Brown v. Mid-Century Ins.





















Filed 4/2/13 Brown v. Mid-Century Ins. CA2/7

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>NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115>.





IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA



SECOND
APPELLATE DISTRICT



DIVISION
SEVEN




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LEROY BROWN et al., Plaintiffs and Appellants, v. MID-CENTURY INSURANCE COMPANY, Defendant and Respondent.

B238357 (Los Angeles County Super. Ct. No. BC433800)

APPEAL from
a judgment of the Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County, Richard Rico, Judge.
Affirmed.

Donna Bader and Donahue &
Horrow, Michael B. Horrow, for Plaintiffs and Appellants.

Stone & Hiles, David L.
Schaffer, and Greines, Martin, Stein & Richland, Robert A. Olson and
Gary J. Wax, for Defendant and Respondent.

______________________

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INTRODUCTION

Leroy and
Terrie Brown appeal the trial court’s judgment in favor of defendant and
respondent Mid-Century Insurance Company on the Browns’ claims for breach of
contract and breach of the implied covenant
of good faith and fair dealing. The
trial court concluded that the Browns’ claim for water damage caused by a
broken pipe in their house was not covered under their Mid-Century policy and
that Mid-Century was entitled to summary judgment. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. >The Water

On or about
February 18, 2009 the
Browns began observing condensation on the windows of their three-story,
split-level home and on the drywall around the windows. There was moisture from the windowsills
running down the walls and mildew on some of the windows and walls. When they cleaned the condensation off the
windows, it returned the next day. About
a week later, the Browns began noticing mold forming around the inside of their
windows and on the walls in the living room and kitchen, “developing everywhere
simultaneously.” Every room that had a
window had mold or mildew.

On March 17
or March 18, 2009 Leroy Brown’s brother, Robert Brown, crawled under the house
and observed moisture. Robert Brown
testified at his deposition that he shined a flashlight into the crawl space
and observed damp soil. Leroy Brown
testified that he was not able to see the source of the water, nor did he hear
anything like water spraying. After his
brother came out of the crawl space, Leroy Brown shut off the water to the
house, told his wife about the problem, and then either he or his wife called
the insurance agent.

On March
18, 2009 the Browns hired a plumber, Michael Lewis, to find and fix the
leak. Leroy Brown took Lewis to the
laundry room, where there was moisture on the walls. Lewis testified in his deposition that when
Mr. Brown took him to a hallway and the laundry area, he could see condensation
and moisture on the walls. Lewis told
Mr. Brown that “from experience, it seemed
like . . . he had a hot water leak. And because his home was on slab, it probably
was underneath the cement.” Lewis did a
couple of tests and determined that it was hot water. Lewis testified that he told Mr. Brown
that “the leak was on the hot water side.
And in that situation, I told him that when you have a slab house, that
sometimes you can’t – you can’t find the leak because water [has] a way of
traveling. The leak could have been
anywhere in the bottom floor of the house, and because it already had made a
path, the water was just trickling, you know, wherever it was coming out
at. And I told him, pretty much because
we had the most damage in the laundry room, that nine times out of ten, it was
going to be in the laundry room.”href="#_ftn1"
name="_ftnref1" title="">[1]

Lewis also
went into the crawl space under the house where he encountered mud and
discovered a pool of water that appeared “pretty deep.” While Lewis was in the crawl space, Mr. Brown
turned on the water “very low” so Lewis could determine where the water was
coming from. Lewis observed that water
was coming into the crawl space from the backside of a vertical pressurized
copper hot water line attached to the hot water manifold.

Lewis then
went into the laundry room and began drilling with a jackhammer and searching
for the hot and cold water manifolds, with the water system still off. When he located the hot water manifold, he “got
the pipe exposed and [saw] the leak.”
With the water turned on “very low,” Mr. Brown went back into the house
and observed “water coming from an open hole in the pipe,” which “was just a
drip out at that point, just enough to show me where the water was coming
out . . . the back side of the pipe.” The water was coming out at “a slow pace,
because [Leroy Brown] did not turn it on full blast.”

The Browns
notified Mid-Century of the problem.

