Nope. Nope, nope, nope, nope. With all due respect to Justice Ashmann-Gerst, and while I totally get why she comes out the way she does, I hope that the California Supreme Court (at least) decides to depublish this opinion, or to grant review.
The question is whether there's insurance coverage when there's a wildfire near your home but it doesn't burn down. (You can see how timely this issue is at present, right?) Here, there was no burn damage, but there was (allegedly) a ton of ash that rained down on the property, trashed the home's carpets, clogged up the swimming pool, etc. So the homeowners made a claim.
Personally, from at least the way Justice Ashmann-Gerst wrote the opinion, I thought that the insurance company here (Wawanesa) acted more than reasonably. They inspected the property, calculated that it would cost roughly $4300 to "clean the property inside and out" (carpets, HVAC system, etc.), and offered a contractor who would do the work for that price. Later, after the homeowners gave Wawanesa a different estimate, the insurance company paid over $20,000 (including the deductible) to make everything right, and the homeowners "cleaned up" the property themselves rather than hiring anyone. So they're up nearly $20,000 after the claim. But still sued, claiming that they should have been paid more.
Again, given these facts, at least as recited by the Court of Appeal, I'm inclined to think that this is most definitely not a case where the insurance company is acting unreasonably, or where the homeowner has been screwed out of a legitimate recovery. So I can see why Justice Ashmann-Gerst wants to -- and does -- rule in the insurance company's favor.
But the Court of Appeal holds that, as a matter of law, that there was no coverage whatsoever for the wildfire damage here. That because the house didn't actually burn down, and because the ash could be physically removed, there was no insurance coverage at all.
Nope. Nope and no. Not for me, anyway.
Justice Ashmann-Gerst centrally relies on the California Supreme Court's latest COVID-19 insurance coverage opinion, which held that the COVID virus doesn't cause "direct physical loss" to a business property. But ash is different -- way different, IMO -- than a virus. The reasons restaurants shut down during COVID-19 was because they were closed down, and business owners couldn't get around that reality by seeking insurance coverage for "physical damage" to their property allegedly because the virus purported "stuck" to the restaurant's chairs, tables, etc. That's why that case came out the way it did.
A fire is different. Ash is different. We expect that a homeowner's insurance policy will apply to damage from a fire. When the home burns down. When the home narrowly avoids burning but gets scorched. As well as when the home narrowly avoids scorching but gets covered in ash from -- as here -- a fire that burned a mere 800 yards away.
The definition in the California Supreme Court's COVID-19 case is that to be "direct physical loss" under an insurance policy, there needs to be a "physical alteration to the property" that "need not be visible to the naked eye, nor must it be structural, but [] must result in some injury to or impairment of the property as property.” COVID-19 might not qualify, but ash does. The Court of Appeal is correct that ash -- like a virus sitting on a restaurant table -- might perhaps be “easily cleaned or removed from the property" and does not “alter the property itself in a lasting and persistent manner."
But LOTS of things that constitute insurable direct physical loss are like that. When someone writes graffiti on your home, that's easily painted over or removed and does not permanently alter the nature of the property itself, but it's darn sure covered. Ditto for those burn marks from a fire; they too can be removed, and maybe they're barely even noticeable, but you've definitely got coverage for that as well.
The California Supreme Court says that there's got to be "some injury to or impairment of the property as property." Let me tell you this for sure: When the bed in your bedroom is covered in ash, there is an "impairment of [that] property as property." You can't -- and won't -- use it for a bed until it's cleaned. Ditto, typically, for the swimming pool. Ever feel like a nice leisurely swim in a pool that's covered by a half-inch of black, wet ash? I think not. The property, qua property, is directly injured. On the Court of Appeal's theory, ash still doesn't cause property damage even if it's 8 feet deep and fully occupies the entirety of your living room. "You can just remove it." Yeah, sorry. We can, but it's still covered, and the insurance company has to pay for removing it, not me. It's damage; it damages my ability to enjoy and use the property for its intended function. It's covered.
It's possible, here, that the ash was so de minimus as to not create coverage. Though that seems a factual issue that can't be entirely resolved here in an MSJ. It's also possible (indeed, perhaps likely) that the $20,000 or so that the insurer actually paid fully -- or more than fully -- covered the actual loss. Great. If so, the insurer will win at trial.
But to hold, as here, that ash -- like many other things -- categorically does not cause an insurable loss as a matter of law just seems starkly wrong. As well as pernicious, particularly at a time in which there are a LARGE number of people who were in fact recently injured in precisely such a fashion and who are likely in the midst of making precisely the types of legitimate (IMHO) insurance claims at issue here.
I've never made a homeowner's insurance claim for ash. Likely never will. Didn't do so even when quite a bit of ash rained down on my home as a result of the Cedar Fire back in 2003. I just cleaned it up and moved on.
But if there's a wildfire, and ash rains down and stains your carpet or mucks up your pool or simply needs to be cleaned up (like graffiti), I think you legitimately expect -- and paid for -- coverage for that. You should be entitled to make a claim if you want. It counts. It's covered. You should be paid for the costs of cleaning the stuff out.
So I think, with respect, that this one is wrong. Maybe an equitable result given the $20,000 that the insurance company already paid (and hence depublication would be fine), but wrong on the law.
