JAY AND DEANNA CLASING, Husband and Wife, d/b/a JADE FARMS, Plaintiffs-Appellants, vs. STATE FARM FIRE AND CASUALTY COMPANY, Defendant-Appellee.
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IN THE COURT OF APPEALS OF IOWA
No. 8-1060 / 08-1237
Filed May 29, 2009
JAY AND DEANNA CLASING,
Husband and Wife, d/b/a JADE FARMS,
Plaintiffs-Appellants,
vs.
STATE FARM FIRE AND CASUALTY COMPANY,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Palo Alto County, Patrick M. Carr,
Judge.
Plaintiffs appeal the district court‘s grant of summary judgment to
defendant on their action alleging breach of an insurance contract. REVERSED
AND REMANDED.
Terry A. White and David A. Domina of Domina Law Group, P.C., Omaha,
Nebraska, and Michael R. Bovee of Montgomery, Barry & Bovee, Spencer, for
appellants.
Guy R. Cook and Allison J. Doherty of Grefe & Sidney, P.L.C., Des
Moines, for appellee.
Heard by Sackett, C.J., and Vogel and Miller, JJ.
2
SACKETT, C.J.
The plaintiffs appeal the district court‘s grant of summary judgment to the
defendant on their action alleging breach of an insurance contract. They contend
the court erred in granting summary judgment because (1) the proximate cause
of the loss of their hogs was an ice storm, not suffocation, (2) a dispute of
material fact existed whether their hogs suffocated or died of heat stroke, and (3)
the defendant insurer did not carry its burden to show it was entitled to judgment
as a matter of law. We reverse the grant of summary judgment and remand.
I. Scope and Standards of Review.
We review the district court‘s ruling on a motion for summary judgment for
correction of errors at law. Jones v. State Farm Mut. Auto. Ins. Co., 760 N.W.2d
186, 188 (Iowa 2008). The moving party is entitled to a judgment as a matter of
law ―if the pleadings, depositions, answers to interrogatories and admissions on
file, together with the affidavits, if any, show that there is no genuine issue as to
any material fact.‖ Iowa R. Civ. P. 1.981(3); see also Rodda v. Vermeer Mfg.,
734 N.W.2d 480, 483 (Iowa 2007). A fact question exists ―if reasonable minds
can differ on how the issue should be resolved.‖ Rock v. Warhank, 757 N.W.2d
670, 673 (Iowa 2008). An issue of fact is ―material‖ only when its resolution
might affect the outcome, given the applicable governing law.
Weddum v.
Davenport Cmty. Sch. Dist., 750 N.W.2d 114, 117 (Iowa 2008). We view the
record in the light most favorable to the non-moving party.
Kern v. Palmer
College of Chiropractic, 757 N.W.2d 651, 657 (Iowa 2008).
In determining
3
whether there is a genuine issue of material fact, the court affords the nonmoving party every legitimate inference from the record. Id.
II. Background Facts and Proceedings.
Viewed in the light most favorable to the non-moving party, the summary
judgment record reveals the following. The plaintiffs, Jay and Deanna Clasing,
operate a hog confinement operation under the name Jade Farms. In late 2006
there was a fire in their office, necessitating repairs. On February 26, 2007,
when an ice storm caused a power outage, the alarm system for the operation‘s
four swine barns was not operating because of repairs to the office. In three of
the four barns, ceramic curtains dropped when the electricity failed, allowing the
swine barns to ventilate despite the loss of power.
In the fourth barn, ice
prevented the curtain from dropping to allow ventilation. The temperature in the
unventilated barn rose quickly. 659 of the 1900 hogs in that barn died. Jade
Farms estimated it suffered a loss of $109,066 from the death of the hogs.
