1N TH H SUPREME COURT OF F1.OR I DA. CASENO. SCl R ESPONSE TO JURISDICT IONA I, BRIEF OF PETITIONER

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1 l lectronically Filed UK/14/2013 0]:57:29 PM lit RECE[\"ED. K/14/20l3 1.MK 45. Ilïomas [). Ilall. ClerL Suprcme Court SullTI JERN OAK 1NSURANCE COMPANY 1N TH H SUPREME COURT OF F1.OR I DA Petitioner CASENO. SCl Lower Tribunal Nos. 3D12-875, ARMANDO RODRIGUE7,and F.I J7,Al]liTl1 RODRIGUEZ Respondents. R ESPONSE TO JURISDICT IONA I, BRIEF OF PETITIONER On Discretionary Review from the Third District Court of Appeal, Florida KENNI?TI1 R. DUl3OFF, ESQ. Florida Bar No DUBOFF I AW FI RM 680 NE 127 Street North MbimE, Florida 33 16l Teleplione: (305) Facsimile: (305) KdLJI2pffffEDuboÛLawbirm,cpn} Courtdocuntent@Dubofilawllinn.com Counsel for Respondent

2 TABLEOFCONTENTS TABLE OF CONTENTS... TABLE OF AUTHORITIES... i ii STATEMENT OF THE CASE AND FACTS... 1 SUMMARY OF THE ARGUMENT... 3 ARGUMENT... 5 THERE IS NO BASIS FOR DISCRETIONARY REVIEW OF THE THIRD DISTRICT'S DECISION IN THIS CASE; NO EXPRESS OR DIRECT CONFLICT EXISTS BETWEEN THE DECISION BELOW AND ANY DECISION OF THIS COURT OR ANY OTHER DISTRICT COURT OF APPEAL CONCLUSION CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE

3 TABLE OF AUTHORITIES CASES Auto-Owners Ins. Co. v. Anderson 756 So.2d 29, 33 (Fla.2000)... 5 Bethel v. Securitv Nat'l. Ins. Co. 949 So.2d 219 (Fla. 3d DCA 2006)... 6 Cheetham v. Southern Oak Ins. Co. 114 So. 3d 257 (Fla 3d DCA Demshar v. AAA Con Auto Transport, Inc., 337 So.2d 963 (Fla.1976)... 6 Deni Assocs. offlorida, Inc. v. State Farm Fire & Cas. Ins. Co 711 So.2d 1135, 1138 (Fla.1998) Favad v. Clarendon Nat'l Ins. Co. 899 So.2d 1082 (Fla 2005)... 2 Haines v. United Securitv Ins. Co.. 43 Colo.App. 276, 602 P. 2d 901 (Colo. App.1979) Hallsted v. Blue Mountain Convalescent Ctr. Inc. 23 Wash.App. 349, 595 P.2d 574 (1979)... 4 Hartford Accident and Indemnity Co. v. Phelos 294 So. 2d 362 (Fla 1DCA 1974)... 1 Jackson v. American Mut. Fire Ins. Co. 299 F. Supp. 151 (M.D. N.C. 1968)19, affirmed, 410 F. 2d 395 (4th Cir. 69)

4 Old Dominion Ins. Co. v. Elysee, Inc. 601 So. 2d 1243 (Fla 1st DCA 1992)... 1 Pichel v. Drvden Mut. Inc. Co. 965 N.Y.S.2d 342 (N.Y. Sup. Ct. 2013)... 8 Reaves v. State 485 So. 2d 829, 830 (Fla. 1986) Southern Oak Ins. Co. v. Rodriguez 114 So. 3d 412 (Fla 3rd DCA 2013)... 1 State Farm Fire & Cas. Co. v. CTC Dev. Corp., 720 So.2d 1072 (Fla 1998)... 6 Swire Pac. Holdines, Inc. v. Zurich Ins. Co. 845 So.2d (Fla 2003)... 6 World Fire & Marine Ins. Co. v. Carolina Mills Distributine Co., 169 F.2d 826 (8' Cir. 1948)... 8 OTHER AUTHORITIES Ait. V, 3(b)(3), Fla. Const Fla. R. App. P (a)(2)(A)(iv)... 5 Fla. R. App. P (d)... 5 Webster's New World Dictionary, "sewer" and 'drain" Third College Edition (1988)

