specialty Ins. Co., Case Number 1:20-cv-21179-KMM, in the U.S. District Court for the Southern District of Florida. This follows on a similar victory the firm obtained in Alonso v. National Specialty Ins. Co., case number 2019-00181690-CA-01, in the Circuit Court of Miami-Dade County.