B. >The Policy

Mid-Century
had issued the Browns a “Farmers Next Generation Homeowners Policy” providing
them with first party property damage coverage for structural damage in the
amount of $404,000, with a $1,000 deductible.
The policy insured some, but not all, of the Browns’ property and stated
“[c]overage is dependent upon both the (1) cause of the loss or damage and (2)
type of loss or damage.” The policy
listed certain types of loss or damage that were not covered under the policy,
“however caused,” including “loss or damage consisting of, composed of or which
is water damage.” The policy included an
“extension of coverage” that provided “limited” water damage coverage “for
direct physical loss or damage to covered property from direct contact with
water, but only if the water results from . . . [¶] (4) a sudden and accidental discharge,
eruption, overflow or release of water . . . [¶] (i) from within any portion of: (a) a plumbing system.” SEQ CHAPTER h 1The policy described what was not included in the limited water damage
coverage: “A sudden and accidental
discharge, eruption, overflow or release of water does not include a constant
or repeating gradual, intermittent or slow release of water, or the
infiltration or presence of water over a period of time. We do not cover any water, or the
presence of water, over a period of time from any constant or repeating
gradual, intermittent or slow discharge, seepage, leakage, trickle, collecting
infiltration, or overflow of water from any source . . . whether known or
unknown to any insured.”

For mold, the
policy stated: “We do not insure loss or
damage consisting of, composed of, or which is fungi. Further, we do not insure any
remediation.” The policy also contained
the following exclusion: “‘We do not
insure loss or damage directly or indirectly caused by, arising out of or
resulting from fungi or the discharge, dispersal, migration, release or escape
of any fungi. Further, we do not insure
any remediation . . . . ” The policy defined fungi as “any part or form
of fungus, fungi [or] mold . . . .”

C. >The Investigation

On March 20, 2009 Mid-Century claim
representative Seann Clifford inspected the Browns’ home and took photographs
of the laundry room and the adjacent crawlspace. Clifford “observed pervasive, visible mold
and moisture on the interior walls of each level” of the Browns’ home. Clifford stated in his declaration that Mr.
Brown took him to the laundry room and showed him “the horizontal section of
the piping which had been leaking. The
section, which was part of a pressurized hot water line attached to the hot
water manifold, was heavily corroded near a 90 degree angle bend. The horizontal section of the pipe below the
bend had been embedded in the room’s concrete slab foundation.” Clifford inspected the pipe and “observed and
photographed a hole in the pipe approximately 1/8 inch in diameter in the
section of pipe that had been embedded in the room’s concrete foundation,” and
saw that the “hole was facing down.”

Mid-Century then assigned the
Browns’ claim to another claims representative, Rosie Acevedo, who inspected
the home the next day, March 21, 2009.
Acevedo observed mold on the walls in the laundry room, the office, the
second floor living room, the kitchen, and the third floor bathrooms, and on
clothing in a room next to one of the bathrooms. The Browns told Acevedo, in recorded
statements, that they began noticing evidence of a water leak, condensation on
the windows, and mold, approximately one month earlier. The Browns also told Acevedo that the
condensation stopped forming on the windows when they turned off the hot water
on March 17, 2009.

On March 23, 2009 Mid-Century
retained American Leak Detection to inspect the house and determine whether
there were any more leaks in the plumbing system. American Leak determined that the interior
plumbing system was “‘sound’” and that there were no other leaks.

On March 27, 2009 Mid-Century
denied the Browns’ claim. Acevedo wrote the Browns and stated that
Mid-Century’s “investigation revealed that the pipe in the wall of the laundry
room that runs into your crawl space has been leaking water into your crawl
space over a period of time causing condensation and mold growth through out [>sic] your home. Unfortunately, this loss is uninsured or
excluded from coverage under your policy.”
Acevedo determined that “the cause of loss was wear and tear which
caused a hole in the pipe, allowing water to leak into the crawl space over a
period of time.” Acevedo then quoted at
length various provisions in the policy, including the extension of limited
water coverage for “sudden and accidental discharge, eruption, overflow or
release of water” from a plumbing system or household appliance.

D. >The Action

The Browns
filed this action on March 16, 2010, alleging causes of action for breach of
written contract, breach of the implied covenant of good faith and fair
dealing, negligence, fraud, unfair competition, and declaratory relief. The Browns allege that their “home was
damaged when a plumbing pipe burst causing Plaintiffs substantial loss.” On May 20, 2010 the Browns dismissed their
causes of action for negligence, fraud, unfair competition, and declaratory
relief, leaving only their causes of action for breach of contract and breach
of the implied covenant. Mid-Century
answered on June 17, 2010.

