Preview
BARBARA J. MANDELL (SBN 106523)
MATTHEW W. BALMUTH (SBN 291675)
MANDELL, DAMON & ASSOCIATES, LLP
15760 Ventura Blvd., Suite 880
Encino, California 91436
Tel. (818) 564-4023 | Fax (877) 759-1414
E-mail:barbara@ mandellfirm.com
matthew@ mandellfirm.com
Attomeys for Defendant,
HOMESITE INSURANCE COMPANY OF CALIFORNIA
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF MONTEREY
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ROBERT CLAMPETT, an individual, and Case No.: 21CV 001804
12 MARIANNA CLAMPETT, an individual, Hon. Carrie M. Panetta
Dept.: 14
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Plaintiffs, TABLE OF DECLARATIONS AND
14 EXHIBITS IN SUPPORT OF
DEFENDANT HOMESITE
15 INSURANCE COMPANY OF
CALIFORNIA’S MOTION FOR
16 SUMMARY JUDGMENT, OR IN THE
HOMESITE INSURANCE COMPANY OF ALTERNATIVE, SUMMARY
17 CALIFORNIA, a Califomia corporation; DOES ADJUDICATION - VOLUME THREE
18 1 through 10, inclusive,
Concurrently filed documents:
19 [Notice of Motion and Motion for Summary]
Defendants. Judgment, or in the alternative, Summary
20 Adjudication; Separate Statement of
Undisputed Material Facts; Request for
21 Judicial Notice; Declarations of Barbara
Mandell and Scott Callahan; and Proposed
22 Order]
23 Date: Au st 11, 2023
Time: 8:30 am.
24 Dept.: 14
25 Complaint Filed: June 3, 2021
Trial Date: September 18, 2023
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TABLE OF DECLARATIONS AND EXHIBITS IN SUPPORT OF DEFENDANT HOMESITE INSURANCE
COMPANY OF CALIFORNIA’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE,
SUMMARY ADJUDICATION
Defendant HOMESITE INSURANCE COMPANY OF CALIFORNIA (“Homesite”)
submits the following Table of Declarations and Exhibits in support of Homesite’s Motion for
Summary Judgment, or in the alternative, Summary Adjudication.
EXH. DESCRIPTION
NO.
Declaration of Scott Callahan
Declaration of Barbara J. Mandell
Plaintiffs’ homeowner insurance policy no. 35116833
10 Homesite’s pertinent claims notes
11 Notification of loss assignment
12 Jacob Lee email to Plaintiffs after claim assignment
13 Ryze Claims Solutions assignment acknowledgement and Jacob Lee’s email to
14 Plaintiffs concerning Ryze’s retention
15 Emails between Jacob Lee and Charles Linard on August 27" and 28" of 2019
16 Charles Linard’s final repair estimate, photographs and final IA report
17 Partial denial letter dated September 9, 2019, Jacob Lee email to Plaintiffs advising
18 of payment, Homesite email and payment notice
19 Robert Clampett’s email to Jacob Lee dated December 17, 2019, and Tom Long
20 supplemental repair bid
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Jacob Lee’s letter to Plaintiffs dated December 26, 2019
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Robert Clampett’s letter to Jacob Lee dated April 8, 2020
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Jacob Lee’s email to Robert Clampett on April 9, 2020
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Jacob Lee’s email to David Hollingsworth on April 14, 2020
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Tammy Brown’s April 21, 2020 letter to Plaintiffs
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Donan engineer report with accompanying photos, dated May 20, 2020
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P Tammy Brown’s email to David Hollingsworth on May 27, 2020
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Q Tammy Brown’s letters to Plaintiffs from June to August 2020
TABLE OF DECLARATIONS AND EXHIBITS IN SUPPORT OF DEFENDANT HOMESITE INSURANCE
COMPANY OF CALIFORNIA’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE,
SUMMARY ADJUDICATION
David Hollingsworth’s written response to Donan report with accompanying
opinions from California Construction Services and Blue Sky Consulting, Inc.
David Hollingsworth’s “Briefon Applicable California Law”
Denial letter dated September 22, 2020
David Hollingsworth’s written demand for appraisal; Tammy Brown’s email to
Hollingsworth on November 20, 2020
Appraisal award dated May 6, 2021
Denial letter dated May 12, 2021
Records subpoena served on Hometek and certain records produced
10 Robert Clampett’s verified discovery response to Special Interrogatory Nos. 5, 47-
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12 Relevant portions of deposition transcript of Scott Callahan
13 AA Relevant portions of deposition transcript of Charles Linard; two status reports
14 attached as “exhibits 14 and 15” of depo transcript
15 BB Relevant portions of deposition transcript, Volume I, of Tom Long
16 CC Relevant portions of deposition transcript, Volume I, of Plaintiff Robert Clampett.
17 DD Relevant portions of deposition transcript, Volume I, of Plaintif Marianna Clampett
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EE Relevant portions of deposition transcript of David Parker
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FF Relevant portions of deposition transcript, Volume II, of Plaintiff Robert Clampett.
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GG Relevant portions of deposition transcript, Volume II, of Plaintiff Marianna
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Clampett ; text message attached as “Exhibit Q” of depo transcript
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HH Relevant portions of deposition transcript of Phu Nguyen
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Request for Judicial Notice
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Plaintiffs’ Complaint filed on June 3, 2021
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Plaintiffs’ Petition to Confirm Appraisal Award filed on September 23, 2021
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3 Court’s Entry of Judgment on December 6, 2021 re: Petition to Confirm Appraisal
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TABLE OF DECLARATIONS AND EXHIBITS IN SUPPORT OF DEFENDANT HOMESITE INSURANCE
COMPANY OF CALIFORNIA’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE,
SUMMARY ADJUDICATION
Dated: May 16, 2023 MANDELL, DAMON & ASSOCIATES, LLP.
By: frere Mfiaatilg
BARBARA J. MANDELL
MATTHEW BALMUTH
Attommeys for Defendant,
HOMESITE INSURANCE COMPANY OF
CALIFORNIA
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TABLE OF DECLARATIONS AND EXHIBITS IN SUPPORT OF DEFENDANT HOMESITE INSURANCE
COMPANY OF CALIFORNIA’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE,
SUMMARY ADJUDICATION
Exhibit R
LAW OFFICES OF
DAVID M. HOLLINGSWORTH
1474 DEER FLAT ROAD, MONTEREY, CALIFORNIA 93940
TELEPHONE (831) 375-3135 + FAX (831) 375-3883
dmblaw@comeast net
DAVID M. HOLLINGSWORTH
August 26, 2020 ANS
Ms, Tammy Brown
Large Loss Adjuster.
Phone 801-559-8143
laims@homesite.com
Homesite Insurance Company
PO Box 5300
Binghamton, NY 13902
Subject: RE: [EXTERNAL] RE: Claim 2490048
Dear Ms. Brown:
Here is our promised response. I am confident that if I have failed to address any
applicable provision of the policy which addresses water damage or any other issue
which stands between a resolution, you will bring that to my attention.
Summary of Facts and ALL RISK Policy
The Parties: Bobby Clampett and Marianne Clampett are the owners of a 4,200+
square foot home at 27467 Schulte Road, Carmel Valley, California. (“Dwelling”) Their
home is located at the crest of an eleven hundred forty four foot Ridgeline! framing
Carmel Valley.
*
Bobby Clampett is a nationally known professional golfer and CBS announcer
who broadcasts some of the top flight professional golf tournaments on the PGA tour,
Dwelling: was built in 1998 pursuant to permits and inspection approvals of the
County of Monterey. .
“Contractor”, Tom Long: Analysis of Loss He Discovered, Examined Via
Destructive Testing, Estimated, Bid and Repaired:
) At the master bedroom deck.
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Tom Long (hereinafter designated “Contractor”) is a long time licensed general
contractor (22 years) of working on the Monterey Peninsula and-Carmel Valley. He had
done extensive, extremely satisfactory renovation work in-Clampett’s neighborhood on
the Schulte Road Ridge. Mr. Long is the licensee, owner and CEO of Hometek, Inc., a
well known and reputable general contractor (“Contractor”), from Pacific Grove. After
Clampetis discovered some ill-fitting doors in their residence in August of 2018, they.
called neighbors/friends to get referrals of a contractor who might help them: Several
extremely complimentary recommendations were made of the proficiency, honesty and
reliability of Contractor.
.
Initially, in August, 2018, it was decided to replace all doors and windows which
no longer worked as smoothly as before. Contractor also undertook examination of
Dwelling, including destructive examination and testing, of walls, floors, ceilings and all
door and window openings (56 altogether)
Here is how Contractor explains his retention and examination of the subject
damage. (The typos in his original report have not been corrected, but quoted as is)
“On or about August 15, Mrs. Clampett had me come to their home to investigate water dripping
from the cciling of the garage, ponding on the window sills throughout the house, and wet carpets
in the downstairs bedrooms. I did not observe or smell any mold, or see any dry-rot.