5 STATEMENT OF THE CASE AND FACTS The Third District's decision, entered without opinion, affirmed the trial court, citing Cheetham v. Southern OakIns. Co., 114 So. 3d 257 (Fla 3d DCA 2013 and Old Dominion Ins. Co. v. Elysee, Inc., 601 So. 2d 1243 (Fla 1st DCA 1992) as authority for its affirmance. See, Southern OakIns. Co. v. Rodriguez, 114 So. 3d 412 (Fla 3rd DCA 2013). Petitioner, having adopted in this action its jurisdictional brief in Cheetham, seeks to have this court declare the Third District's decision expressly and directly conflicts with the decisions of this Court. The facts ofthe instant case are simple. The policy in this action is based on the same allrisk coverage policy described in Cheetham, and the facts are basically the same as the facts in Cheetham, except the trial court in this action found coverage in favor ofthe Rodriguez' who had argued the precedents established in Old Dominion and HartfordAccident andindemnity Co. v. Phelps, 294 So. 2d 362 (Fla 1DCA 1974). The Rodriguez' as the policyholders did in Cheetham, filed a claim with their insurer, Southern Oak, after their home sustained water damage. After Southern Oak denied the claim, the Rodriguez' filed suit, claiming the loss was covered by their allrisk homeowners' insurance policy which provides in paragraph (ii)under "Exception -1-

6 to c.(6)," an "accidental discharge" of water from within a plumbing system caused by deterioration is a covered loss, "[u]nless the loss is otherwise excluded." In response, Southern Oak asserted that the "Water Damage" exclusion, specifically section A.3.b., was applicable, and, therefore, the Rodriguez' loss was not covered. As the court noted in Cheetham the issues were (1) whether the all-risk policy is ambiguous where it provides for coverage for the "accidental discharge" of water "within a... plumbing... system... on the 'residence premises' " caused by "deterioration," but excludes "water damage" caused by "[w]ater or water-borne material which backs up through sewers or drains," and (2) whether the exclusion applies when a pipe located within the plumbing system of the "residence premises" breaks due to deterioration, causing debris to enter the pipe and fonning a blockage, and as a result of the blockage, waste water and/or material backed up through the blocked pipe "within" the "plumbing system" and then into the "residence premises" through drains. Cheetham at 261 As noted by the Third District, in Cheetham, its interpretation of the policy provisions is consistent with the principles of policy construction prescribed in this Court's decision in Fayad v. Clarendon Nat'l Ins. Co., 899 So.2d 1082 (Fla 2005), and with the First District Couit of Appeal's interpretation of a virtually identical -2-

7 water damage exclusion in the policy construed in Old Dominion. See, Cheetham at 263. SUMMARY OF ARGUMENT The construction and applicability ofthe same policy exclusion before the Third District had already been decided by the First District in OldDominion over 20 years before and resulted in the Third District's Cheetham opinion. This Couit should decline to review the instant case because there is no express and direct conflict between this case and any decision made by this Court or any other District Court of Appeal. None of the purported "conflict" cases cited in Petitioner's Jurisdictional Brief assert a conflicting or contrary principle of law to that upon which Cheetham and OldDominion are based. The long standing seminal decision in Old Dominion is not only directly on point on the salient issues, it is the only Florida court decision, prior to Cheetham, that deals with the specific policy exclusion, and declares, in accord with the foreign jurisdiction courts, that the water exclusion for sewers and drains refers to water damage originating from off the insured premises and outside the insured plumbing system. In Old Dominion, the First District concluded that "[t]he common understanding of the words 'sewer' and 'drain' is that they describe devices which cany water and sewage awayfrom property and that a sewer or drain begins at the -3-

