Karl and Diana DeVore (DeVores) purchased a newly constructed home in Antioch, Illinois in April 2002. On December 18, 2003, while they were out of town, the angle shut-off valve servicing the washing machine ruptured and water flowed into a number of rooms and the basement, damaging a variety of property. American Family Mutual Insurance Company (American) paid for replacing the flooring, base cabinets in the kitchen and sections of drywall, including painting and baseboards, also including the labor and construction costs. The DeVores hired Safestart to test for mold and to develop a remediation plan. They also hired Servicemaster to perform the work outlined in Safestart's remediation plan. Servicemaster was paid $10,435 for its services. American paid $2,600 of the Servicemaster bill for "demolition." It did not pay Servicemaster for its services to remove mold because of the exclusion in its policy.
The trial court found that mold was present in the house caused by the water event but determined that the mold exclusion provision effectively excluded coverage for the damage caused by the mold. It found against the DeVores on all three counts of their complaint (a declaration of coverage for mold remediation, breach of contract and attorney fees) and in favor of American on its counterclaim for declaratory judgment. The DeVores appealed.
The DeVores contended that the trial court erred by determining that the loss caused by the mold was excluded by the policy and that the court should have recognized the distinction between mold that occurs from an otherwise covered event and mold that results from some other source or event. The appellate court approached this argument by determining that its main objective in construing an insurance policy is to ascertain and give effect to the intent of the contracting parties. The insurance company must affirmatively demonstrate that exclusions apply. Provisions that limit or exclude coverage must be construed liberally in favor of the insured and against the insurer. An ambiguous provision subject to more than one interpretation must be construed in favor of the insured but the words of a provision that are clear and unambiguous must be given their plain, ordinary and popular meanings.
The appellate court determined that the policy language in this case clearly and unambiguously excluded coverage for losses that resulted from mold caused by the water event. The policy did not cover loss to property resulting directly or indirectly from or caused by mold. The exclusion clearly stated that such loss was excluded regardless of any other cause or event contributing to the loss concurrently or in any other sequence. It also observed that it could not understand how American could have been any clearer in writing the exclusion. It rejected the DeVores argument that the mold damage was not an excluded loss but was damage caused by a covered loss and upheld and affirmed the judgment of the circuit court.
Appellate Court of Illinois, Second District. Karl DeVore and Diana DeVore, Plaintiffs-Appellants, v. American Family Mutual Insurance Company, Defendant-Appellee. No. 2-07-0154. June 24, 2008. 383 Ill.App.3d 266, 891 N.E.2d 503 322 Ill.Dec. 490