On August 22 of 2019, my company started water damage investigation at the Clampett
residence, 27467 Schulte Road, Carmel, California, We began in the garage area under the second
floor balcony Jooking for water intrusion in the celling framing. Our inspection lead us into the
wall framing on the second floor window and door assembly at the balcony area, consisting of
demolition exploratory work to trace the source of the-water, and exposed hidden water damage in
the wall. assembly’s. Dry-rotted framing was uncovered, removed and replaced, waterproofed from.
the elements and we then moved to the next window in the garage and found a similar scenario on
the garage window and the second floor window above it. 1 suggested to Mr. Clampett that he
might contact his insurance company, he did, and they out an adjuster. Work continucd, the
adjuster arrived, reviewed the work in progress and surveyed the rest of the residence, noting many
areas of water intrusion.
Work continued in a methodical clockwise pattern around the residence finding water intrusion-at
almost every door.and all windows. All replacement window and door assemblies were damaged
by water and wind, Window and door framing was damaged by water intrusion leading to the
discovery of dry-rotied framing, and framing replacement was mandatory. Windows and doors
were not re-usable and new doors and windows were ordered.
Dry rot was confined to framing components at window and door locations, and the remediation
approach was removal and replacement of affected wall framing components. All infected material
was removed from site weekly to a landfill site, All adjoining areas were treated with fungicide to
prevent any future growth of mold spores. No black mold was.found. Framing was completed,
doors and windows installed, insulation installed, WRB on exterior, lath, sheetrock and stucco.
Painting is ongoing.
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All of the damaged areas required inspection, evaluation, steps to protect the area
from further damage, and repairs of both the water saturated areas and mold/rot. The
purpose of said repairs.was not only to restore, but to halt, protect against, preempt-and
mitigate the extensive damage already done. Contractor’s bid and conforming billing in
the amount of $565,612.00 has been completely paid by Clampetts for all work done.so
far, not including approximately $30,000.00 (still in process) . As one of the many.
percipient witnesses of the damages and repairs, Contractor is particularly competent to
testify as to both the damaged condition, the cause therefore, and:the detailed repairs
which he bid, contracted for and performed. The claim has been amended to add the
$15,612.00 damages done to the exterior deck adjoining the master bedroom necessarily
done to perform the necessary corrections which were the subject of Hometek’s billing.
Naturally, he is the most percipient witness of the probative facts as well as an eminently
qualified expert.
The nature and extent of the above damage was originally hidden from view and
unknown to Clampetts, but ultimately discovered to arise from a combination of mostly
water intrusion and, to a lesser extent, by conditions of mold/rot, all of which were.
located, designated and repaired only after intensive destructive testing and examination.
{It is conceded that mold/rot conditions were limited by the Clampett policy, but
nevertheless may be collectible because of the doctrines of “concurrent cause” and
“efficient proximate cause” hereinafter discussed in detail and described in the Separate
paper on. “APPLICABLE CALIFORNIA LAW”..]
Further, all of the expensive destructive testing to locate, evaluate and repair
covered water damage had to be done in any event, notwithstanding the existence of
mold/rot conditions. In other words, it was necessary to do the same destructive
examination to locate and repair the water damage as it would have taken to locate and
examine the nature and extent of the mold/rot water damage. Once discovered via
destructive examination, all of said damaged areas, (water intrusion, mold and rot)
required removal and replacement. ‘At all of the times herein mentioned, Clampetts have
demonstrated a willingness to expend substantial funds for destructive testing and repair
even though GEICO/HOMESITE has thus far stubbornly withheld meaningful
contribution.
Both GEICO/HOMESITE and Clanipetts have obtained professionals to advise
regarding estimates of the costs of repair of these two separate categories. Water damages
are covered, Mold/rot damages are covered, but limited to only $2,500.00, which has
been paid. . Water intrusion damages are claimed by GEICO/HOMESITE to be limited to
$7,500.00, which they have remitted as.part of its “initial payment to you” totaling
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$10,389.27. However, even at this late date of the négotiations, Insurer has been
unable to cite or quote any applicable “water damage” exclusions in the ALL RISK
policy which are not subject to specific exceptions. The parties also vigorously differ
on whether apportionment is appropriate or not as hereinafter specifically described,
Clampetts claim apportionment is not necessary because, according to the
California Supreme Couit, where a loss was caused by two perils, one covered by
insurance and one excluded, the loss was covered in its entirety if the covered peril was
the “efficient cause of the loss”. Therefore, ‘it is clear that water-intrusion was the
“efficient proximate cause (“EPC”) of the loss”, and the entire loss would therefore be
covered. Sabella vs. Wisler, (1963) 59 Cal.2d 21, 33-34 and its California progeny.
(discussed herein and in the accompanying Brief on “Applicable California Law” and
quoted therein in detail.) Insureds claim that it was not any superficial “cracks” that
caused the. damage, but the covered wind driven water intrusion. (There is no competent
evidence that “stress cracks” were caused by “stress”, or that if it they did exist they
were not the EPC of the water damage as hereinafter explained and documented. The
unanimous opinions of Clampetts’ experts is that it was not stress which caused any
cracking. In fact, even assuming arguendo cracks caused or contributed to the water
damages, that condition was certainly not the efficient proximate cause of the loss.’ Please
see California Statutes (Ins. Code §§730-732 and the California Supreme Court on point
decisions hereinafter quoted.
The ALL RISK Insurance Policy Coverage: Presumptions and Burdens:
The “ALL RISK” Policy and rules of interpretation: The Clampett home is
insured on the HO 00 03 04 91 form. This appears to bea top of the line “ALL RISK”
policy. Under the section entitled “Perils Insured Against”: it provides“we insure. against
risk.of direct physical loss to. property”. And then it goes on to list absolutely necessary
specific exclusions to that coverage. If some risk is not excluded, it is covered. Of
course, the exclusions must be narrowly interpreted in favor of the insured. The
burden of proof is on the carrier to prove any specific alleged exclusion applies.
It should be noted that Clampetts’ premium was more than doubled the year
following their claim from 2019: $2509.00 to 2020: $5833.00 per year. (213%)
Exactly why was this savage increase effected, and how was it calculated?? The
unilateral boost effectively and immediately repaid to. GEICO/HOMESITE $3,224.00 of
the meager $10,380.27 “benefit” grudgingly paid out for a loss of well over half-million
dollars. To put this in perspective, Clampetts paid an annual premium of $1,434.00 for
their annual property insurance premium for the year next immediately preceding their
entrustment of their property insurance to GEICO/HOMESITE. Thus, they are now
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suddenly paying over four times their former annual premium to GEICO/HOMESITE due
to no fault of their own. Over ten years, if they stay with GEICO they will therefore be
paying an extra $40,000.00 plus to. GEICO/HOMESITE although their only “sin”
{although they did nothing wrong) was to make a valid claim ?2?? Therefore, the meager
sum remitted to the insureds, combined with the boosted premium, perhaps explains why
some insurance companies are so wealthy. Clampetts had no input whatsoever to. the
213% and plus 400% increase in their premiums, and no opportunity to discuss or
negotiate it, or even to obtain an explanation before they were billed for the new, inflated
coverage. '
SUMMARY OF RELEVANT TERMS OF POLICY
(Analysis of All Provisions Which Could Conceivably Exclude Water Damage)
LL “Section L PROPERTY COVERAGES” insures the Dwelling on the
residence premises; page 2 of 17;
2. “Section 1, PERILS INSURED. AGAINST: insures direct loss to
property Described in Coverages A and B only if that loss is a physical loss to
property. Then follows specific exclusions, including the exclusion which is one of
the subjects of the present dispute.
3. ENDORSEMENT: “LIMITED FUNGI, WET OR DRY ROT, OR
BACTERIA COVERAGE”, Please note: no reference of water
damage in title. However, the body of the Endorsement adds: a new
12.2.9)
Purports to exclude from the exclusion “repeated seepage...over a.period of
weeks, months or years unless unknown to all insured and is hidden within the walls
r ceilings or beneath the floors or above the ceilings of a-structure”, Therefore step
one excludes coverage for seepage, but said following language expressly removes
(excepts from the exclusion) damage which was “hidden” and “unknown” to the
insured, which it most certainly was.
“SECTION 1-EXCLUSIONS” Page 8 of 17 does directly address in
section Lc. “WATER DAMAGE” which appears to explain to the insured exactly
what types of water damage are excluded. Those provisions which exhaustively
define excluded water coverage are devoid of reference to the vital subject of the
“efficient proximate cause” of this water damage. (Please contrast the misleading,
complete absence of reference to water damage with the clear, specific exclusions of
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mold.and-rot damage.)
Therefore, there are no relevant exclusions of water damage iin this ALL,
RISK policy, and all ambiguities on that'subject are construed in favor of the
- insured.
There are a variety of other discrete issues which are hereinafter addressed
Unfair Settlement Practices in Violation of Ins, Code
Unreasonably Low Settlement Offers (“Lowballs”)
(g) No insurer shall attempt to settle 4 claim by making a settlement offer
that is unreasonably low. The Commissioner shall consider any admissible
evidence offered regarding the following factors in determining whether or
not a settlement offer is unreasonably low: (Emphasis added.)
(4) the extent to which the insurer considered evidence submitted by the
claimant to support the value of the claim; (Actual cost vs. low ball
estimate”.) (Most contested claims consider conflicting “estimates”
Actual cost cannot be denied)
(2) the extent to which the insurer considered legal authority. or
eyidence made known to it or reasonably available; (Cited and quoted
herein and in brief on “Applicable California Law”, for your review. We
are talking about California Supreme Court direct precedent and applicable
California statutes.)
