Background
190 E. 15th Avenue, LLC owned a vacant rental property that suffered extensive water damage in January 2020. Its maintenance supervisor found water coming through the ceiling and identified a split pipe between the second and third floors. State Farm’s inspector concluded the pipe had frozen, and State Farm denied the resulting insurance claim.
The property owner sued State Farm for breach of the insurance policy. At trial, the owner principally argued that an unauthorized person had turned the water back on, allowing water to flow through a pipe that had previously broken. Alternatively, it argued that a frozen pipe caused the loss but that the policy’s freezing exclusion did not apply. The jury found for State Farm, and the trial court denied the owner’s post-verdict motions.
The Court’s Holding
The Tenth District affirmed. It held that the jury’s finding that the owner had not proved a covered loss caused by discharge, leakage, or overflow from a frozen pipe was not against the manifest weight of the evidence.
Although State Farm’s inspector testified that freezing damaged the pipe, the owner offered evidence supporting its theory that the property had been winterized, heat had been maintained, and the water service may have been restored without permission. No evidence established how the pipe actually broke. The jury therefore could reasonably conclude that the owner had not proved the required cause of loss by a preponderance of the evidence.
Because the owner failed to establish a covered loss under its frozen-pipe theory, the court dismissed as moot its challenge to State Farm’s proof of the policy exclusion. The insurer had no burden to prove an exclusion unless the owner first proved coverage.
Key Takeaways
- An insured generally bears the initial burden to prove both a loss and coverage under the policy.
- Conflicting evidence about the cause of water damage can support a jury’s finding that the insured did not prove a covered loss.
- An insurer’s burden to prove a coverage exclusion does not arise when the insured fails to establish coverage first.
Why It Matters
The decision underscores the importance of proving the precise cause of a property loss, especially where coverage depends on whether damage resulted from a frozen pipe or another event. Evidence that may undermine an exclusion can also leave the insured unable to prove its own causation theory.
For coverage litigants, the case also illustrates that appellate courts will defer to a jury’s resolution of competing inferences unless the verdict creates a manifest miscarriage of justice.