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MGM Apartments, LLC v. Mid-Century Ins. Co.

Court of Appeals of Iowa

January 23, 2014

MGM APARTMENTS, LLC, an Iowa Limited Liability Company, Plaintiff-Appellant,
v.
MID-CENTURY INSURANCE COMPANY, Defendant-Appellee

Editorial Note:

This decision has been referenced in a "Decisions Without Published Opinions" table in the North Western Reporter.

Appeal from the Iowa District Court for Pottawattamie County, Timothy O'Grady, Judge. This case comes before the court on appeal from the district court's order granting summary judgment in favor of Mid-Century Insurance Company and adverse to MGM Apartments, LLC.

Robert Livingston and Richard Crowl of Stuart Timley Law Firm, L.L.P., Council Bluffs, for appellant.

Jason Miller and Harry Perkins III of Patterson Law Firm, L.L.P., Des Moines, for appellee.

Heard by Vogel, P.J., and Mullins and McDonald, JJ.

OPINION

McDONALD, J.

This case comes before the court on appeal from the district court's order granting summary judgment in favor of Mid-Century Insurance Company (" Mid-Century" ) and adverse to MGM Apartments, LLC, (" MGM" ). The district court held that a loss suffered by MGM was excluded from coverage under an apartment owner's policy sold by Mid-Century to MGM. We affirm the judgment of the district court.

I.

MGM owns apartments located in Council Bluffs, Iowa. MGM purchased an apartment owner's insurance policy from Mid-Century to insure the apartment complex from the period of February 18, 2011 to February 18, 2012. In the summer of 2011, ground water levels around the apartment complex became unusually high. On or about July 7, 2011, these water levels caused a sewage lift station near the apartment complex to fail, which resulted in sewage backflow and water infiltration damage to the apartment complex. MGM submitted a claim under the policy to Mid-Century. Mid-Century denied the claim on the grounds that the loss was an excluded cause of loss pursuant to two exclusions in the policy.

MGM filed this action. In its amended petition, MGM asserted a claim for breach of contract arising out of Mid-Century's denial of MGM's claim. MGM also asserted a claim for coverage under the doctrine of reasonable expectations. Mid-Century filed its motion for summary judgment, arguing that several policy provisions unambiguously excluded coverage for MGM's loss. These exclusions related to loss caused directly or indirectly by earth movement, water, mudslide, mudflow, wear and tear, rust, corrosion, decay, deterioration, settling, cracking, and mechanical breakdown. Mid-Century further argued that the doctrine of reasonable expectations was not applicable here. In its resistance to summary judgment, MGM argued only that an exception to the earth movement exclusion applied and coverage should be extended pursuant to the doctrine of reasonable expectations. MGM did not address the other exclusions raised by Mid-Century. The district court addressed only the earth movement exclusion; held that the exception to the earth movement exclusion did not apply and that MGM's loss was thus excluded; held that MGM failed to create a triable issue of fact under the doctrine of reasonable expectations; and granted Mid-Century's motion for summary judgment.

II.

We review the district court's grant of summary judgment for corrections of errors at law. See Boelman v. Grinnell Mut. Reins. Co., 826 N.W.2d 494, 500 (Iowa 2013). Summary judgment should be granted only " if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Iowa R. Civ. P. 1.981(3). The party seeking summary judgment has the burden of establishing that the facts are undisputed and that the party is entitled to judgment as a matter of law. See Estate of Harris v. Papa John's Pizza, 679 N.W.2d 673, 677 (Iowa 2004). When a motion for summary judgment is made and properly supported, however, the opposing party may not rest upon the mere allegations or denials of the pleadings. See Iowa R. Civ. P. 1.981(5); Bitner v. Ottumwa Cmty. Sch. Dist., 549 N.W.2d 295, 299 (Iowa 1996). Instead, the resisting party must set forth specific, material facts, supported by competent evidence, establishing the existence of a genuine issue for trial. See Iowa R. Civ. P. 1.981(5); Bitner, 549 N.W.2d at 299.

The court views the summary judgment record in the light most favorable to the party resisting the motion for summary judgment and indulges in every legitimate inference the evidence will bear in an effort to ascertain the existence of a genuine issue of fact. See Crippen v. City of Cedar Rapids, 618 N.W.2d 562, 565 (Iowa 2000). " A fact is 'material' if it will affect the outcome of the suit, given the applicable law." Parish v. Jumpking, Inc., 719 N.W.2d 540, 543 (Iowa 2006). An issue of fact is " genuine" if the evidence would allow a reasonable jury to return a verdict for the nonmoving party. See Fees v. Mut. Fire & Auto. Ins. Co., 490 N.W.2d 55, 57 (Iowa 1992). If the summary judgment record shows that the " resisting party has no evidence to factually support an outcome determinative element of that party's claim, the moving party will prevail on summary judgment." Wilson v. Darr, 553 N.W.2d 579, 582 (Iowa 1996); Iowa R. Civ. P. 1.981(3). In addition, ...


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