E. >The Motion for Summary Judgment

On August
5, 2011 Mid-Century filed a motion for
summary judgment or in the alternative for summary adjudication on the
Browns’ claims for breach of contract, breach of the implied covenant of good
faith and fair dealing, and for punitive damages. Mid-Century argued that it did not breach the
policy or act in bad faith because the water damage in the Browns’ home was
caused by a long-term, gradual, incremental discharge or release of water, and
not by a sudden and accidental discharge or release of water. Mid-Century also argued that its
interpretation of the policy was reasonable and that it did not engage in any
conduct that could justify a claim for punitive damages.

In support
of its motion Mid-Century submitted the declarations of Clifford and Acevedo,
as well as an expert declaration by Claude LeBlanc. LeBlanc is a licensed plumbing contractor
with 33 years of experience investigating, diagnosing, repairing, and replacing
“more than 500 broken pressurized hot water lines in residential plumbing
systems,” with expertise in “leak detection, duration, and causation and
plumbing repair and design.” LeBlanc
stated that on June 14, 2011 he inspected the 24-inch section of pipe that had
been removed from the Browns’ house and found “a jagged hole which measured
approximately 1/8 inch in diameter . . . surrounded by
corrosion.” LeBlanc also reviewed 89
color photographs taken by Clifford depicting “the failed section of pipe
before the section was cut out and preserved,” which showed that “the failed
section was encased in the concrete slab floor of the home’s laundry room which
was adjacent to a crawl space that had a dirt floor under the home’s second
floor.”

LeBlanc noted
from the photographs that “the portion of the pipe embedded in concrete was not
wrapped with a plastic protective sleeve,” in violation of the California
Plumbing Code, California Code of Regulations, title 24, part 5, sections 313.2
and 313.10.1.href="#_ftn2" name="_ftnref2"
title="">[2] According to LeBlanc, these regulations
require “copper pipes embedded in concrete to be wrapped with a plastic sleeve
which serves to protect the pipe from coming into direct contact with the
corrosive metallic elements present in concrete,” because otherwise “[t]hese
corrosive elements will gradually cause corrosion damage to the exterior wall
of a copper pipe.” LeBlanc gave his
opinion that “the hole in the section of copper pipe” he inspected “had formed
as a result of ordinary wear and tear to the pipe which corroded because it had
been defectively embedded into concrete without the required protective
sleeve. . . . Based on
the heavy corrosion evident on the exterior of the pipe during my inspection
and the photographs I reviewed depicting the pipe before it was removed, it was
obvious the section which failed had not been sleeved at the time it was
installed.” LeBlanc stated that the
pipe’s “direct contact with these corrosive metallic elements” caused a “slow,
gradual and incremental deterioration of the pipe’s outer
wall . . . near the pipe’s bend,” which in turn “caused a
pinhole-sized opening in the pipe to form through which hot water slowly
dripped out.” LeBlanc added that the
deterioration process then accelerated because (1) hot water has “higher levels
of corrosive minerals than cold water” (because it is heated in a metal
heater), (2) hot water escapes “under 55 to 80 p.s.i. of water pressure,” and
(3) “the water pressure striking the concrete” creates friction.

LeBlanc
opined that the “hot water which first escaped from the pipe was in the form of
drips into the concrete which surrounded the pipe. As the size of the hole slowly increased,
this dripping gradually turned into leakage.
Eventually, the escaping water migrated to the adjacent dirt floor of
the nearby crawlspace and slowly pooled there.
This unabated continuous dripping and leaking lasted at least five
months until the leak was discovered and the water turned off on March 17,
2009.” LeBlanc also reviewed water bill
and service records for the home, compared them to the previous year, and
concluded that the Browns’ monthly water consumption increased during the
period water was escaping from the pipe and then decreased to normal levels
after the repair.

The Browns
opposed the motion and submitted an expert declaration by Harvey Kreitenberg, a
licensed journeyman plumber whose “primary occupation is a forensic consultant
plumber.” Kreitenberg also examined and
photographed the pipe section and found two holes, one approximately 3/32 inch
by 1/8 inch and one approximately 1/32 inch.
Kreitenberg agreed that the pipe “failed due to a yet to be identified
form of corrosion.” Kreitenberg
concluded that what had occurred “can be best described as a sudden breach of
the pipe. This type of corrosion failure
mechanism usually produces a sudden breach in the wall of the pipe, creating a
non water tight condition. As the
corrosion process continues, the size of the breach increases, ultimately
producing a mist, stream and spray of water through the breach. It would have taken a mere fraction of [a]
second (a ‘nano’ second’ [sic])
between the water tight and non water tight condition of the pipe in the Brown
residence, which is the breach in the pipe.”href="#_ftn3" name="_ftnref3" title="">[3] Kreitenberg concluded that the pipe “failed
suddenly, and ultimately a spray or stream (not drips) of hot water shot
through the holes in the pipe out into the area of the house where the pipe was
located,” and that “[h]ot water would have continued to spray and stream (not
drip) out the holes until the water line was shut off.”

