10th Circuit Water Loss Ruling Spotlights Competing Exclusions

Ryan Buschell’s commentary was included in a Law 360 article analyzing the Tenth Circuit decision in Auto-Owners Insurance Co. v. Excelsior Westbrook, which affirmed that a water damage exclusion applied to a Kansas office building's $1.75 million repair claim from a broken water pipe.

Ryan explained that the Tenth Circuit's decision exemplified how courts can vary in applying the same supposed interpretive principle. He also noted that other jurisdictions can and do read similar policies as a whole and interpret the exception for water damage from wear and tear as applying above and below ground, saying that it would be superfluous to write such a broad exception if another exclusion limits much of that exception.

"When you read the policy as a whole, if you add additional clarifying language to it, the same water exclusion could mean something different than if it's placed in a different policy that has different policy language, and that's not something that the Tenth Circuit engaged in here," Ryan said.