Last Updated: Friday, April 14, 2006 1:45 PM CDT
Appeals Court backs insurance company in water damage claim
By Daily News staff
The Third District Court of Appeals in Wausau has ruled in favor of an insurance company in a case involving a water damage claim associated with an unoccupied home in Lac du Flambeau.
According to court records, the home suffered water damage sometime between November 2002 and January of 2003 after a propane tank heating the home ran empty, causing pipes to freeze and burst.
Continental Western Insurance Company later filed suit asking for a determination that its policy did not cover the losses of its policyholders, Paul Reid LLP, GPS Inc. and Eliason and Eliason Inc.
The primary issue in the case was whether the policyholder had “done its best,” as set forth in the terms of the insurance policy, to maintain heat in the house.
If a jury determined that the policyholder had “done its best” the insurance company would be liable for the damages.
Following a trial in Vilas County Circuit Court in February of 2005, a jury determined that the policyholder had not done its best to maintain heat (despite evidence that the policyholder requested propane service continue on an automatic-fill basis) and ordered judgment for the insurance company.
Following the verdict the policyholder appealed arguing that the “do-your-best” policy language was ambiguous or illusory and therefore the policy should be construed in favor of coverage.
The court of appeals, however, ruled the language contained in the policy is no more ambiguous than other terms used in insurance policies such as negligence or diligent.
Also, the court rejected the policyholder's argument that the insurance company will always determine that that the insured did not “do its best” and deny coverage.
“That Continental denied coverage here does not mean it will deny coverage in every instance,” the court wrote.
Judge Robert E. Kinney of Oneida County presided over the case.
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