F. >The Ruling

The trial
court granted Mid-Century’s motion for summary judgment, finding that none of
the evidence submitted by the Browns “creates a dispute of fact as to the cause
of the leak as set forth by Mid-Century’s expert.” The court found that Kreitenberg’s opinion
that “the pipe’s breach only took a faction of a second does not mean that
release of water was ‘sudden.’” The court
also noted that the Browns “do not dispute that the pipe leaked over a period
of one to two months, and that the leak was caused by corrosion which wore away
at the pipe,” and that the evidence presented by Kreitenberg “shows that the
release of water was a ‘gradual . . . release of
water . . . over a period of time,’ and not ‘a sudden
. . . discharge, eruption, overflow or release of water.’”

The trial
court entered judgment in favor of Mid-Century on November 3, 2011. Mid-Century gave notice of the entry of
judgment on November 8, 2011, and the Browns filed a timely href="http://www.fearnotlaw.com/">notice of appeal on January 6, 2012.

DISCUSSION

A. >Standard of Review

Rulings on
motions for summary judgment are reviewed de novo. (Buss
v. Superior Court (1997) 16 Cal.4th 35, 60; see Cole v. Town of Los Gatos (2012) 205 Cal.App.4th 749, 757
[“[b]ecause summary judgment can raise only questions of law, we review the
trial court’s ruling without deference”].)
“The standard of review is the same regardless of whether the trial
court grants or denies a summary judgment motion.” (Benson
v. Superior Court (2010) 185 Cal.App.4th 1179, 1184-1185.)

“‘“While
insurance contracts have special features, they are still contracts to which
the ordinary rules of contractual interpretation apply.”’” (Haynes
v. Farmers Ins. Exchange (2004) 32 Cal.4th 1198, 1204; see >Arce v. Kaiser Foundation Health Plan, Inc.
(2010) 181 Cal.App.4th 471, 499-500.)
“Interpretation of an insurance policy is a question of law and follows
the general rules of contract interpretation.”
(TIG Ins. Co. of Michigan v.
Homestore, Inc. (2006) 137 Cal.App.4th 749, 755; see Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18; >Whittaker Corp. v. Allianz Underwriters,
Inc. (1992) 11 Cal.App.4th 1236, 1238.) “The rules governing policy interpretation require us to
look first to the language of the contract in order to ascertain its plain
meaning or the meaning a layperson would ordinarily attach to it.” (Waller,
supra, 11 Cal.4th at p. 18.) The mutual intention of the parties governs
the interpretation of the policy, which is “inferred, if possible, solely from
the written provisions of the contract.”
(Ibid.) “‘The “clear and
explicit” meaning of these provisions, interpreted in their “ordinary and
popular sense,” unless “used by the parties in a technical sense or a special
meaning is given to them by usage,” controls judicial interpretation.’” (Ibid.;
see In re Insurance Installment Fee Cases
(2012) 211 Cal.App.4th 1395, 1409.)

B. >Breach of Contract

The Browns concede that
they had the burden (1) “of proving their water damage is covered under their
policy with Mid-Century,” and (2) “to present facts showing a ‘sudden release’
of water, causing damage to their home.”href="#_ftn4" name="_ftnref4" title="">[4] (See Aydin
Corp. v. First State Ins. Co. (1998) 18 Cal.4th 1183, 1191-1192.) The Browns do not argue that
Mid-Century failed to meet its initial burden on summary judgment to show that
the damage was not caused by a sudden discharge of water. They do not dispute that the evidence
Mid-Century presented regarding the gradual deterioration of the pipe, the
small size of the hole, and the existence of the effects of the water for at
least a month or two, satisfied Mid-Century’s initial burden on summary
judgment. The Browns contend that in response to Mid-Century’s
showing they “presented admissible evidence supporting the finding of a triable
issue on this fact.” We disagree.