(5) the procedures used. by the insurer in determining the dollar amount of
property damage; (Totally inadequate “low ball” estimate must yield to
actual cost.)
(6) the extent to which the insurer considered the probable liability of
the insured and the likely jury verdict or other final determination of
the matter;
(7) any other credible evidence presented to the
Commissioner that demonstrates that (1) any amount offered
by the insurer in settlement of a first-party claim to an-insured
not represented by counsel, or (ii) the final amount offered
in settlement of a first-party claim to an insured who is
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represented by counsel or (iii) the final amount offered in
settlement of a third party claim by the insurer is below the
amount that a reasonable person with knowledge of the facts
and circumstances would have offered in-settlemént of the
claim (Emphasis added.)
Also Prohibited!
(6) Compelling insureds to institute litigation to recover
amounts due under an insurance policy by offering substantially less
than the amounts ultimately recovered in actions brought by the
insureds, when the insureds have made claims for amounts reasonably
similar to the amounts ultimately recovered.”
In any event, GEICO’S minimal offer is inconsistent with the message conveyed
by its current intensive round of advertising.
The offer of less than 1/50 (2%) of actual costs is a bad faith, “low ball” offer
for all of the reasons herein stated, and even that amount is reduced by GEICO’S
$3,500.00+ unilateral boost in premiums the year following the still unpaid, actual
loss. The details of the unfortunate discrepancy are spelled out herein.
Clampetts are distinctly unhappy with certain misleading concealments of material
fact, half-truths and false representations, which have been made to support effective
denial of coverage and to deter them from pursuing this valid claim. Therefore, I am
providing herein documented facts and relevant California case law (including
indisputable, on-point holdings of our California Supreme Court) to demonstrate that
there should be some sincere reconsideration about the following ill-considered positions
and statements advanced by GEICO/HOMESITE Insurance in very effectively denying
coverage. -
The compounded effect of the following misleading, incorrect statements by
GEICO/HOMESITE to attempt to justify effective denial of the claim by attempting to
liquidate the coverage in a completely different universe of damages ($10,380.27 paid
and $14,559.05 gross) rather than the indisputable ACTUAL costs of repair
($565,612.00). Please note: said Jatter number is not an estimate, but the ACTUAL
cost of repairs, almost the entirety of which has been paid by your insureds, with
the assistance of only the meager $10,380.27 thus far paid on account.
Jacob Lee, the adjuster assigned to the case before he was replaced by you, wrote
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Mr. and Mrs. Clampett with an “EXPLANATION OF THE PARTIAL (woefully
inadequate) CLAIM PAYMENT” on September 9, 2019, GEICO/HOMESITE
represented to its insureds that the purpose of said document was.as follows:
“Please carefully review the entire document as it contains additional
“information how your payment amount was calculated and why a |
ortion of the loss? was denied.” (Emphasis added.) Page 2:1-3.
Please. note: The complete title of the Endorsement HH 04 32 09 02.is in bold
capitalized print upon which you rely to limit coverage is:
“LIMITED FUNGI, WET OR DRY ROT, OR BACTERIA. COVERAGE”
ENDORSEMENT
Please Note: There is no remote reference in said title, nor in the detailed
descriptions of the specific exclusions and limitations to the subject of this claim which
follow to : “water intrusion damage”.
The following outright misrepresentations, half-truths and concealment constituted
the leverage and purported grounds to discourage pursuit of this valid claim. Fittingly, it
“might be said that none of the expressly stated reasons apply in that they patently fail to
“hold water”.
SUMMARY OF PURPORTED “GROUNDS” OF DENIAL AND RESPONSES
A. Alleged “stress cracks” as “ground” for denial. Superficial Cracks were
not caused by stress: (When, where and why did such “stress occur?)
This conclusion as to the nature of the cracks is pure speculation by the original
adjuster, Charles Linard, who is apparently not competent to make such a conclusion, but
nevertheless advanced.the same to fit the terms of the purported exclusion language in
the policy (“cracks”). Mr. Nguyen, your engineer, just perpetuated that pointed error.
B. The cosmetic cracks are not the “efficient proximate cause” (“EPC”)
of the water intrusion damage. “The “cracks” in the drywall were superficial, cosmetic
cracks to be expected in a “Santa Barbara finish”, and were not the Please see the two
accompanying, specialist written opinions clarifying that mistaken conclusion by your
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adjuster, and engineer. Patrick Moffett is a highly respected “water intrusion” expert-who
has “written the book” on water intrusion, and is the “rock star”, on that limited subject,
Jason Schlesinger of California Construction Services is a long time general contractor
highly specialized in the discrete subject of stuccodynamics. Those opinions not only
directly conflict with the originator of the fiction of the role of.“cracks” in the water
intrusion, but explain exactly why your representatives are mistaken.
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1. Location of water and water damage: The water and water
intrusion damage discovered by destructive examination was not located at the cracks, but
at the 56 door and window units which openings were all replaced by the repairs for which
your insured (heavily) paid.
2. In the unlikely event that the superficial “cracks” played any
role at all in the water intrusion, such role would have been'a “remote”. cause.
Therefore, the “cracks” were not a valid ground for exclusion of coverage under California
Supreme Court law cited and. quoted herein and in the accompanying document on
“Applicable California Law”
Because your denial of coverage specified that your claim of exclusion is primarily
based upon the “stress crack” rationale, the following technical discussion is set forth to
supplement the unanimous opinions of our experts.and that of the Contractor who actually
did the destructive examination, discovered and traced the cause of damage, and effected
the necessary repairs.
“Cracks.in stucco”: Contractor assures cracks in the stucco were not the source of
water intrusion: Your own engineer also reports the insignificant nature of the “cracks”
“Linear cracks less than. 1/16 inch wide, with sharp and painted edges,
riented diagonally, are random in the reportedly replaced interior wall
drywall throughout the house (Photograph 26). The wall.cracks primarily
extend from the corners of the doors and windows. No stains, bulged spots,
or.delaminated paint spots are in the interior wall and ceiling drywall”
(Emphasis added.)
Contractor explains
“Linear cracking is from interior work needing to be done before exterior
work due to owner occupancy, is superficial and will be touched up upon
completion of exterior work.” The hairline cracks are normal and expected
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on smooth troweled stucco. They don’t even need to be touched up:. (Please
see also expert opinion of California Construction Services.)
Your adjuster also found the visible signs of water intrusion damage. In uhis
“partial denial letter of 9/9/19, Jacob Lee states:
(As heretofore brought into question, exactly where in the policy is there such a
limit for this “water damage” ?)
Jacob Lee also mistakenly concludes:
«We are unable to. extend coverage for stress cracks as damage due to settling
shrinking, bulging or expansion, including resultant cracking of pavements,
patios, foundations, calls, floors, roofs. or ceilings. Please see the policy language
below for which I am unable to extend coverage for your “stress crack” repairs at
this time.” (There were zero claims or charges for “stress crack” repairs because
there was no such repair work necessary nor performed.) ?
“Water damage” was the subject of the water repairs not at the superficial
cracks, but at the openings themselves and said damage starting and migrating
directly therefrom, not any “cracks” which did not cause such damage.
Even your own engineer admits the sources of the water damage were the openings,
not the cracks
“The cracks in the stucco covering the house’s exterior walls were caused by
normal expansion and contraction of the materials as-a result of long-term” weather
exposure. The cracks in the stucco, particularly around the door and window
openings, have provided a pathway for moisture during past rains to infiltrate
through the cracks, entered the wall assembly, and into the interior of the house.”
It appears that the engineer does not have sufficient knowledge regarding stucco.
The cracking of stucco, especially smooth troweled “Santa Barbara” finishes, is
perfectly normal. It is not considered a defect or a sign of poor construction. “Long term
weather exposure” does not cause cracking of the stucco. Furthermore, any water.
intruding from or by the exterior wall is eliminated as a problem because of the house
3 Another failed attempt to place the losses under thie category of an inapplicable exclusion. Please see
discussion on that discrete “long term” subject infra.
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wtap or Water Protective Barrier (“WPB”)* underneath the stucco. The minor cracking of
the surface is generally considered irrelevant to the moisture protection. The engineer also
advances yet another conclusion diréctly contrary to the evidence and characteristics of the
stucco. He states that the cracks “provided a pathway for the moisture to enter thé interior
of the house. This conclusion appears to be made. without evidence of failure of the house
wrap underneath the stucco, Many homes have cracks in the stucco for years without any
water intrusion to the interior,
Insofar as your engineer refers to “pathways” for the water, our.experts opine that
wind pressure pushed the seal where stucco starts and windows stop, the seal located at
that location is broken. (In this case by high winds combinéd with driving rain.) Once
that happens, the expansion of the wood in that area makes it vulnerable to the water
penetration through.the water proof membrane. To some extent, the stucco. holds the
water back, but whatever water intrusion successfully penetrates the Water Protective
Barrier (“WPB”), sometimes referenced as Water Resistant Barrier. (paper and oil in the
paper) provides the protection. (Described as “roofing paper” before “Weather Protective
Barrier” paper was developed and used). Therefore, the water penetration is not caused
by any stress cracks, but by the separation which occurs at the point of the change in the
building materials (where the stucco starts and windows stop).
Stucco, itself, is not the WPB, but is designed to absorb water allowing it to turn
into a vapor and be released back into the air. Again, the more detailed explanation of this
process is contained in the opinions by California Construction Services and statement of
Pat Moffett submitted separately.