8 property line. In support of its decision, the Third District in Cheetham quotes Old Dominion in citing, Hallsted v. Blue Mountain Convalescent Ctr. Inc., 23 Wash.App. 349, 595 P.2d 574, 575 (1979) as follows:: Cheetham at 263. "When the ADDITIONAL EXCLUSIONS clause and Paragraph 15 are read together, it is apparent they are not contradictory. If the cause of the discharge is in the plaintiffs system, E. g., A clogged sink drain which causes water in the plumbing system to overflow, the EXCLUSIONS clause does not apply. If the cause of the discharge is outside that system, E. g., a clogged sewer pipe which forces water from outside plaintiffs system to overflow, then the cause is applicable even though the water flowed through plaintiffs plumbing system." ARGUMENT THERE IS NO BASIS FOR DISCRETIONARY REVIEW OF THE THIRD DISTRICT'S DECISION IN THIS CASE; NO EXPRESS OR DIRECT CONFLICT EXISTS BETWEEN THE DECISION BELOW AND AN Y DECISION OF THIS COURT OR ANY OTHER DISTRICT COURT OF APPEAL Petitioner seeks to invoke the discretionary jurisdiction of this Court pursuant to Article V, section 3(b)(3), ofthe Florida Constitution. This section grants this Court discretionary jurisdiction to review "any decision of a district court of appeal... that expressly and directly conflicts with a decision of another district court of appeal or -4-

9 of the supreme court on the same question of law." Id.; see also Fla. R. App. P (a)(2)(A)(iv). According to Florida Rule of Appellate Procedure 9.120(d), Petitioner's brief is limited solely to the issue of jurisdiction. It is undisputed that "[c]onflict between decisions must be express and direct, i.e., it must appear within the four corners of the majority decision." Reaves v. State, 485 So. 2d 829, 830 (Fla. 1986). Nothing within the four corners of the Third District's opinion in Cheetham expressly and directly conflicts with purported "conflict" cases cited in Petitioner's Jurisdictional Brief. Thus, the Court should decline jurisdiction over this case because there is "no express and direct conflict between these opinions within the four corners of Cheetham. The Third District correctly analyzed and applied the established law with regard to policy interpretation, including purported conflict "cases," and aptly quoted this Court's decision in Fayad, as follows: "We begin with the guiding principle that insurance contracts are construed the purported conflict cases the guiding principles that insurance contracts are construed in accordance with "the plain language of the polic[y] as bargained for by the parties. Auto-Owners Ins. Co. v. Anderson, 75 6 So.2d 29, 33 (Fla.2000). However, if the salient policy language is susceptible to two reasonable interpretations, one providing coverage and the other excluding coverage, the policy is considered ambiguous. See -5-

10 Cheetham at 261, 262 Anderson, 756 So.2d at 34; Swire Pac. Holdines. Inc. v. Zurich Ins. Co., 845 So.2d 161, 165 (Fla.2003). Ambiguous coverage provisions are construed strictly against the insurer that drafted the policy and liberally in favor ofthe insured. See Anderson, 756 So.2d at 34; State Farm Fire & Cas. Co. v. CTC Dev. Co/p., 720 So.2d 1072, 1076 (Fla.1998); Deni Assocs, of Florida, Inc. v. State Farm Fire & Cas. Ins. Co., 711 So.2d 1135, 1138 (Fla.1998). Further, ambiguous "exclusionary clauses are construed even more strictly against the insurer than coverage clauses." Anderson, 756 So.2d at 34; see also Demshar v. AAACon Auto Transport, Inc., 337 So.2d 963, 965 (Fla.1976) ("Exclusionary clauses in liability insurance policies are always strictly construed."). Thus, the insurer is held responsible for clearly setting forth what damages are excluded from coverage under the terms of the policy. Favad, 899 So.2d at The court further noted that based on those principles, "...we must examine the all-risk policy, as a whole, to determine if it is ambiguous. However, we note that an insurance policy is not ambiguous "simply because it is complex or requires analysis..." Cheetham at262 In order to determine the plain and ordinary meaning of the substantive words used in an insurance policy, courts simply look to the "definitions" contained in the policy. Bethel v Security Nat'l. Ins. Co., 949 So.2d 219 (Fla. 3d DCA 2006). Here, -6-