1. There
was not “a sudden and accidental discharge, eruption, overflow or release of
water”

The Browns’
primary argument on appeal is that Kreitenberg created a triable issue of fact
by stating in his declaration in opposition to Mid-Century’s motion for summary
judgment that “the pipe burst suddenly—in a ‘nano-second,’ spraying water in
the crawlspace.” This testimony,
however, does not change the fact that the release of water, even if it
commenced with a nanosecond “breach in the wall of the pipe” and resulted in a
“mist, stream and spray,” was constant or
intermittent, and occurred over a period of “a month or two” (according
to the Browns) or five months (according to Mid-Century). Even if, as Kreitenberg testified, the pipe
“failed suddenly,” the water damage according to Kreitenberg resulted from hot
water “continu[ing] to spray and stream (not drip) out the holes until the
water line was shut off.” The Browns’
policy with Mid-Century did not cover such a “‘constant or
repeating . . . intermittent or slow release of water,’”
whether the release was a drip, spray, or stream.href="#_ftn5" name="_ftnref5" title="">[5] As the trial court recognized, “everybody
agrees,” even Kreitenberg, “that this was something that occurred over a period
of time.” Thus, whether the water leaked
or sprayed or streamed out of the hole(s) in the pipe, the water leaked,
sprayed, or streamed out constantly and gradually over time. Such a water discharge does not qualify as “sudden”
under the plain meaning of the terms of the Browns’ policy.

Nor does it
qualify as “sudden” under California law.
“‘Sudden’ has a temporal element and does not mean a gradual or
continuous discharge.” (>Standun, Inc. v. Fireman’s Fund Ins. Co.
(1998) 62 Cal.App.4th 882, 889; see Travelers
Casualty & Surety Co. v. Superior Court (1998) 63 Cal.App.4th 1440,
1455 [“the interpretation of ‘sudden’ must include a temporal component;
otherwise, the word is rendered mere surplusage”]; Shell Oil Co. v. Winterthur Swiss Ins. Co. (1993) 12 Cal.App.4th
715, 754 [“[w]e cannot reasonably call ‘sudden’ a process that occurs slowly
and incrementally over a relatively long time, no matter how unexpected or
unintended the process”].) In the context
of the phrase “sudden and accidental,” the word sudden “must, if it is to be anything more than a hiccup in front of the
word ‘accidental,’ convey a temporal meaning of immediacy, quickness, or
abruptness.” (ACL Technologies, Inc. v. Northbrook Property & Casualty Ins. Co.
(1993) 17 Cal.App.4th 1773, 1786.) Thus,
“whatever ‘sudden’ means, it does not mean gradual. The ordinary person would never think that
something which happened gradually also happened suddenly.” (Id.
at p. 1788.)

The nature
of the gradual water discharge from the Browns’ pipe (even if initiated by a
nanosecond breach in the wall of the pipe) and of the incremental effects of
the water on the Browns’ house precludes any finding that the discharge was
sudden. (See Freedman v. State Farm Ins. Co. (2009) 173 Cal.App.4th 957, 964
[“[g]iven the small size of the hole(s) through which the water leaked, and
given the extensive amount of water damage . . . , the leak
must have lasted a sufficiently long time, or stopped and started sufficiently
many times, to count as ‘continuous’ or ‘repeated’ under any reasonable
construction of those terms”]; Truck Ins.
Exchange v. Pozzuoli (1993) 17 Cal.App.4th 856, 860 [“[a]ny continuous
event, whether it be of 30 years’ or 2 months’ duration, is simply not
‘sudden’”].) A dishwater hose breaking
in mid-cycle, a water heater giving out and flooding a room, or an overflowing
toilet, is a sudden discharge of water.
(See, e.g., De Bruyn v. Superior
Court (2008) 158 Cal.App.4th 1213 [overflowing toilets sudden and accidental];
but see Cardio Diagnostic Imaging, Inc.
v. Farmers Ins. Exchange (2012) 212 Cal.App.4th 69, 71 [malfunctioning
toilet that failed to shut off water intake and overflowed because of blockage
in the sewer line was not covered because of exclusion for loss or damages
caused by water “that backs up or overflows from a sewer”].) A spray/stream/leak of water over several
months is not.

