Poulsen v. Farmers Insurance Exchange

2016 UT App 170

THE UTAH COURT OF APPEALS

ANNALEE POULSEN AND TROY POULSEN,
Appellants,
v.
FARMERS INSURANCE EXCHANGE,
Appellee.

Opinion
No. 20150498-CA
Filed August 4, 2016

Fourth District Court, Spanish Fork Department
The Honorable M. James Brady
No. 140300091

Denver C. Snuffer Jr. and Steven R. Paul, Attorneys
for Appellants
S. Grace Acosta and Alisha Giles, Attorneys
for Appellee

JUDGE MICHELE M. CHRISTIANSEN authored this Opinion, in
which JUDGE STEPHEN L. ROTH and SENIOR JUDGE JUDITH M.
BILLINGS concurred.1

CHRISTIANSEN, Judge:

¶1 This case requires us to consider whether an insurance
policy covered water damage to a house without a complete
roof. We affirm the district court’s summary judgment, which
rested on the conclusion that the policy did not provide such
coverage.

1. Senior Judge Judith M. Billings sat by special assignment as
authorized by law. See generally Utah R. Jud. Admin. 11-201(6).
Poulsen v. Farmers Insurance Exchange

BACKGROUND

¶2 Annalee Poulsen and Troy Poulsen purchased a
homeowner’s insurance policy from Farmers Insurance
Exchange to cover their primary residence. The policy generally
excluded from coverage water intrusion into the house with
certain exceptions outlined in a limited water coverage
provision, which we refer to as the LWC Provision:

We provide limited coverage for direct physical
loss or damage to covered property from direct
contact with water, but only if the water results
from:
(1) the build-up of ice on portions of the roof or
roof gutters on a building structure;
(2) hail, rain, snow, or sleet entering through an
opening in the roof or wall of a building
structure only if the opening is first caused by
damage from the direct force of the following:
i. fire;
ii. lightning;
iii. explosion (other than nuclear explosion);
iv. riot or civil commotion;
v. aircraft or vehicles;
vi. vandalism or malicious mischief;
vii. collapse of a building structure or
structural part of the building structure;
viii. falling objects; or
ix. windstorm.

¶3 In short, and as relevant to these facts, the insurance
policy did not cover water damage unless the water entered
through an opening in the roof caused by a windstorm. The
LWC Provision further specified that temporary coverings were
not to be considered as roofs, in a clause we refer to as the
Temporary-Roof Exception:

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Poulsen v. Farmers Insurance Exchange

The foregoing specified causes of loss are subject to
the terms and limitations set forth in Section I . . . ,
for any such specified cause of loss or extension of
coverage. A roof or wall does not include a temporary
roof or wall structure or any kind of temporary tarp,
sheeting or other covering.

(Emphasis added.)

¶4 In September of 2013, the Poulsens, with the help of their
friends and neighbors, began replacing the roof shingles on their
house. They removed the old shingles and an underlayment of
black felt tar paper, exposing the plywood deck. The Poulsens
then installed the new ice and water shield (the IWS) and
underlayment. As the Poulsens installed the last two rolls of the
underlayment, a sudden and severe storm arrived, bringing with
it ‚gusting winds and torrential rains.‛ The storm winds ripped
the underlayment off the roof, allowing the rain to penetrate the
house and damage both the structure and the Poulsens’ personal
property. The Poulsens filed an insurance claim, which Farmers
denied.