By Failed attempt to confuse “water damage” vis a vis “mold/rot damage”
addressed in the Endorsement:
The patently false assertion that “Water Damage” is included within the
same exclusions and limitations of coverage as are the clear, express “Mold/Rot”
additional coverage, exclusions and limitations in the Endorsement.
GEICO/HOMESITE’s stated position:
“We provided coverage for the ensuing water damage and
the rot damage up to your mold/rot coverage limit of
$2,500.00. (Another non-sequitur.)
1. Nothing we can see in the “mold/rot” endorsement (neither in the
4 Please sce discussion on that WPB subject infra.
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title, nor in the body of that endorsement,) references the “water damage intrusion”
damages which the parties agree existed. This is so clear that it is difficult to comprehend
what remote justification there was for this misdirection????? Even your own adjusters
madé that obvious distinction clear.
2. Inapplicable water damage exclusion #1: The only types of
water damage included within the Coverage A exclusion at 12. e. (“plumbing, heating,
air conditioning or automatic fire protective sprinkler system or household appliance)
none of which are involved in this claim. There appears to be additional original definition
of excluded'water damage at 11 c of Section C “Exclusions” which are equally
inapplicable.
3. Inapplicable water damage exclusion #2: On page eight; the
policy lists other clearly inapplicable water damage exclusions such as flood water; water
backing up from sewers, and water coming from the ground, As in sub A supra, none of
these water damage exclusions are applicable to the Clampetts’ loss either.
Junction
Presumably, Insurer knows how to write and exclude “rain and wind,
storm damage.” GEICO/HOMESITE now wants to insert that language after the
loss. Indeed, if Insurer wished to include water damage in the limitations and
exclusions, it would have been simple and effective to provide in the Endorsement
referring to limitations:
“Water Damage” coverage is also limited to $2,500.00. Nothing comes close to
this readily available and effective exclusion language. Once again, if the ALL RISK
policy does not exclude a given risk, it is included in the ALL RISK coverage.
To the extent Insurer is relying upon-the reference to “seepage” to be water
damage, that category of damage is expressly excepted from that exclusion.
4. Inapplicable water damage exclusion #3: On page'5 the policy
has an exclusion for “Windstorm or Hail” damage to “Landlord’s Furnishings” “unless
the direct force of wind or hail damages the building causing an opening in a roof or
wall and the rain... enters through this opening”. This is a potential typical exclusion
that appears on many policies. However, Clampetts’ policy covers the “water damage” for
intrusion of water notwithstanding the existence or non-existence of a wind created
opening. In some policies this type of exclusion would also apply to water damage to the
Dwelling itself. Clampetts’ policy, however, does not have such an exclusion for
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interior water intrusion damage to the dwelling from such storm damage, The
exclusion-only relates to“furnishings”. In a separate paragraph, reference is made to
personal property, but not to “Dwelling”. Therefore, because the Clampett home
suffered wet drywall and wooden interior work, (often identified by stained, saturated
wood and drywall, caused by wind-driven rain (water damage) which it admittedly did, the
policy would cover the damage.whether or not there was any: “wind created opening” to
the roof or walls. In addition, and significantly, all of the adjusters and
representatives of GEICO/HOMESITE has correctly. acknowledged that “Coverage
A” includes water damage to Dwelling. Therefore, please cite and quote the
paragraphs and specific language in the ALL RISK policy which excludes or limits
the typeof water intrusion damage which was repaired by Hometek and paid for by
Clampetts.
Admitted evidence of water damage vs, mold/rot:
Your engineer describes the obvious water damage. revealed by the
discolored (dark) wood stains described in the last 1 on p.2:
“The darkly stained wall framing found during this study, indicate
that-the wall framing was subjected to long-term moisture exposure”. (water
damage). In addition, he admits other extensive water damage:
Page 312: Dark stains are random on the metal lathe and wall
wraps, primarily around the top portions of the doors and windows
(Photographs 18 and 19), Several areas of the wall wraps are darkly stained
and deteriorated (Photograph 20). A combination of light and dark stains is
‘on the faux-headers above the doors and windows (Photograph 21). Dark
stains are on the wood framing members adjacent to the doors and
windows where the wall wraps are deteriorated or ripped (Photograph 22).
(Emphasis added.)
Contractor affirms the above findings of your engineer effectively admitting
that those conditions existed. Therefore, destructive examination repairs thereof
were necessary in any event because of the water damage alone.
Thus, Clampetts’ policy is different than you folks appear to assume in that it does
not contain any such exclusions for water damage to the dwelling. It appears that your
adjuster and engineer necessarily made pointedly erroneous, self-serving assumptions
regarding the type of coverage the policy affords, and conducted an investigation designed
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to reach a conclusion that would allow a denial based on thé same language contained in
the exclusions which don't even exist in Clampetts’ policy. Such unfounded assumption
do not satisfy your burden to explain exactly what specific language in your policy
excludes water. damage not subject to an exception.
C. “Long Term Damage” is not excluded from coverage and to the
extent Insurer strains to imply that it is, any such hidden, “long term” damage
unknown to owners is expressly excepted from any such implied, non-existent
exclusion.
Language which could be conceivably construed as creating such an effective
exclusion is hereinafter cited, quoted and rebutted in detail.
Although the majority of the damages occurred relatively recently, long term.
(water) damage is not excluded nor limited in this ALL RISK policy, as it is in some
other policy forms: Because some policies exclude “long term damage” your adjusters
apparently, but incorrectly, conclude that Clampett’s “ALL RISK” policy also contains
such an-exclusion without the exception which is in play here. The only specific reference
to such an exclusion runs headlong into the nullifying specific exception from such an
exclusion. For example, your other adjuster, Mr. Linard, states-on page 2 of his “Activity
Report” dated 9/6/2019, that “The rot, mold, and long term damages will fall under the
$2,500.00. limit”, and adds: “The rot, mold, and long term water damages are
extensive...If all rot and Jong term damages were included the cost of repairs would
likely exceed $100,000.00"°. (Emphasis added to stress that your adjusters have not
considered this distinction, exception and admission of the obvious.) This reference
appears to be the closest any of your adjusters and engineers come to‘admitting that the
initial numbers they put in play with the tender are outrageously misleading. Thus, there is
compelling proof that the fact that this claim has been handled by your appropriate
designation and processing of the claim by your “large loss” department.
The only potentially long term damage which relates to the Clampett claim and
policy is damage “unknown” to the insureds, and “hidden from, the insureds, until it was
discovered and specifically referenced at the Endorsement adding 1 2.¢.(9) in the section
entitled: “Smog, rust or other corrosion”, That language (failing to reference water
damage), renders the otherwise excluded “seepage” ’ (of water or pollutants) as a specific
exception to the covered loss.
5 More accurately: far, far exceed the amount of your “initial payment.”
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In addition, on December 31, 2019, Jason Lee called Mr. Clampett and advised
him, among other things, that one of the exclusions was “Jong term” damage and that was
one of the reasons for partial denial. Both'Mr. Linard and-Mr. Lee attempted to bundle
“water damage” together with “mold/rot (exclusions and limitations) to make it appear that
water damage was similarly limited or excluded:
Do you have any other opinions which purport to apportion or evaluate water
damage vis a vis. mold/rot damage, or do you continue to adopt Mr. Linard’s.60/40
split?
If all of the damage is “long-term damage”, what is your. present description of any
and all detailed evidence that it is “long term” vs. “not long term”:
Most importantly, in the event you contend there is no coverage, or that there
is limited coverage for “long term damage”, please quote and cite the exact policy,
provisions and paragraph(s) which so provide, and explain why you believe the same
to apply to water damage vis a vis mold rot damage?
Perhaps your adjuster and engineer assumed that.one form of fairly standard
insurance policy specifically excludes some types of water damage which uses some, but
not all, of the language in the Clampetts’ policy which-exists in some cases, for example:
[s]eepage, meaning continuous or repeated seepage.or
leakage over a period of weeks, months, or years, of water
from, within or around any plumbing fixtures, including
++ Sinks,”
Although the language in some policies of “over a period of weeks, months, or
years, of water...” in the above irrelevant policy is similar to Clampetts’ policy, but
that is where the similarity stops, at least in the decisions we have cited and quoted in
the “Applicable California Law” Section.
Everything you have provided fails to distinguish between water damage and
mold/rot damage, and specific language of the policy addressing same. You are inferring,
perhaps based upon your experience with other, different policies, that there is no
distinction. Here is.your opportunity to. make reference to any provisions of the policy
which prove that there is no distinction between water damage and mold rot.damage?
Here, your engineer is focusing on “long-term damage”, likely due to his training in
writing reports which assist insurance companies in denial of claims based upon
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exclusions of those conditions. It is generally true that long-term damage is sometimes
excluded from coverage. However, that is not the case with the Clampetts’ policy which
does not exclude or limit long term water damage and provides a limited scope of
application to furnishings and personal property only. By this time, you-are no doubt
aware of California case law holding the insurer at the time of discovery of loss
responsible for long term damage. Our experts in water intrusion and stucco strongly
disagree with the entirety of Mr. Nguyen’s unsupported non sequitur conclusion that the
covered water damage was caused by “stress cracks”. However, even assuming arguendo
they are true, they don’t count because “stress cracks” most certainly were not the efficient
proximate cause of the damage repaired at such great expense.