Kreitenberg’s
opinion that the nanosecond “breach in the pipe” converted the pipe from a
water-tight condition to a non-water-tight condition in an instant did not
create a factual issue regarding whether the release of the water was
sudden. Those courts that have
considered the theory espoused by Kreitenberg have rejected it. For example, in Saint Paul Surplus Lines Ins. Co. v. Geo Pipe Co. (Tex.Ct.App.
2000) 25 S.W.3d 900, the court stated:
“According to [the insured], the fact that the leak was not discovered
for a lengthy period of time does not negate the temporal suddenness with which
the breach occurred. This argument has
been described as the ‘metaphysical moment’ theory. Under the logic of this theory, every event
or condition not existing from the dawn of time would be considered ‘sudden’
because at one moment it did not exist and the next moment it did.” (Id.
at p. 905.) The court held that while
“the time of discovery does not control whether the discharge was sudden,” a
“discharge that continues over a lengthy period of time cannot be considered
‘sudden’ as a matter of law.” (>Ibid.)

Similarly,
in American Ins. Co. v. Fairchild
Industries, Inc. (E.D.N.Y. 1994) 852 F.Supp. 1173, affd. (2d Cir.
1995) 56 F.3d 435, the court rejected the insured’s “argument that the pipe
failure was ‘sudden’ despite the fact that the process leading to the crack was
a gradual one. It is apparently [the
insured’s] position that there was some metaphysical moment before which the
leak was not present. And thus, when the
leak finally manifested itself, it was an abrupt event.” (Id.
at p. 1182, fn. 18.) The court noted
that “[u]nder this type of reasoning, no event whatsoever could conceivably”
not be sudden. (Ibid.; see Federated Mutual
Ins. Co. v. Botkin Grain Co. (10th Cir. 1995) 64 F.3d 537, 540-541
[rejecting the insured’s argument that “the temporal quality ascribed to the word
‘sudden’ should be applied to the inception rather than the duration of the
pollution”]; SnyderGeneral Corp. v.
Century Indem. Co. (N.D.Tex. 1995) 907 F.Supp. 991, 1001 [“the
metaphysical moment principle,” which “suggests that every leak occurs suddenly
because there will always be an instant in time when a once nonexistent leak
‘suddenly’ develops,” would “read the temporal component of the term ‘sudden’
out of the Policy”], affd. in part and vacated in part on other grounds,
(5th Cir. 1997) 113 F.3d 536.)
And in Mesa Operating Co. v.
California Union Ins. Co. (Tex.Ct.App. 1999) 986 S.W.2d 749, the court
rejected the insured’s argument that salt water contamination from an
underground well “occurred suddenly because at one point in time the well was
whole and, an instant later, salt water breached the well and began escaping
into the aquifer.” (Id. at p. 757.)

A gradual
process, viewed through an electron microscope that can show physical changes
occurring in nanoseconds, can appear sudden at certain points in time. Given a small enough time interval, even a
slow gradual leak is sudden. There is
always a time, t₁, before the first water molecule breaches the
surface of a corroding pipe, and a time, t₂, after the first water
breaches the surface, such that the breach can appear sudden if t₂ -
t₁ is small enough. Such a
calculus, however, does not make a gradual release of water sudden. As the trial court stated, “[i]t was not a
sudden burst . . . unless you used ‘sudden’ to just explain
at one point in time there was no water, then there was water.” In concluding that Kreitenberg’s declaration
did not create a triable issue of material fact, the trial court properly
concluded that “the fact that the pipe’s breach only took a fraction of a
second does not mean the release of water was ‘sudden.’”

2.> The
efficient proximate cause doctrine does not apply to the Browns’ mold claim

The Browns
recognize that the policy did not include coverage for mold. The policy listed mold as one of 13 uninsured
types of loss or damage: “We do not
insure loss or damage consisting of, composed of or which is fungi.” The policy also listed mold as one of 35
excluded causes of loss or damage: “We
do not insure loss or damage directly or indirectly caused by, arising out of
or resulting from fungi or the discharge, dispersal, migration, release or
escape of any fungi.” The Browns argue
that their mold damage was covered “because it resulted from direct contact
with the abrupt and sudden discharge of water,” and under the efficient
proximate cause doctrine the sudden discharge of water produced the
condensation and, eventually, the mold.