Jade Farms filed a claim with its insurer, State Farm Fire and Casualty
Company. State Farm denied the claim based on an exclusion in the insurance
policy for loss to livestock caused by ―suffocation.‖ Jade Farms then sued State
Farm, alleging breach of contract and bad faith. Jade Farms claimed the hogs
did not suffocate, but rather died ―because inadequate ventilation into the
building occurred due to an insured occurrence.‖
State Farm moved for summary judgment. The district court granted State
Farm‘s motion for summary judgment. It analyzed the language of the contract
to determine whether there was coverage. The court noted that ―a legal cause of
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the death of the animals‖ was ―an accumulation of ice.‖ (Emphasis added.) It
concluded ―[t]he loss is thus covered under the insuring clause, unless excluded.‖
The court then framed the issue as, ―whether the death of the animals was
‗caused‘ by suffocation within the meaning of the exclusion in the policy.‖ The
court found ―there is no material dispute on the critical issue: These hogs‘ deaths
were directly and immediately caused by suffocation. The loss is thus excluded
by the plain language of the policy.‖1
(Emphasis added.)
In support of its
conclusion that there was no material dispute on whether the hogs suffocated,
the court pointed to evidence from a recorded statement by Jay Clasing, in which
he answered ―Yes‖ to the question, ―So there‘s really no question as to the hogs
suffocated.‖ The court also considered language from paragraph twenty of the
plaintiffs‘ petition alleging an ―insured occurrence‖ caused the conditions that led
to the hogs‘ ―suffocation as that term is used in the insurance policy.‖ The court
granted summary judgment in favor of State Farm. The plaintiffs appeal.
III. Proximate Cause.
Appellants contend the court misapplied proximate cause analysis when it
found ―a legal cause‖ of the loss was the ice storm, but then excluded coverage
based on the loss being ―directly and immediately‖ cause by an excluded peril–
1
The court looked to a statement in paragraph 20 of the petition:
The occurrence caused the deaths because it caused inadequate
ventilation, which reduced the amount of oxygen in the building and killed
or injured the swine, though they suffered on obstructions to their airways
that led to their suffocation as that term is used in the insurance policy.
The beginning of the same paragraph of the petition, however, clearly stated ―plaintiffs‘
livestock did not ‗suffocate.‘‖ The paragraph is ambiguous and does not clearly concede
that the insured suffered a loss to livestock caused by suffocation.
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suffocation. ―The doctrine of proximate cause is applied differently in insurance
cases than in tort cases.‖ Bettis v. Wayne County Mut. Ins. Ass’n, 447 N.W.2d
569, 571 (Iowa Ct. App. 1989).
In insurance law it is generally understood that where the
peril insured against sets other causes in motion which, in an
unbroken sequence and connection between the act and final loss,
produces the result for which recovery is sought, the insured peril is
regarded as the proximate cause of the entire loss.
Qualls v. Farm Bureau Mut. Ins. Co., 184 N.W.2d 710, 713 (Iowa 1971). When
the cause sought is the direct and proximate cause, it is not necessarily the
cause or agency that is nearest in time or place to the result, since the dominant
cause may be concurrent or remote in point of time or place. Bettis, 447 N.W.2d
at 571. Thus we look not necessarily to the last act in a chain of events, but
rather to the predominant cause that set in motion the chain of events that
caused the loss. Id. However, ―[i]n an insurance policy, direct cause means
immediate cause or proximate cause, as distinguished from remote cause.‖ Id.
―‗Direct‘ as used in an insurance policy relates to causal connection and is to be
interpreted as the immediate or proximate cause as distinguished from the
remote cause.‖ Id. (quoting John Drennon & Sons Co. v. New Hampshire Ins.
Co., 637 S.W.2d 339, 341 (Mo. Ct. App. 1982)).
Appellants argue the ―cause‖ of their loss was an ―insured occurrence,‖
the loss of power and failure of the ceramic curtains to drop because of the
accumulation of ice from the ice storm. They argue this ―cause‖ set in motion the
chain of events that resulted in the death of the hogs. They contend suffocation
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was not an independent, intervening act.2 Appellants argue the district court‘s
reasoning starts the causation analysis midstream, in the middle of the unbroken
chain of events caused by an insured occurrence.