‘Defective workmanship/weep screeds”.
The top of page’9 of the policy [9 of 17 at 1(2)]contains an exclusion for damage
from faulty construction. This exclusion does not apply. The cause of loss is the wind-
driven rainwater intrusion, not any defect per se. For the layman, poor construction might
be thought of as a “cause”. However, the cause for insurance purposes is water intrusion
from (wind driven) rain. This fact was acknowledged in earlier reports and coverage
admitted and extended therefore as hereinafter described. More importantly, similar to
the role of any “cracks”,
Preview
BARBARA J. MANDELL (SBN 106523) MATTHEW W. BALMUTH (SBN 291675) MANDELL, DAMON & ASSOCIATES, LLP 15760 Ventura Blvd., Suite 880 Encino, California 91436 Tel. (818) 564-4023 | Fax (877) 759-1414 E-mail:barbara@ mandellfirm.com matthew@ mandellfirm.com Attomeys for Defendant, HOMESITE INSURANCE COMPANY OF CALIFORNIA SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF MONTEREY 10 11 ROBERT CLAMPETT, an individual, and Case No.: 21CV 001804 12 MARIANNA CLAMPETT, an individual, Hon. Carrie M. Panetta Dept.: 14 13 Plaintiffs, TABLE OF DECLARATIONS AND 14 EXHIBITS IN SUPPORT OF DEFENDANT HOMESITE 15 INSURANCE COMPANY OF CALIFORNIA’S MOTION FOR 16 SUMMARY JUDGMENT, OR IN THE HOMESITE INSURANCE COMPANY OF ALTERNATIVE, SUMMARY 17 CALIFORNIA, a Califomia corporation; DOES ADJUDICATION - VOLUME THREE 18 1 through 10, inclusive, Concurrently filed documents: 19 [Notice of Motion and Motion for Summary] Defendants. Judgment, or in the alternative, Summary 20 Adjudication; Separate Statement of Undisputed Material Facts; Request for 21 Judicial Notice; Declarations of Barbara Mandell and Scott Callahan; and Proposed 22 Order] 23 Date: Au st 11, 2023 Time: 8:30 am. 24 Dept.: 14 25 Complaint Filed: June 3, 2021 Trial Date: September 18, 2023 26 27 Il 28 Il 1 TABLE OF DECLARATIONS AND EXHIBITS IN SUPPORT OF DEFENDANT HOMESITE INSURANCE COMPANY OF CALIFORNIA’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION Defendant HOMESITE INSURANCE COMPANY OF CALIFORNIA (“Homesite”) submits the following Table of Declarations and Exhibits in support of Homesite’s Motion for Summary Judgment, or in the alternative, Summary Adjudication. EXH. DESCRIPTION NO. Declaration of Scott Callahan Declaration of Barbara J. Mandell Plaintiffs’ homeowner insurance policy no. 35116833 10 Homesite’s pertinent claims notes 11 Notification of loss assignment 12 Jacob Lee email to Plaintiffs after claim assignment 13 Ryze Claims Solutions assignment acknowledgement and Jacob Lee’s email to 14 Plaintiffs concerning Ryze’s retention 15 Emails between Jacob Lee and Charles Linard on August 27" and 28" of 2019 16 Charles Linard’s final repair estimate, photographs and final IA report 17 Partial denial letter dated September 9, 2019, Jacob Lee email to Plaintiffs advising 18 of payment, Homesite email and payment notice 19 Robert Clampett’s email to Jacob Lee dated December 17, 2019, and Tom Long 20 supplemental repair bid 21 Jacob Lee’s letter to Plaintiffs dated December 26, 2019 22 Robert Clampett’s letter to Jacob Lee dated April 8, 2020 23 Jacob Lee’s email to Robert Clampett on April 9, 2020 24 Jacob Lee’s email to David Hollingsworth on April 14, 2020 25 Tammy Brown’s April 21, 2020 letter to Plaintiffs 26 Donan engineer report with accompanying photos, dated May 20, 2020 27 P Tammy Brown’s email to David Hollingsworth on May 27, 2020 28 Q Tammy Brown’s letters to Plaintiffs from June to August 2020 TABLE OF DECLARATIONS AND EXHIBITS IN SUPPORT OF DEFENDANT HOMESITE INSURANCE COMPANY OF CALIFORNIA’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION David Hollingsworth’s written response to Donan report with accompanying opinions from California Construction Services and Blue Sky Consulting, Inc. David Hollingsworth’s “Briefon Applicable California Law” Denial letter dated September 22, 2020 David Hollingsworth’s written demand for appraisal; Tammy Brown’s email to Hollingsworth on November 20, 2020 Appraisal award dated May 6, 2021 Denial letter dated May 12, 2021 Records subpoena served on Hometek and certain records produced 10 Robert Clampett’s verified discovery response to Special Interrogatory Nos. 5, 47- 11 49 12 Relevant portions of deposition transcript of Scott Callahan 13 AA Relevant portions of deposition transcript of Charles Linard; two status reports 14 attached as “exhibits 14 and 15” of depo transcript 15 BB Relevant portions of deposition transcript, Volume I, of Tom Long 16 CC Relevant portions of deposition transcript, Volume I, of Plaintiff Robert Clampett. 17 DD Relevant portions of deposition transcript, Volume I, of Plaintif Marianna Clampett 18 EE Relevant portions of deposition transcript of David Parker 19 FF Relevant portions of deposition transcript, Volume II, of Plaintiff Robert Clampett. 20 GG Relevant portions of deposition transcript, Volume II, of Plaintiff Marianna 21 Clampett ; text message attached as “Exhibit Q” of depo transcript 22 HH Relevant portions of deposition transcript of Phu Nguyen 23 Request for Judicial Notice 24 Plaintiffs’ Complaint filed on June 3, 2021 25 Plaintiffs’ Petition to Confirm Appraisal Award filed on September 23, 2021 26 3 Court’s Entry of Judgment on December 6, 2021 re: Petition to Confirm Appraisal 27 Il 28 Il 3 TABLE OF DECLARATIONS AND EXHIBITS IN SUPPORT OF DEFENDANT HOMESITE INSURANCE COMPANY OF CALIFORNIA’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION Dated: May 16, 2023 MANDELL, DAMON & ASSOCIATES, LLP. By: frere Mfiaatilg BARBARA J. MANDELL MATTHEW BALMUTH Attommeys for Defendant, HOMESITE INSURANCE COMPANY OF CALIFORNIA 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 TABLE OF DECLARATIONS AND EXHIBITS IN SUPPORT OF DEFENDANT HOMESITE INSURANCE COMPANY OF CALIFORNIA’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION Exhibit R LAW OFFICES OF DAVID M. HOLLINGSWORTH 1474 DEER FLAT ROAD, MONTEREY, CALIFORNIA 93940 TELEPHONE (831) 375-3135 + FAX (831) 375-3883 dmblaw@comeast net DAVID M. HOLLINGSWORTH August 26, 2020 ANS Ms, Tammy Brown Large Loss Adjuster. Phone 801-559-8143 laims@homesite.com Homesite Insurance Company PO Box 5300 Binghamton, NY 13902 Subject: RE: [EXTERNAL] RE: Claim 2490048 Dear Ms. Brown: Here is our promised response. I am confident that if I have failed to address any applicable provision of the policy which addresses water damage or any other issue which stands between a resolution, you will bring that to my attention. Summary of Facts and ALL RISK Policy The Parties: Bobby Clampett and Marianne Clampett are the owners of a 4,200+ square foot home at 27467 Schulte Road, Carmel Valley, California. (“Dwelling”) Their home is located at the crest of an eleven hundred forty four foot Ridgeline! framing Carmel Valley. * Bobby Clampett is a nationally known professional golfer and CBS announcer who broadcasts some of the top flight professional golf tournaments on the PGA tour, Dwelling: was built in 1998 pursuant to permits and inspection approvals of the County of Monterey. . “Contractor”, Tom Long: Analysis of Loss He Discovered, Examined Via Destructive Testing, Estimated, Bid and Repaired: ) At the master bedroom deck. Clampett356 Tom Long (hereinafter designated “Contractor”) is a long time licensed general contractor (22 years) of working on the Monterey Peninsula and-Carmel Valley. He had done extensive, extremely satisfactory renovation work in-Clampett’s neighborhood on the Schulte Road Ridge. Mr. Long is the licensee, owner and CEO of Hometek, Inc., a well known and reputable general contractor (“Contractor”), from Pacific Grove. After Clampetis discovered some ill-fitting doors in their residence in August of 2018, they. called neighbors/friends to get referrals of a contractor who might help them: Several extremely complimentary recommendations were made of the proficiency, honesty and reliability of Contractor. . Initially, in August, 2018, it was decided to replace all doors and windows which no longer worked as smoothly as before. Contractor also undertook examination of Dwelling, including destructive examination and testing, of walls, floors, ceilings and all door and window openings (56 altogether) Here is how Contractor explains his retention and examination of the subject damage. (The typos in his original report have not been corrected, but quoted as is) “On or about August 15, Mrs. Clampett had me come to their home to investigate water dripping from the cciling of the garage, ponding on the window sills throughout the house, and wet carpets in the downstairs bedrooms. I did not observe or smell any mold, or see any dry-rot. On August 22 of 2019, my company started water damage investigation at the Clampett residence, 27467 Schulte Road, Carmel, California, We began in the garage area under the second floor balcony Jooking for water intrusion in the celling framing. Our inspection lead us into the wall framing on the second floor window and door assembly at the balcony area, consisting of demolition exploratory work to trace the source of the-water, and exposed hidden water damage in the wall. assembly’s. Dry-rotted framing was uncovered, removed and replaced, waterproofed from. the elements and we then moved to the next window in the garage and found a similar scenario on the garage window and the second floor window above it. 1 suggested to Mr. Clampett that he might contact his insurance company, he did, and they out an adjuster. Work continucd, the adjuster arrived, reviewed the work in progress and surveyed the rest of the residence, noting many areas of water intrusion. Work continued in a methodical clockwise pattern around the residence finding water intrusion-at almost every door.and all windows. All replacement window and door assemblies were damaged by water and wind, Window and door framing was damaged by water intrusion leading to the discovery of dry-rotied framing, and framing replacement was mandatory. Windows and doors were not re-usable and new doors and windows were ordered. Dry rot was confined to framing components at window and door locations, and the remediation approach was removal and replacement of affected wall framing components. All infected material was removed from site weekly to a landfill site, All adjoining areas were treated with fungicide to prevent any future growth of mold spores. No black mold was.found. Framing was completed, doors and windows installed, insulation installed, WRB on exterior, lath, sheetrock and stucco. Painting is ongoing. Clampett357 All of the damaged areas required inspection, evaluation, steps to protect the area from further damage, and repairs of both