The
efficient proximate cause doctrine, codified in Insurance Code section 530,href="#_ftn6" name="_ftnref6" title="">[6] provides that when “‘“a
loss is caused by a combination of a covered and specifically excluded risks,
the loss is covered if the covered risk was the efficient proximate cause of
the loss,” but “the loss is not covered if the covered risk was only a remote
cause of the loss, or the excluded risk was the efficient proximate, or
predominate cause.”’” (>De Bruyn, supra, 158 Cal.App.4th at p. 1216; see Sabella v. Wisler (1963) 59 Cal.2d 21, 31-32 [“‘[i]n determining
whether a loss is within an exception in a policy, where there is a concurrence
of different causes, the efficient cause—the one that sets others in motion—is
the cause to which the loss is to be attributed, though the other causes may
follow it, and operate more immediately in producing the disaster’”].) The efficient proximate cause doctrine “applies
only when two or more conceptually distinct perils combine to cause the
loss.” (Roberts v. Assurance Co. of America (2008) 163 Cal.App.4th
1398, 1409.) When “the evidence shows
the loss was in fact occasioned by only a single cause, albeit one susceptible
to various characterizations, the efficient proximate cause analysis has no
application.” (Ibid.)

The
efficient proximate cause doctrine does not apply to the Browns’ mold claim for
two reasons. First, the efficient
proximate cause doctrine applies when “‘“a loss is caused by a combination of a
covered and specifically excluded risks.”’”
(De Bruyn, >supra, 158 Cal.App.4th at p. 1216.) The only potentially “covered risk” the
Browns point to is “the abrupt and sudden discharge of water.” As explained above, as a matter of law no
sudden discharge of water occurred.
Thus, this is not a situation where there is both a covered risk and an
excluded risk. There are only two excluded
risks: discharge of water that is not
sudden, and mold.

Second, two
conceptually distinct risks or events did not cause the Browns’ loss. In Finn
v. Continental Ins. Co. (1990) 218 Cal.App.3d 69, where water leaking from
a broken sewer pipe “for months or years” had damaged the foundation of the
plaintiff’s house and the insured’s “broad peril policy” excluded damages from
“continuous or repeated seepage or leakage of water,” the court held that the
efficient proximate cause doctrine did not apply. (Id.
at pp. 70, 71.) The court stated: “Plaintiff argues that the break in the pipe
was the efficient predominating cause, the leakage merely an immediate
one. That argument is premised on
viewing the leakage and the break as two conceptually distinct events, linked
only casually. But ‘leakage’ and
‘seepage’ necessarily imply some break or gap in the thing leaking.” (Id.
at p. 72.) The court held that the
efficient proximate cause doctrine “has no application here because leakage and
broken pipes are not two distinct or separate
perils. . . . Leakage or seepage cannot occur without
a rupture or incomplete joining of the pipes.
This case involved not multiple causes but only one, a leaking
pipe.” (Ibid.; cf. Brian Chuchua’s
Jeep, Inc. v. Farmers Ins. Group (1992) 10 Cal.App.4th 1579 [damage
caused by a leak from a crack in an underground gasoline storage tank caused by
an earthquake was covered despite a pollution exclusion because under the
efficient proximate cause doctrine there were “two causes: the earthquake and the leaking tank”].) Similarly, the breaking of the Browns’ pipe
was not “conceptually distinct” from the leaking, spraying, or streaming of
water. Like Finn, this case involves only one cause, a
leaking/spraying/streaming pipe.

3. The
policy is conspicuous, plain, and clear

The Browns
argue that the extension of limited water coverage for damage to property from
direct contact with water if the water results from a sudden and accidental
discharge of water from a plumbing system is not conspicuous, plain and clear
because it should be on page 21 of the policy under “Uninsured Loss or Damage
and Excluded Causes of Loss of Damage,” rather than on page 14 of the policy
under “Extensions of Coverage.” This
argument is unconvincing.href="#_ftn7"
name="_ftnref7" title="">[7]

“Our
jurisprudence respecting conspicuousness, consistently with the inherent logic
of that concept, refers to how a coverage-limiting provision actually has been
positioned and printed within the policy at issue.” (Haynes,
supra, 32 Cal.4th at p. 1209.) “‘A coverage limitation is conspicuous when
it is positioned and printed in a manner that will attract the reader’s
attention.’” (Ortega v. Topa Ins. Co. (2012) 206 Cal.App.4th 463, 476.) The provision of the Browns’ policy extending
coverage for damage resulting from a sudden and accidental discharge of water,
to the extent it is a “coverage-limiting provision,” is printed in readable and
adequately-spaced print, organized in a helpful outline format, and positioned
where it should be in the section listing extensions of coverage. It is not hidden or concealed in fine print, a
“dense pack” format, or an overcrowded page.
(See TIG Ins. Co. of Michigan,
supra, 137 Cal.App.4th at p. 759 & fn. 11.) It actually appears earlier in the policy
than the Browns contend it should appear.
Moreover, the section describing the types of uninsured loss and damage
lists water damage as the first uncovered damage, and specifically refers to
the prior section of the policy containing the extensions of coverage: “We do not insure loss or damage consisting
of, composed of or which is water damage, except as covered under Section I -
Extensions of Coverage, Limited water coverage.” The section containing the exclusions lists
water second and also refers to the limit water coverage section: “Except as Section I - Extensions of
Coverage, Limited water coverage, provides for limited coverage for water
damage, we do not insure loss or damage directly or indirectly caused by,
arising out of or resulting from water.”
The table of contents refers to all three provisions. (See Mission
Viejo Emergency Medical Associates v. Beta Healthcare Group (2011) 197
Cal.App.4th 1146, 1157 [“[i]t is conspicuous in both the table of contents and
the policy”].)

