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Steeve v. IMT Insurance Co

Court of Appeals of Iowa

December 5, 2018

CHUCK STEEVE and MEGAN STEEVE, Plaintiffs-Appellants,
v.
IMT INSURANCE COMPANY, Defendant-Appellee.

          Appeal from the Iowa District Court for Pottawattamie County, James S. Heckerman, Judge.

         The plaintiffs appeal from the district court's summary dismissal of their lawsuit against their insurance company for breach of the insurance contract and coverage based on the doctrine of reasonable expectations. AFFIRMED.

          Jordan T. Glaser of Peters Law Firm, PC, Council Bluffs, for appellants.

          Douglas L. Phillips of Klass Law Firm, LLP, Sioux City, for appellee.

          Considered by Potterfield, P.J., and Bower and McDonald, JJ.

          POTTERFIELD, PRESIDING JUDGE.

         Chuck and Megan Steeve appeal from the district court's summary dismissal of their lawsuit against IMT Insurance Company for breach of their insurance contract and coverage based on the doctrine of reasonable expectations. Under their breach-of-contract-claim, the Steeves argue the phrase "human force" is ambiguous and thus must be construed against IMT; there is a genuine issue of material fact regarding whether the plumbing failure was caused by "human forces"; and because there is a genuine issue of material fact regarding causation, this issue is not appropriate for summary judgment. Additionally, the Steeves maintain the district court erred in its refusal to apply the doctrine of reasonable expectations to their loss.

         I. Background Facts and Proceedings.

         The Steeves purchased a home in Council Bluffs, Iowa, in June 2015. They purchased insurance coverage for the home through IMT.

         On Thursday, September 24, the area near the Steeves' home received approximately six inches of rainfall. The next morning, the Steeves noticed a loss of water pressure in their home. That same day, the area received another one and one-half inch of rainfall.

         On September 27, after receiving some advice from friends regarding the reduced water pressure, Chuck began digging near their water well looking for a possible break in the water line. He located a broken pipe approximately six and one-half feet below the surface of the ground. The leaking water had caused the soil to erode, leaving a "cavern" approximately six feet in diameter.

         Two days later, when Chuck came home from work, he noticed bricks were falling off the front of the home. The garage door appeared to be hanging at an angle and would not open. After walking around the home, Chuck noticed a crack in the home's foundation and an area of the roof that appeared to be separating from the rest of the home. The Steeves reported the damage to their insurance agent that night, and the insurance agent made an official claim on their behalf on September 30.

         IMT sent an insurance adjuster to review the damage to the home on October 2, and a structural engineer visited the property one week later.

         The structural engineer filed his first report with the insurance company on October 19. It opined, "Recent damage from foundation movements have occurred due to rain storms and coincident plumbing leak of the insured's well. Oversaturation of silty soils at the insured's property led to soil movements and the recent damage listed in [another section] in this report."

         On October 27, a representative of IMT contacted the engineer and asked for "some clarification on the cause of the settling to this house." Specifically, IMT was interested in "looking to determine what portion of the settling, if any, has anything to ...


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