¶5 The Poulsens then brought suit against Farmers, alleging
breach of contract, bad faith, intentional infliction of emotional
distress, fraud, and estoppel. Farmers filed a motion seeking
summary judgment on the ground that the Temporary-Roof
Exception applied because the plywood, IWS, and underlayment
layers amounted to only a temporary roof. The Poulsens
opposed that motion and submitted an expert witness affidavit.
In the affidavit, their expert witness opined that the
underlayment and IWS would have prevented water from
entering the house had the windstorm not damaged them. The
expert further explained that, because these two layers were
intended to be permanently installed on the house, the covering
was not a temporary roof or other covering. Finally, the expert
stated that ‚underlayment without shingles is not a complete

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roofing system, neither are shingles without . . . underlayment a
complete roofing system per code. It takes both components to
make the roofing system resistant to high wind, snow, ice and
water.‛

¶6 The district court ruled that the insurance policy did not
provide coverage for the house because, at the time of the storm,
‚there was no ‘roof’ as contemplated by the policy.‛ Specifically,
the district court stated that the combination of plywood, IWS,
and underlayment ‚is not a roof at all‛ and that these
components ‚constitute*d+ only ‘other coverings’ until such time
as shingles are installed.‛ Because the LWC Provision only
insured against water damage if the water entered through an
opening in the roof created by a windstorm, the district court
concluded that the absence of any roof at the time of the
windstorm was fatal to the Poulsens’ claims.2 As a result, the

2. We note that the district court’s summary judgment order was
based on the lack of a roof rather than the temporary nature of
the roof as had been urged by Farmers’ motion for summary
judgment. Therefore, this basis for summary judgment had not
been presented to the district court. However, the Poulsens did
not and do not contend that it was improper for the court to
grant summary judgment on a basis not argued by Farmers.
The Poulsens had argued that the Temporary-Roof
Exception did not exclude the combined plywood, IWS, and
underlayment from the LWC Provision’s limited extension of
insurance coverage, because those were permanent components
of a roof. But neither party asked the district court to consider
whether a partially completed roof qualified as a roof so as to
trigger the LWC Provision in the first place. Consequently, the
district court never considered whether the insurance policy’s
use of the word ‚roof‛ included incomplete roofs, i.e., whether
the LWC Provision still had application even in the face of the
court’s determination that the roofing system was incomplete.
(continued…)

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Poulsen v. Farmers Insurance Exchange

district court granted summary judgment to Farmers, but denied
Farmers’ request for an attorney fees award. The Poulsens
appeal.

ISSUES AND STANDARDS OF REVIEW

¶7 The Poulsens contend that the district court erred by
concluding that the plywood, IWS, and underlayment did not
constitute a roof for purposes of coverage. They further contend
that the district court erred by concluding that the component
parts covering their house at the time of the severe storm
amounted to only a temporary roof. And the Poulsens contend
that the district court erred by improperly resolving material
factual disputes before concluding that the insurance policy did
not cover their house due to its condition on the day of the
storm.

¶8 Summary judgment is only appropriate when there are no
genuine issues of material fact and the moving party is entitled
to judgment as a matter of law. Utah R. Civ. P. 56(a); Jones v.
Farmers Ins. Exch., 2012 UT 52, ¶ 6, 286 P.3d 301. Accordingly, we
review a district court’s grant of summary judgment for
correctness, affording no deference to the court’s legal
conclusions. Basic Research, LLC v. Admiral Ins. Co., 2013 UT 6,
¶ 5, 297 P.3d 578. When contract provisions are clear and
complete, the meaning of the contract can appropriately be
resolved by the district court on summary judgment. See id. ‚The
interpretation of a contract is a question of law that is reviewed
for correctness, giving no deference to the district court.‛ Id.

(…continued)
The district court’s order thus reflects its unchallenged belief that
the incomplete nature of the roofing system precluded coverage
under the policy.

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ANALYSIS

¶9 Utah has a longstanding commitment to ‚[t]he principle
that ‘insurance policies should be construed liberally in favor of
the insured and their beneficiaries so as to promote and not
defeat the purposes of insurance.’‛ United States Fid. & Guar. Co.
v. Sandt, 854 P.2d 519, 521 (Utah 1993) (quoting Richards v.
Standard Accident Ins. Co., 200 P. 1017, 1020 (Utah 1921)). ‚*I+n
case of ambiguity, uncertainty, or doubt, the terms of an
insurance contract will be construed strictly against the insurer
and in favor of the insured, and . . . the insured is entitled to the
broadest protection that he could reasonably believe the
commonly understood meaning of its terms afforded him.‛ P.E.
Ashton Co. v. Joyner, 406 P.2d 306, 308 (Utah 1965). ‚It follows
that ambiguous or uncertain language in an insurance contract
that is fairly susceptible to different interpretations should be
construed in favor of coverage.‛ Sandt, 854 P.2d at 522.