The limited
coverage for water damage from sudden and accidental discharge is also plain
and clear. “To be plain and clear, the
substance of the exclusion must be precise and understandable,” and stated “in
words that are part of the working vocabulary of the average layperson.” (TIG
Ins. Co. of Michigan, supra, 137
Cal.App.4th at pp. 759-760; Malcom, >supra, 4 Cal.App.4th at p. 301.) The Browns do not identify any language that
they claim is not understandable.
Although the Browns dispute Mid-Century’s interpretation of the terms of
coverage provided by the policy, the Browns do not argue that the words in the
extension of limited water coverage or the exclusion for water damage (e.g.,
plumbing, discharge, eruption, overflow, release, constant, repeating, gradual,
intermittent, infiltration) are difficult to understand. (Cf. Haynes,
supra, 32 Cal.4th at p. 1205
[permissive user limitation in the Financial Responsibility Law not
“understandable to the average policy holder”]; Cal-Farm Ins. Co. v. TAC Exterminators, Inc. (1985) 172 Cal.App.3d
564, 578 [exclusion for “liability assumed by the insured under any contract or
agreement except an incidental contract” not plain and clear]; >Ponder v. Blue Cross of Southern California
(1983) 145 Cal.App.3d 709, 724 [exclusion for “temporomandibular joint
syndrome” not “comprehensible to lay persons”].)

Finally, as
noted above, the policy gives an explanation of what is not included in the
limited coverage for water damage: “A sudden and accidental discharge, eruption, overflow or release of
water does not include a constant or repeating gradual, intermittent or slow release
of water, or the infiltration or presence of water over a period of time. We do not cover any water, or the
presence of water, over a period of time from any constant or repeating
gradual, intermittent or slow discharge, seepage, leakage, trickle, collecting
infiltration, or overflow of water from any source . . . whether known or
unknown to the insured.” The Browns
argue that the policy’s use of the term “a period of time” in this explanation
is “ambiguous and undefined,” and that a “reasonable consumer would not
understand what a ‘period of time’ entailed . . . .”href="#_ftn8" name="_ftnref8" title="">[8]

The fact
that the policy does not define “a period of time” does not necessarily create
ambiguity. (See Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual Ins. Co.
(1993) 5 Cal.4th 854, 866; Carson v.
Mercury Ins. Co. (2012) 210 Cal.App.4th 409, 426-427.) Moreover, although there may be, at the
quantum level, some ambiguity in the concept of “a period of time,” an average
layperson understands generally what “a period of time” is, and understands
that for water escaping from a pipe, “one to two months” qualifies. The term “a period of time” has a
well-established meaning in the context of running water, and the policy’s use
of the term is plain and clear.

C. Breach
of the Implied Covenant of Good Faith and Fair Dealing

The Browns
allege that Mid-Century breached the implied covenant of good faith and fair
dealing by failing to investigate their claim properly, engaging in unlawful
and deceptive claims practices, and refusing to indemnify the Browns under the
policy. Because the policy did not cover
the Browns’ claims, however, the Browns do not have a claim for breach of the
implied covenant of good faith and fair dealing. (See Kransco
v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 408
[“without coverage there can be no liability for bad faith on the part of the
insurer”]; Cardio Diagnostic Imaging,
supra, 212 Cal.App.4th at p. 77,
[“because no policy benefits were due under the policy, [the insured’s] claim
for breach of the implied covenant of good faith and fair dealing cannot be
maintained”].)







DISPOSITION

The
judgment is affirmed. Mid-Century is to
recover its costs on appeal.





SEGAL,
J.href="#_ftn9" name="_ftnref9" title="">*





We concur:







PERLUSS,
P. J.











JACKSON,
J.