11 in that the terms "sewer" and "drain" were not defined in the policy, the Third District citing OldDominion stated, "[t]he common understanding of the words 'sewer' and 'drain' is that they describe devices which carry water and sewage away from property. It is also understood that a plumbing blockage which contains waste from another premises must be a backup from a 'sewer' or 'drain.' " Cheetham at 263. The Court thereupon inserted the following dictionary definition in a footnote: Cheetham at FN3 FN3. Citing to Webster's New World Dictionaty, Third College Edition (1988), the court noted that the definition of"sewer" is "a pipe or drain usually underground, used to carry off water and waste matter," and the definition of "drain" is a "channel or pipe for carrying off water, sewage, etc." Old Dominion. 601 So.2d at The Third District fuither noted that the Old Dominion court had reviewed several out-of-state cases, and found that "the general understanding in the case law is that a sewer or drain begins at the... property line." Cheetham at 263. The out of state cases cited in Old Dominion are Hallsted v. Blue Mountain Convalescent Center, Inc., 23 Wash. App. 349, 595 P. 2d 574 (Wash. App. 1979) Jackson v. American Mut. Fire Ins. Co.,299 F. Supp. 151 (M.D. N.C. 1968), affirmed, 410 F. 2d 395 (4th Cir. 1969) and Haines v. United Security Ins. Co., 43 Colo.App. -7-

12 276, 602 P. 2d 901 (Colo. App.1979). In Hallsted/ the court held that when the coverage provision for damages originating from the insured's plumbing system and the exclusion clause for backs up from sewers or drains are read together, it is apparent they are not contradictory. The court further clarified its opinion by stating "If the cause of the discharge is in the plaintiffs system, e. g., a clogged sink drain which causes water in the plumbing system to overflow, the exclusion does not apply. If the cause of the discharge is outside that system, e. g., a clogged sewer pipe which forces water from outside plaintiffs system to overflow, then the exclusion is applicable even though the water flowed through plaintiffs plumbing system." In rendering its decision, the Hallsted court considered the case of World Fire & Marine Ins. Co. v. Carolina Mills Distributing Co., 169 F.2d 826 (8' Cir. 1948), which is relevant to the instant case on appeal. In World Fire, the policy had a Hallsted was also cited in the recent decision in Pichel v. Dryden Mut. Inc. Co., 965 N.Y.S.2d 342 (N.Y. Sup. Ct. 2013), as follows: "In cases where the applicable policy contained both a sewer and drain exclusion and a clause extending covereage for discharge or overflow of water from a plumbing system, a plumbing system has been continuously defined as including all pipes and fixtures physically located on the insured premises, while sewers and drains have been defined as pipes located off the insured premises (see Hallsted...)" -8-

13 coverage provision for water damage caused by accidental discharge, leakage or overflow of water from the insured plumbing system, and also an exclusion for damage caused directly or indirectly by backing up of sewers or drains. The damages in that case resulted when the city's main sewer became overloaded as a result of an unusually heavy rain and the resulting pressure in the sewer caused water to flow back through a soil pipe into insured's building. The court held: "[T]he excepting clause [meaning the clause enumerating hazards not covered] in its entirety did not apply when... there was an accidental discharge of water from within the plumbing system" regardless of the fact that the discharge was caused by events that originated in the sewer line outside the insured's property. The World Fire court also made the following observation, equally applicable to Cheetham's reading that all of the other exceptions under clause (3) "Water Damage" exclude loss caused by forces outside the residential plumbing system, as follows: "... It is not unreasonable to assume that the loss or damage intended to be excepted by the words "backing up of sewers or drains" was, like the other losses excepted in this paragraph, such losses as would result from causes having no connection with the [insured's] plumbing system, or from discharge of water "outside" the plumbing system (as distinguished from "within" the -9-