I. Whether There Was a Roof

¶10 The Poulsens first contend that the district court
erroneously determined that the plywood, IWS, and
underlayment did not constitute ‚a ‘roof’ under the Farmers
insurance policy, as a matter of law.‛ They assert that the LWC
Provision ‚contrasts ‘roof’ with ‘wall’‛ such that any ‚part of
[the] structure on top of the walls‛ is a roof and any ‚part of
[the] structure under the roof‛ is a wall.3 Thus, in the Poulsens’

3. The LWC Provision extended insurance coverage when water
entered the house ‚through an opening in the roof or wall of a
building structure only if the opening is first caused by damage
from the direct force of *a+ windstorm.‛ (Emphasis added.) The
windstorm tore a hole or opening in the underlayment layer but
apparently did not create any holes in the plywood layer.
Because the district court concluded that component layers did
(continued…)

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view, the plywood, IWS, and underlayment constituted a roof
within the meaning of the LWC Provision.

¶11 The Poulsens concede that, at the time of the windstorm,
this ‚roof *was+ in a state of partial completion‛ due to the
absence of shingles, but they argue that the LWC Provision
‚does not say anything about the state of completion.‛ The
Poulsens essentially argue that the presence of a roof, albeit an
incomplete one, entitled them to coverage under the LWC
Provision because the rain ‚enter*ed+ through an opening in the
roof . . . caused by damage from the direct force of‛ the
windstorm.

¶12 We construe language in an insurance policy in favor of
coverage when a crucial term is ‚fairly susceptible to different
interpretations.‛ See Sandt, 854 P.2d at 522. But the word ‚roof‛
in such a policy is not fairly susceptible to interpretation as
meaning an incomplete roof.

¶13 Layers of plywood, IWS, and underlayment covered the
Poulsens’ house at the time of the windstorm. The Poulsens
accept that this roof was only partially complete due to the lack
of shingles. And the Poulsens’ memorandum in opposition to
summary judgment included an affidavit from their expert
witness explaining that the ‚underlayment without shingles is
not a complete roofing system‛ because ‚*i+t takes both
components to make the roofing system resistant to high wind,
snow, ice and water.‛ On appeal, the Poulsens do not identify
any authority suggesting that component parts of a roof that

(…continued)
not constitute a roof at all, it did not address whether the
uncompromised nature of the plywood layer meant that the
water did not in fact enter the house through a windstorm-
created opening.

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together fall short of a complete roofing system could fairly be
considered a ‚roof‛ for purposes of a homeowner’s insurance
policy. Nor do they point to any authority to the effect that an
insured ‚could reasonably believe the commonly understood
meaning‛ of the word ‚roof‛ in an insurance policy
encompassed an incomplete roof that was unable to resist wind,
snow, ice, and water.4 See P.E. Ashton Co. v. Joyner, 406 P.2d 306,
308 (Utah 1965) (holding that ‚the insured is entitled to the
broadest protection that he could reasonably believe the
commonly understood meaning of [the terms used in an
insurance policy+ afforded him‛). Thus, although we are bound
to construe ambiguities in an insurance policy in favor of
coverage, we are unable to identify any uncertainty in the LWC
Provision’s use of the word ‚roof‛.

