A Capehart Scatchard Blog

No Coverage for Mold Under Homeowners’ Policy

By on July 24, 2015 in Blog with 0 Comments

The plaintiffs Sheldon and Shirley Kavesh discovered mold growth in their home, located on their attic’s interior plywood surfaces. They submitted a claim to their homeowner’s carrier, the defendant Franklin Mutual Insurance Company, for the remediation of the mold. The carrier denied the claim, stating that it was not covered by the policy. In Kavesh v. Franklin Mutual Ins. Co., 2015 N.J. Super. Unpub. LEXIS 1378 (App. Div. June 10, 2015), the plaintiffs appealed, claiming that this claim should have been covered by their policy.

The policy contained a specific exclusion for damage or loss covered by mold. However, it did provide limited coverage for mold if the loss was caused by fortuitous direct physical damage or destruction.

The defendant inspected the home and found no evidence of a roof leak or other water penetration to the attic. It determined that the mold resulted as a result of a high humidity condition which had caused condensation in and on the plywood roof sheathing.

The defendant also retained an expert who inspected the roof of the home. He noted that there were no water stains or water damage. He cited the absence of ventilation, the installation of an ice and water shield, and the placement of a fan as contributing factors to higher levels of condensation in the front slope of the attic where the mold was found. He found no exterior water entry, no missing shingles or roof damage, and no pipe, fixture, or appliance leaks causing the mold. He opined that the origin and spread of the mold on the roof sheathing in the attic cannot be attributed to any individual weather event.

The trial judge found that there was no basis under the terms of the policy to impose liability and dismissed the complaint. The plaintiffs appealed, claiming that the cause of the mold growth was a genuine issue of material fact that should have precluded the entry of summary judgment. The Appellate Division disagreed, upholding the trial court’s decision.

The plaintiffs dispute that the cause of the mold was condensation but provided no other explanation. They provided no evidence that the mold condition was a direct result of any loss that would bring the claim within the basic terms of the policy.

In construing the terms of the policy, the court found that its terms were not ambiguous. The plain language of the policy stated that mold is not covered, except for mold damage that is a direct result of a covered loss. The policy distinguished between mold and mold that is a consequence of a covered loss.

The Appellate Division rejected the plaintiff’s argument that mold growth by itself was a material intrusion into the home that met the requirement of “physical damage.” The plain language and express purpose of the policy was to generally deny coverage for mold damage but provide limited coverage for mold damage when resulting from some other covered cause of loss. The court found the absence of any material dispute of fact that would bring the claim within the policy and, hence, determined that there was no reason to disturb the trial court’s determination.


About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 30 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

For the years 2020-2023, Ms. Ramos was selected for inclusion in The Best Lawyers in America© in the practice area of Litigation - Insurance. The attorneys on this list are selected based upon the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. A complete description of The Best Lawyers in America© methodology can be viewed via their website at: https://www.bestlawyers.com/methodology.

In 2021, Capehart Scatchard and Ms. Ramos received the “Best Law Firm” ranking in the area of Litigation – Insurance (Metro, Tier 3) published by U.S. News & World Report and Best Lawyers®. Law firms included on the list are recognized for professional excellence with consistently impressive ratings from clients and peers. To be eligible for a ranking, a firm must have at least one attorney who has been included in the current edition of Best Lawyers in America, which recognizes the top five percent of practicing lawyers in the United States. Betsy Ramos (Litigation – Insurance) was recognized for this prestigious award in the 2021 edition. For a description of the “Best Law Firm” selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

“Best Law Firms” is published by Best Lawyers in partnership with U.S. News & World Report. For a description of the selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

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