the water saturated areas and mold/rot. The purpose of said repairs.was not only to restore, but to halt, protect against, preempt-and mitigate the extensive damage already done. Contractor’s bid and conforming billing in the amount of $565,612.00 has been completely paid by Clampetts for all work done.so far, not including approximately $30,000.00 (still in process) . As one of the many. percipient witnesses of the damages and repairs, Contractor is particularly competent to testify as to both the damaged condition, the cause therefore, and:the detailed repairs which he bid, contracted for and performed. The claim has been amended to add the $15,612.00 damages done to the exterior deck adjoining the master bedroom necessarily done to perform the necessary corrections which were the subject of Hometek’s billing. Naturally, he is the most percipient witness of the probative facts as well as an eminently qualified expert. The nature and extent of the above damage was originally hidden from view and unknown to Clampetts, but ultimately discovered to arise from a combination of mostly water intrusion and, to a lesser extent, by conditions of mold/rot, all of which were. located, designated and repaired only after intensive destructive testing and examination. {It is conceded that mold/rot conditions were limited by the Clampett policy, but nevertheless may be collectible because of the doctrines of “concurrent cause” and “efficient proximate cause” hereinafter discussed in detail and described in the Separate paper on. “APPLICABLE CALIFORNIA LAW”..] Further, all of the expensive destructive testing to locate, evaluate and repair covered water damage had to be done in any event, notwithstanding the existence of mold/rot conditions. In other words, it was necessary to do the same destructive examination to locate and repair the water damage as it would have taken to locate and examine the nature and extent of the mold/rot water damage. Once discovered via destructive examination, all of said damaged areas, (water intrusion, mold and rot) required removal and replacement. ‘At all of the times herein mentioned, Clampetts have demonstrated a willingness to expend substantial funds for destructive testing and repair even though GEICO/HOMESITE has thus far stubbornly withheld meaningful contribution. Both GEICO/HOMESITE and Clanipetts have obtained professionals to advise regarding estimates of the costs of repair of these two separate categories. Water damages are covered, Mold/rot damages are covered, but limited to only $2,500.00, which has been paid. . Water intrusion damages are claimed by GEICO/HOMESITE to be limited to $7,500.00, which they have remitted as.part of its “initial payment to you” totaling 3 Clampett358. $10,389.27. However, even at this late date of the négotiations, Insurer has been unable to cite or quote any applicable “water damage” exclusions in the ALL RISK policy which are not subject to specific exceptions. The parties also vigorously differ on whether apportionment is appropriate or not as hereinafter specifically described, Clampetts claim apportionment is not necessary because, according to the California Supreme Couit, where a loss was caused by two perils, one covered by insurance and one excluded, the loss was covered in its entirety if the covered peril was the “efficient cause of the loss”. Therefore, ‘it is clear that water-intrusion was the “efficient proximate cause (“EPC”) of the loss”, and the entire loss would therefore be covered. Sabella vs. Wisler, (1963) 59 Cal.2d 21, 33-34 and its California progeny. (discussed herein and in the accompanying Brief on “Applicable California Law” and quoted therein in detail.) Insureds claim that it was not any superficial “cracks” that caused the. damage, but the covered wind driven water intrusion. (There is no competent evidence that “stress cracks” were caused by “stress”, or that if it they did exist they were not the EPC of the water damage as hereinafter explained and documented. The unanimous opinions of Clampetts’ experts is that it was not stress which caused any cracking. In fact, even assuming arguendo cracks caused or contributed to the water damages, that condition was certainly not the efficient proximate cause of the loss.’ Please see California Statutes (Ins. Code §§730-732 and the California Supreme Court on point decisions hereinafter quoted. The ALL RISK Insurance Policy Coverage: Presumptions and Burdens: The “ALL RISK” Policy and rules of interpretation: The Clampett home is insured on the HO 00 03 04 91 form. This appears to bea top of the line “ALL RISK” policy. Under the section entitled “Perils Insured Against”: it provides“we insure. against risk.of direct physical loss to. property”. And then it goes on to list absolutely necessary specific exclusions to that coverage. If some risk is not excluded, it is covered. Of course, the exclusions must be narrowly interpreted in favor of the insured. The burden of proof is on the carrier to prove any specific alleged exclusion applies. It should be noted that Clampetts’ premium was more than doubled the year following their claim from 2019: $2509.00 to 2020: $5833.00 per year. (213%) Exactly why was this savage increase effected, and how was it calculated?? The unilateral boost effectively and immediately repaid to. GEICO/HOMESITE $3,224.00 of the meager $10,380.27 “benefit” grudgingly paid out for a loss of well over half-million dollars. To put this in perspective, Clampetts paid an annual premium of $1,434.00 for their annual property insurance premium for the year next immediately preceding their entrustment of their property insurance to GEICO/HOMESITE. Thus, they are now 4 Clampett359 suddenly paying over four times their former annual premium to GEICO/HOMESITE due to no fault of their own. Over ten years, if they stay with GEICO they will therefore be paying an extra $40,000.00 plus to. GEICO/HOMESITE although their only “sin” {although they did nothing wrong) was to make a valid claim ?2?? Therefore, the meager sum remitted to the insureds, combined with the boosted premium, perhaps explains why some insurance companies are so wealthy. Clampetts had no input whatsoever to. the 213% and plus 400% increase in their premiums, and no opportunity to discuss or negotiate it, or even to obtain an explanation before they were billed for the new, inflated coverage. ' SUMMARY OF RELEVANT TERMS OF POLICY (Analysis of All Provisions Which Could Conceivably Exclude Water Damage) LL “Section L PROPERTY COVERAGES” insures the Dwelling on the residence premises; page 2 of 17; 2. “Section 1, PERILS INSURED. AGAINST: insures direct loss to property Described in Coverages A and B only if that loss is a physical loss to property. Then follows specific exclusions, including the exclusion which is one of the subjects of the present dispute. 3. ENDORSEMENT: “LIMITED FUNGI, WET OR DRY ROT, OR BACTERIA COVERAGE”, Please note: no reference of water damage in title. However, the body of the Endorsement adds: a new 12.2.9) Purports to exclude from the exclusion “repeated seepage...over a.period of weeks, months or years unless unknown to all insured and is hidden within the walls r ceilings or beneath the floors or above the ceilings of a-structure”, Therefore step one excludes coverage for seepage, but said following language expressly removes (excepts from the exclusion) damage which was “hidden” and “unknown” to the insured, which it most certainly was. “SECTION 1-EXCLUSIONS” Page 8 of 17 does directly address in section Lc. “WATER DAMAGE” which appears to explain to the insured exactly what types of water damage are excluded. Those provisions which exhaustively define excluded water coverage are devoid of reference to the vital subject of the “efficient proximate cause” of this water damage. (Please contrast the misleading, complete absence of reference to water damage with the clear, specific exclusions of Clampett360 mold.and-rot damage.) Therefore, there are no relevant exclusions of water damage iin this ALL, RISK policy, and all ambiguities on that'subject are construed in favor of the - insured. There are a variety of other discrete issues which are hereinafter addressed Unfair Settlement Practices in Violation of Ins, Code Unreasonably Low Settlement Offers (“Lowballs”) (g) No insurer shall attempt to settle 4 claim by making a settlement offer that is unreasonably low. The Commissioner shall consider any admissible evidence offered regarding the following factors in determining whether or not a settlement offer is unreasonably low: (Emphasis added.) (4) the extent to which the insurer considered evidence submitted by the claimant to support the value of the claim; (Actual cost vs. low ball estimate”.) (Most contested claims consider conflicting “estimates” Actual cost cannot be denied) (2) the extent to which the insurer considered legal authority. or eyidence made known to it or reasonably available; (Cited and quoted herein and in brief on “Applicable California Law”, for your review. We are talking about California Supreme Court direct precedent and applicable California statutes.) (5) the procedures used. by the insurer in determining the dollar amount of property damage; (Totally inadequate “low ball” estimate must yield to actual cost.) (6) the extent to which the insurer considered the probable liability of the insured and the likely jury verdict or other final determination of the matter; (7) any other credible evidence presented to the Commissioner that demonstrates that (1) any amount offered by the insurer in settlement of a first-party claim to an-insured not represented by counsel, or (ii) the final amount offered in settlement of a first-party claim to an insured who is 6 Clampett361 represented by counsel or (iii) the final amount offered in settlement of a third party claim by the insurer is below the amount that a reasonable person with knowledge of the facts and circumstances would have offered in-settlemént of the claim (Emphasis added.) Also Prohibited! (6) Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by the insureds, when the insureds have made claims for amounts reasonably similar to the amounts ultimately recovered.” In any event, GEICO’S minimal offer is inconsistent with the message conveyed by its current intensive round of advertising. The offer of less than 1/50 (2%) of actual costs is a bad faith, “low ball” offer for all of the reasons herein stated, and even that amount is reduced by GEICO’S $3,500.00+ unilateral boost in premiums the year following the still unpaid, actual loss. The details of the unfortunate discrepancy are spelled