¶14 The Poulsens have not shown that the insurance policy’s
use of the word ‚roof‛ was fairly susceptible to interpretation as
including incomplete roofing systems. We therefore hold that
the district court did not err by concluding that the layers of

4. Cf. Gutkowski v. Oklahoma Farmers Union Mut. Ins. Co., 2008 OK
CIV APP 8, ¶¶ 10–11, 176 P.3d 1232 (holding that ‚a roof is a
unified product comprised of all its component parts and
materials, including felt [underlayment], flashing, sheathing
(decking), valleys, nails, caulk, drip edges, and shingles‛ and
therefore rejecting an insurance company’s argument that,
because asphalt shingles were a second and separate roof from
the layers beneath them, it was only obligated to pay for hail
damage to the ‚upper roof‛ made of asphalt shingles); Dewsnup
v. Farmers Ins. Co. of Or., 239 P.3d 493, 499 (Or. 2010) (stating that
‚a roof should be sufficiently durable to meet its intended
purpose: to cover and protect a building against weather-related
risks that reasonably may be anticipated‛ and that ‚the meaning
of the term ‘roof’ is sufficiently plain that we need go no further
to define its meaning‛).

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plywood, IWS, and underlayment did not constitute a roof
within the meaning of the insurance policy.

II. Whether the Roof Was Temporary

¶15 The Poulsens also contend that the district court erred by
concluding that the plywood, IWS, and underlayment
constituted only a temporary roof or temporary covering. They
further contend that the district court erred by weighing
competing evidence as to whether the elements in place at the
time of the windstorm were temporary. Specifically, they argue
that the district court ‚disregarded testimony that the home was
not covered by any tarps or other temporary materials during
the severe rain storm.‛

¶16 Both of these contentions misread the district court’s
stated rationale for granting summary judgment to Farmers. It is
true that the court stated that the plywood, IWS, and
underlayment ‚constitute*d+ only ‘other coverings’ until such
time as shingles are installed.‛ But the court did not rule these
layers made up a temporary roof that the Temporary-Roof
Exception would exclude from the LWC Provision’s coverage.
Rather, the court ruled that no roof, temporary or permanent,
existed at the time of the windstorm, and thus that the LWC
Provision did not come into play at all.

¶17 The insurance policy proper did not cover damage caused
by water entering the Poulsens’ house. As relevant here, the
LWC Provision modified that baseline rule to cover such
damage if the water entered through an opening in the roof
caused by a windstorm. And the Temporary-Roof Exception
limited the modification by providing that the LWC Provision
did not apply if the windstorm-created opening was in a
temporary roof.

¶18 The district court acknowledged that both parties had
‚asked the court to rule on whether the plywood,

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[underlayment,] and IWS constitute a temporary or permanent
roof,‛ i.e., whether the windstorm-created opening was in a
temporary roof such that the LWC Provision was negated by the
Temporary-Roof Exception. But the court explained that, ‚*u+ntil
the roof is complete, there are only individual components.‛ As
a result, it concluded that these components were ‚not a roof at
all‛ and that ‚there was no ‘roof’ as contemplated by the policy.‛
In essence, the court determined that the absence of a roof
foreclosed any analysis of the LWC Provision and the
Temporary-Roof Exception because, if there was no roof, water
could not have entered through a windstorm-created opening in
the roof.

¶19 Because the Poulsens’ second and third contentions
challenge conclusions that the district court either did not make
or which were not part of its ratio decidendi, we need not and do
not address them further.

CONCLUSION

¶20 The Poulsens have not demonstrated that the insurance
policy’s use of the word ‚roof‛ is ‚fairly susceptible‛ to
interpretation, see United States Fid. & Guar. Co. v. Sandt, 854 P.2d
519, 522 (Utah 1993), as encompassing a roofing system ‚in a
state of partial completion.‛ Accordingly, we see no error in the
district court’s conclusion that, at the time of the windstorm, the
Poulsens’ house had ‚no ‘roof’ as contemplated by the
[insurance] policy.‛ Because this conclusion was a sufficient
basis for the district court to grant summary judgment to
Farmers, we decline to address the Poulsens’ other challenges.

¶21 Affirmed.

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