The district court found the ice storm was a legal cause of the loss, but the
death of the hogs was ―directly and immediately caused‖ by suffocation.3 It then
concluded the policy exclusion for ―suffocation‖ applied, so there was no
coverage. The question of proximate cause is ordinarily for the jury—only in
exceptional cases should it be decided as a matter of law. See Clinkscales v.
Nelson Securities, Inc., 697 N.W.2d 836, 841 (Iowa 2005).
We agree with the district court‘s conclusion the loss of the hogs is
covered under the insuring clause of the contract unless excluded. The question
remains whether the court properly determined there was no genuine issue of
material fact as to the applicability of the exclusion for suffocation.
IV. Genuine Issue of Material Fact.
The district court found there was no genuine issue of material fact
concerning whether the hogs suffocated, as the term is used in the insurance
2
Appellee contends the ―independent intervening act‖ claim is not preserved for our
review because it was not raised in the district court and not ruled on by the court.
3
The policy provides, in relevant part:
1.
We do not insure for any loss to the property described in
Coverages D, E, or F which consists of, or is directly and immediately
caused by, one or more of the perils listed in items a. through u. below,
regardless of whether the loss occurs suddenly or gradually, involves
isolated or widespread damage, arises from natural or external forces, or
occurs as a result of any combination of these:
....
t. loss to livestock or poultry does not include loss caused by:
(1)
suffocation;
(Emphasis added.)
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policy. Appellants contend the court erred in finding no genuine issue of material
fact because the record evidence could support finding the hogs died of
hyperthermia.
An employee of the hog operation, Ben Stephenson, stated that when
they went into the barn after the ice storm, the hogs that were still alive ―were just
real hot. Heat exhaustion, just laying around.‖ Stephenson stated it was very
cold outside, but anywhere from 98 to 105 degrees inside.
Dr. Scott Stehlik, a veterinarian, gave this opinion in an affidavit:
The medical cause of death was most probably
hyperthermia, or overheating, due to the rapid and severe build-up
of environmental heat and humidity because of the lack of
adequate air exchanges and due to the physiologic inability of
swine to sweat. Some of the animals may well also have expired
from asphyxiation due to the accumulation of carbon dioxide
coupled with the lack of oxygen. Given the research material
provided by Dr. Brumm, it would appear that hyperthermia is the
more likely medical cause of death. It is highly unlikely and
improbable that these animals would have ―piled up‖ or otherwise
reacted to create a situation for a death by suffocation.
Given this evidence in the record, we conclude the court erred in
determining there was not a genuine issue of material fact.4 Although there is
evidence from which a fact finder could find, as the court did, that the hogs died
of suffocation, there also is evidence from which the fact finder could find the
some or all of the hogs died of hyperthermia or some cause other than
suffocation.
4
The record also contains an affidavit by Dr. Michael C. Brumm, president of Brumm
Swine Consultancy. We did not consider this affidavit in evaluating whether there was a
genuine issue of material fact because Dr. Brumm could not give an opinion as to the
medical cause of the hogs‘ death.
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V. Entitlement to Judgment as a Matter of Law.
Appellants contend the court erred in concluding State Farm met its
burden of proof and was entitled to judgment as a matter of law. They basically
restate their arguments the court misapplied proximate cause analysis and it
incorrectly found there was no genuine issue whether the hogs suffocated. They
argue the determination of proximate cause is an issue for the jury.
See
Clinkscales, 697 N.W.2d at 841. They further argue the fact issue whether the
hogs died of hyperthermia or suffocation precludes summary judgment.
As the issue of whether the death of the hogs was caused by an excluded
cause is critical to determining whether there is coverage for the loss, and we
have determined the court erred in concluding there was no genuine dispute that
the hogs died of suffocation, we must also conclude State Farm was not entitled
to judgment as a matter of law.
Summary judgment was inappropriate in this case. We reverse the grant
of summary judgment and remand for further proceedings.
REVERSED AND REMANDED.
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