out herein. Clampetts are distinctly unhappy with certain misleading concealments of material fact, half-truths and false representations, which have been made to support effective denial of coverage and to deter them from pursuing this valid claim. Therefore, I am providing herein documented facts and relevant California case law (including indisputable, on-point holdings of our California Supreme Court) to demonstrate that there should be some sincere reconsideration about the following ill-considered positions and statements advanced by GEICO/HOMESITE Insurance in very effectively denying coverage. - The compounded effect of the following misleading, incorrect statements by GEICO/HOMESITE to attempt to justify effective denial of the claim by attempting to liquidate the coverage in a completely different universe of damages ($10,380.27 paid and $14,559.05 gross) rather than the indisputable ACTUAL costs of repair ($565,612.00). Please note: said Jatter number is not an estimate, but the ACTUAL cost of repairs, almost the entirety of which has been paid by your insureds, with the assistance of only the meager $10,380.27 thus far paid on account. Jacob Lee, the adjuster assigned to the case before he was replaced by you, wrote 7 Clampett362 Mr. and Mrs. Clampett with an “EXPLANATION OF THE PARTIAL (woefully inadequate) CLAIM PAYMENT” on September 9, 2019, GEICO/HOMESITE represented to its insureds that the purpose of said document was.as follows: “Please carefully review the entire document as it contains additional “information how your payment amount was calculated and why a | ortion of the loss? was denied.” (Emphasis added.) Page 2:1-3. Please. note: The complete title of the Endorsement HH 04 32 09 02.is in bold capitalized print upon which you rely to limit coverage is: “LIMITED FUNGI, WET OR DRY ROT, OR BACTERIA. COVERAGE” ENDORSEMENT Please Note: There is no remote reference in said title, nor in the detailed descriptions of the specific exclusions and limitations to the subject of this claim which follow to : “water intrusion damage”. The following outright misrepresentations, half-truths and concealment constituted the leverage and purported grounds to discourage pursuit of this valid claim. Fittingly, it “might be said that none of the expressly stated reasons apply in that they patently fail to “hold water”. SUMMARY OF PURPORTED “GROUNDS” OF DENIAL AND RESPONSES A. Alleged “stress cracks” as “ground” for denial. Superficial Cracks were not caused by stress: (When, where and why did such “stress occur?) This conclusion as to the nature of the cracks is pure speculation by the original adjuster, Charles Linard, who is apparently not competent to make such a conclusion, but nevertheless advanced.the same to fit the terms of the purported exclusion language in the policy (“cracks”). Mr. Nguyen, your engineer, just perpetuated that pointed error. B. The cosmetic cracks are not the “efficient proximate cause” (“EPC”) of the water intrusion damage. “The “cracks” in the drywall were superficial, cosmetic cracks to be expected in a “Santa Barbara finish”, and were not the Please see the two accompanying, specialist written opinions clarifying that mistaken conclusion by your 2 Almost in its entirety, Clampett363 adjuster, and engineer. Patrick Moffett is a highly respected “water intrusion” expert-who has “written the book” on water intrusion, and is the “rock star”, on that limited subject, Jason Schlesinger of California Construction Services is a long time general contractor highly specialized in the discrete subject of stuccodynamics. Those opinions not only directly conflict with the originator of the fiction of the role of.“cracks” in the water intrusion, but explain exactly why your representatives are mistaken. 4 1. Location of water and water damage: The water and water intrusion damage discovered by destructive examination was not located at the cracks, but at the 56 door and window units which openings were all replaced by the repairs for which your insured (heavily) paid. 2. In the unlikely event that the superficial “cracks” played any role at all in the water intrusion, such role would have been'a “remote”. cause. Therefore, the “cracks” were not a valid ground for exclusion of coverage under California Supreme Court law cited and. quoted herein and in the accompanying document on “Applicable California Law” Because your denial of coverage specified that your claim of exclusion is primarily based upon the “stress crack” rationale, the following technical discussion is set forth to supplement the unanimous opinions of our experts.and that of the Contractor who actually did the destructive examination, discovered and traced the cause of damage, and effected the necessary repairs. “Cracks.in stucco”: Contractor assures cracks in the stucco were not the source of water intrusion: Your own engineer also reports the insignificant nature of the “cracks” “Linear cracks less than. 1/16 inch wide, with sharp and painted edges, riented diagonally, are random in the reportedly replaced interior wall drywall throughout the house (Photograph 26). The wall.cracks primarily extend from the corners of the doors and windows. No stains, bulged spots, or.delaminated paint spots are in the interior wall and ceiling drywall” (Emphasis added.) Contractor explains “Linear cracking is from interior work needing to be done before exterior work due to owner occupancy, is superficial and will be touched up upon completion of exterior work.” The hairline cracks are normal and expected 9 Clampett364. on smooth troweled stucco. They don’t even need to be touched up:. (Please see also expert opinion of California Construction Services.) Your adjuster also found the visible signs of water intrusion damage. In uhis “partial denial letter of 9/9/19, Jacob Lee states: (As heretofore brought into question, exactly where in the policy is there such a limit for this “water damage” ?) Jacob Lee also mistakenly concludes: «We are unable to. extend coverage for stress cracks as damage due to settling shrinking, bulging or expansion, including resultant cracking of pavements, patios, foundations, calls, floors, roofs. or ceilings. Please see the policy language below for which I am unable to extend coverage for your “stress crack” repairs at this time.” (There were zero claims or charges for “stress crack” repairs because there was no such repair work necessary nor performed.) ? “Water damage” was the subject of the water repairs not at the superficial cracks, but at the openings themselves and said damage starting and migrating directly therefrom, not any “cracks” which did not cause such damage. Even your own engineer admits the sources of the water damage were the openings, not the cracks “The cracks in the stucco covering the house’s exterior walls were caused by normal expansion and contraction of the materials as-a result of long-term” weather exposure. The cracks in the stucco, particularly around the door and window openings, have provided a pathway for moisture during past rains to infiltrate through the cracks, entered the wall assembly, and into the interior of the house.” It appears that the engineer does not have sufficient knowledge regarding stucco. The cracking of stucco, especially smooth troweled “Santa Barbara” finishes, is perfectly normal. It is not considered a defect or a sign of poor construction. “Long term weather exposure” does not cause cracking of the stucco. Furthermore, any water. intruding from or by the exterior wall is eliminated as a problem because of the house 3 Another failed attempt to place the losses under thie category of an inapplicable exclusion. Please see discussion on that discrete “long term” subject infra. 10 Clampett365, wtap or Water Protective Barrier (“WPB”)* underneath the stucco. The minor cracking of the surface is generally considered irrelevant to the moisture protection. The engineer also advances yet another conclusion diréctly contrary to the evidence and characteristics of the stucco. He states that the cracks “provided a pathway for the moisture to enter thé interior of the house. This conclusion appears to be made. without evidence of failure of the house wrap underneath the stucco, Many homes have cracks in the stucco for years without any water intrusion to the interior, Insofar as your engineer refers to “pathways” for the water, our.experts opine that wind pressure pushed the seal where stucco starts and windows stop, the seal located at that location is broken. (In this case by high winds combinéd with driving rain.) Once that happens, the expansion of the wood in that area makes it vulnerable to the water penetration through.the water proof membrane. To some extent, the stucco. holds the water back, but whatever water intrusion successfully penetrates the Water Protective Barrier (“WPB”), sometimes referenced as Water Resistant Barrier. (paper and oil in the paper) provides the protection. (Described as “roofing paper” before “Weather Protective Barrier” paper was developed and used). Therefore, the water penetration is not caused by any stress cracks, but by the separation which occurs at the point of the change in the building materials (where the stucco starts and windows stop). Stucco, itself, is not the WPB, but is designed to absorb water allowing it to turn into a vapor and be released back into the air. Again, the more detailed explanation of this process is contained in the opinions by California Construction Services and statement of Pat Moffett submitted separately. By Failed attempt to confuse “water damage” vis a vis “mold/rot damage” addressed in the Endorsement: The patently false assertion that “Water Damage” is included within the same exclusions and limitations of coverage as are the clear, express “Mold/Rot” additional coverage, exclusions and limitations in the Endorsement. GEICO/HOMESITE’s stated position: “We provided coverage for the ensuing water damage and the rot damage up to your mold/rot coverage limit of $2,500.00. (Another non-sequitur.) 1. Nothing we can see in the “mold/rot” endorsement (neither in the 4 Please sce discussion on that WPB subject infra. 11 Clampett366 title, nor in the body of that endorsement,) references the “water damage intrusion” damages which the parties agree existed. This is so clear that it is difficult to comprehend what remote justification there was for this misdirection????? Even your own adjusters madé that obvious distinction clear. 