14 plumbing system) such as the backing up of an open sewer in a basement." In Haines, citing Hallsted, the couit also found that the exclusion for sewers and drains applied only to problems originating outside the plumbing system. In Jackson, the couit likewise held that the sewers and drains exclusion is inapplicable to water damage originating within the insured's plumbing system: "No conflict is found between the two clauses. The insuring clause insures generally against loss caused by the accidental discharge or overflow of water from within the plumbing system...clause (b) (2), unfortunately for the plaintiff, excepts any loss resulting from "water which backs up through sewers or drains." This must refer to sewers or drains outside the plaintiffs plumbing system, that is, the sewers or drains in the sewer system ofthe Town of Robbins. This interpretation is reinforced by the fact that all of the other exceptions under clause (b) except loss caused by forces outside the plaintiffs plumbing system." In citing Phelps, the Cheetham court noted that the court had found coverage where a policy provision provided coverage for water damage emanating from the residential plumbing system where the water exclusion did not expressly exclude water which emanated from the plumbing system. Phelps at 363 (Fla. I st DCA 1974). -10-

15 The Phelps court considered, in pari materia, the affirmative statement of coverage for damage emanating from the residential plumbing system, with the terminology used in the exclusion clause where the residential plumbing system is not mentioned. The couit held it must conclude that the exclusion was intended to relate only to damage from water not emanating from the residential plumbing system. In essence, having specifically covered water damage from the residential plumbing system, the insurer, if it had intended to exclude water damage originating from within the plumbing system, was required to expressly, and without any reasonable doubt, mentioned the residential plumbing system within the exclusion, in accordance with the principles cited in Fayad. Thus, the Third District, in applying the well established principles of policy construction, the common and dictionary definitions of "sewers" and "drains," the precedent established in Old Dominion for the same exclusion, the holding of Phelps with regard to the plain reading of water exclusionary provisions, the persuasive opinions of out-of-state courts, coitectly found that the relevant policy provisions were not ambiguous, and that the exclusion related only to damage fi.om water emanating fi.om outside the insured plumbing system. -11-

16 CONCLUSION As is shown above, there is no express and direct conflict between this case and any decision made by this Court or any other District Court of Appeal. For the reasons stated herein, Respondent respectfully requests that the Court decline to exercise its discretionary jurisdiction, if any such jurisdiction does exist. CERTIFICATE OF COMPLIANCE I CERTIFY that this brief complies with the type-volume limitation set forth in Fla. R. App. P (a)(1). The font type used is Times New Roman, 14 point. DUBOFF LAW FIRM Attorneys for Respondent 680 NE 127 Street Noith Miami, Florida Telephone: (305) Facsimile: (305) Kduboff@DuboffLawFirm.com Courtdocument@DuboffLawFirm.com By: KENNETH R. DUBOFF, ESQ., Florida Bar No

17 CERTIFICATE OF SERVICE WE HEREBY CERTIFY that on this 14th day of August, 2013, a true and correct copy of the foregoing was ed to Elizabeth K. Russo, Esq., ekr@russolappeals.com; e-service@russoappeals.com; and Maria Medina, Esq., at mmedina@dbmlegal.com. DUBOFF LAW FIRM Attorneys for Respondent 680 NE 127 Street Noith Miami, Florida Telephone: (305) Facsimile: (305) Kduboff@DuboffLawFirm.com Courtdocument rm.com By: KENNETH R. DUBOFF, ESQ., Florida Bar No