Chipped Tile Claims Meet the “Marring” Exclusion in Ergas

In Ergas v. Universal Prop. & Cas. Co., 2013 WL 1748574 (Fla. 4th DCA April 24, 2013), the Fourth District Court of Appeal issued an important order for Florida property insurers. The court held that the “marring” exclusion barred coverage for tile damage caused by a dropped object. If you do not handle Florida insurance claims, you may be surprised to find out that there are hundreds, if not thousands, of these claims filed each year in Florida.

The cases typically include the following facts: the insured accidentally drops a coffee pot or similarly hard object on a single tile. That tile is either cracked or dented. The tile runs continuously throughout the entire house or a large portion of it, and the insured has no extra tiles to replace the broken tile. And in most of these cases, the tile is no longer manufactured. As a result, some insureds, public adjusters, and insureds’ attorneys argue they are entitled to have the entire tile floor in their home replaced.

Until Ergas, there was no appellate court authority on the issue. In Ergas, the Fourth DCA examined several of the insurer’s proposed definitions for the term “mar,” including “to injure, spoil, damage, ruin, detract from,” “to inflict damage,” “blemish,” and “to cause harm to, spoil, or impair.” The court held that a dropped object on tile was consistent with any of the proposed definitions.

There are, however, some concerning issues arising from the decision. First, the court hints that there may be other arguments available to insureds. For example, the court suggests that the insureds did not argue that the term was ambiguous because it was overinclusive. The court noted that it would not enforce the exclusion if it led to an absurd result. The court appears to imply that there are limitations on these broad definitions of “marring.” In addition, the court discusses the way in which the insurer tried to distinguish superficial and substantial damage. The insurer argued that the marring exclusion should apply to superficial damage. Although this argument provides the common sense component supporting the insurer’s argument, the court found that the definition of “marring” had no such distinction. Based on these express caveats, the court implicitly states that the insureds might have been able to make other arguments, however, the court did not identify any arguments that would have led to a different result. Although the decision appears to be a substantial development for the industry, insurers and their attorneys should continue to craft the argument to ensure that the Fourth District’s concerns with the argument are properly disposed of.