2. Inapplicable water damage exclusion #1: The only types of water damage included within the Coverage A exclusion at 12. e. (“plumbing, heating, air conditioning or automatic fire protective sprinkler system or household appliance) none of which are involved in this claim. There appears to be additional original definition of excluded'water damage at 11 c of Section C “Exclusions” which are equally inapplicable. 3. Inapplicable water damage exclusion #2: On page eight; the policy lists other clearly inapplicable water damage exclusions such as flood water; water backing up from sewers, and water coming from the ground, As in sub A supra, none of these water damage exclusions are applicable to the Clampetts’ loss either. Junction Presumably, Insurer knows how to write and exclude “rain and wind, storm damage.” GEICO/HOMESITE now wants to insert that language after the loss. Indeed, if Insurer wished to include water damage in the limitations and exclusions, it would have been simple and effective to provide in the Endorsement referring to limitations: “Water Damage” coverage is also limited to $2,500.00. Nothing comes close to this readily available and effective exclusion language. Once again, if the ALL RISK policy does not exclude a given risk, it is included in the ALL RISK coverage. To the extent Insurer is relying upon-the reference to “seepage” to be water damage, that category of damage is expressly excepted from that exclusion. 4. Inapplicable water damage exclusion #3: On page'5 the policy has an exclusion for “Windstorm or Hail” damage to “Landlord’s Furnishings” “unless the direct force of wind or hail damages the building causing an opening in a roof or wall and the rain... enters through this opening”. This is a potential typical exclusion that appears on many policies. However, Clampetts’ policy covers the “water damage” for intrusion of water notwithstanding the existence or non-existence of a wind created opening. In some policies this type of exclusion would also apply to water damage to the Dwelling itself. Clampetts’ policy, however, does not have such an exclusion for 12 Clampett367 interior water intrusion damage to the dwelling from such storm damage, The exclusion-only relates to“furnishings”. In a separate paragraph, reference is made to personal property, but not to “Dwelling”. Therefore, because the Clampett home suffered wet drywall and wooden interior work, (often identified by stained, saturated wood and drywall, caused by wind-driven rain (water damage) which it admittedly did, the policy would cover the damage.whether or not there was any: “wind created opening” to the roof or walls. In addition, and significantly, all of the adjusters and representatives of GEICO/HOMESITE has correctly. acknowledged that “Coverage A” includes water damage to Dwelling. Therefore, please cite and quote the paragraphs and specific language in the ALL RISK policy which excludes or limits the typeof water intrusion damage which was repaired by Hometek and paid for by Clampetts. Admitted evidence of water damage vs, mold/rot: Your engineer describes the obvious water damage. revealed by the discolored (dark) wood stains described in the last 1 on p.2: “The darkly stained wall framing found during this study, indicate that-the wall framing was subjected to long-term moisture exposure”. (water damage). In addition, he admits other extensive water damage: Page 312: Dark stains are random on the metal lathe and wall wraps, primarily around the top portions of the doors and windows (Photographs 18 and 19), Several areas of the wall wraps are darkly stained and deteriorated (Photograph 20). A combination of light and dark stains is ‘on the faux-headers above the doors and windows (Photograph 21). Dark stains are on the wood framing members adjacent to the doors and windows where the wall wraps are deteriorated or ripped (Photograph 22). (Emphasis added.) Contractor affirms the above findings of your engineer effectively admitting that those conditions existed. Therefore, destructive examination repairs thereof were necessary in any event because of the water damage alone. Thus, Clampetts’ policy is different than you folks appear to assume in that it does not contain any such exclusions for water damage to the dwelling. It appears that your adjuster and engineer necessarily made pointedly erroneous, self-serving assumptions regarding the type of coverage the policy affords, and conducted an investigation designed 13 Clampett368 to reach a conclusion that would allow a denial based on thé same language contained in the exclusions which don't even exist in Clampetts’ policy. Such unfounded assumption do not satisfy your burden to explain exactly what specific language in your policy excludes water. damage not subject to an exception. C. “Long Term Damage” is not excluded from coverage and to the extent Insurer strains to imply that it is, any such hidden, “long term” damage unknown to owners is expressly excepted from any such implied, non-existent exclusion. Language which could be conceivably construed as creating such an effective exclusion is hereinafter cited, quoted and rebutted in detail. Although the majority of the damages occurred relatively recently, long term. (water) damage is not excluded nor limited in this ALL RISK policy, as it is in some other policy forms: Because some policies exclude “long term damage” your adjusters apparently, but incorrectly, conclude that Clampett’s “ALL RISK” policy also contains such an-exclusion without the exception which is in play here. The only specific reference to such an exclusion runs headlong into the nullifying specific exception from such an exclusion. For example, your other adjuster, Mr. Linard, states-on page 2 of his “Activity Report” dated 9/6/2019, that “The rot, mold, and long term damages will fall under the $2,500.00. limit”, and adds: “The rot, mold, and long term water damages are extensive...If all rot and Jong term damages were included the cost of repairs would likely exceed $100,000.00"°. (Emphasis added to stress that your adjusters have not considered this distinction, exception and admission of the obvious.) This reference appears to be the closest any of your adjusters and engineers come to‘admitting that the initial numbers they put in play with the tender are outrageously misleading. Thus, there is compelling proof that the fact that this claim has been handled by your appropriate designation and processing of the claim by your “large loss” department. The only potentially long term damage which relates to the Clampett claim and policy is damage “unknown” to the insureds, and “hidden from, the insureds, until it was discovered and specifically referenced at the Endorsement adding 1 2.¢.(9) in the section entitled: “Smog, rust or other corrosion”, That language (failing to reference water damage), renders the otherwise excluded “seepage” ’ (of water or pollutants) as a specific exception to the covered loss. 5 More accurately: far, far exceed the amount of your “initial payment.” 14 Clampett369 In addition, on December 31, 2019, Jason Lee called Mr. Clampett and advised him, among other things, that one of the exclusions was “Jong term” damage and that was one of the reasons for partial denial. Both'Mr. Linard and-Mr. Lee attempted to bundle “water damage” together with “mold/rot (exclusions and limitations) to make it appear that water damage was similarly limited or excluded: Do you have any other opinions which purport to apportion or evaluate water damage vis a vis. mold/rot damage, or do you continue to adopt Mr. Linard’s.60/40 split? If all of the damage is “long-term damage”, what is your. present description of any and all detailed evidence that it is “long term” vs. “not long term”: Most importantly, in the event you contend there is no coverage, or that there is limited coverage for “long term damage”, please quote and cite the exact policy, provisions and paragraph(s) which so provide, and explain why you believe the same to apply to water damage vis a vis mold rot damage? Perhaps your adjuster and engineer assumed that.one form of fairly standard insurance policy specifically excludes some types of water damage which uses some, but not all, of the language in the Clampetts’ policy which-exists in some cases, for example: [s]eepage, meaning continuous or repeated seepage.or leakage over a period of weeks, months, or years, of water from, within or around any plumbing fixtures, including ++ Sinks,” Although the language in some policies of “over a period of weeks, months, or years, of water...” in the above irrelevant policy is similar to Clampetts’ policy, but that is where the similarity stops, at least in the decisions we have cited and quoted in the “Applicable California Law” Section. Everything you have provided fails to distinguish between water damage and mold/rot damage, and specific language of the policy addressing same. You are inferring, perhaps based upon your experience with other, different policies, that there is no distinction. Here is.your opportunity to. make reference to any provisions of the policy which prove that there is no distinction between water damage and mold rot.damage? Here, your engineer is focusing on “long-term damage”, likely due to his training in writing reports which assist insurance companies in denial of claims based upon 15 Clampett370 exclusions of those conditions. It is generally true that long-term damage is sometimes excluded from coverage. However, that is not the case with the Clampetts’ policy which does not exclude or limit long term water damage and provides a limited scope of application to furnishings and personal property only. By this time, you-are no doubt aware of California case law holding the insurer at the time of discovery of loss responsible for long term damage. Our experts in water intrusion and stucco strongly disagree with the entirety of Mr. Nguyen’s unsupported non sequitur conclusion that the covered water damage was caused by “stress cracks”. However, even assuming arguendo they are true, they don’t count because “stress cracks” most certainly were not the efficient proximate cause of the damage repaired at such great expense. ‘Defective workmanship/weep screeds”. The top of page’9 of the policy [9 of 17 at 1(2)]contains an exclusion for damage from faulty construction. This exclusion does not apply. The cause of loss is the wind- driven rainwater intrusion, not any defect per se. For the layman, poor construction might be thought of as a “cause”. However, the cause for insurance purposes is water intrusion from (wind driven) rain. This fact was acknowledged in earlier reports and coverage admitted and extended therefore as hereinafter described. More importantly, similar to the role of any “cracks”,