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United States District Court, W.D. Tennessee, Western Division.

James Edward RICHARDS and Karen Lynn Richards, Plaintiffs, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

No. 2:20-cv-02503-TLP-atc

Decided: February 11, 2022

Alexandria Fisher, Morgan & Morgan, Nashville, TN, Phillip N. Sanov, Morgan & Morgan PA, Houston, TX, for Plaintiffs. Raleigh Kent Francis, Christopher L. Vescovo, Lewis Thomason, Memphis, TN, for Defendant.


At its core, this case revolves around the meaning of two phrases in an insurance policy. Plaintiffs James and Karen Richards bought an insurance policy (“the Policy”) from Defendant State Farm Fire and Casualty Company. (ECF No. 1-1.) Plaintiffs’ home suffered significant water damage, so they filed an insurance claim with Defendant. (Id.) Defendant denied the claim, asserting that ‘surface water’ and a ‘flood’—which, the Policy excluded from coverage—caused the water damage. (Id. at PageID 7.) So Plaintiffs sued Defendant in state court for “breach of contract” and “bad faith refusal to pay.” (ECF No. 1-1 at PageID 7–8.) Defendant removed the case to this Court. (ECF No. 1.) It then moved for summary judgment. (ECF No. 45.)

The parties have fully briefed the issues in Defendant's summary judgment motion (see ECF Nos. 50 & 53), and the Court now addresses the merits of the claim. For the reasons below, the Court GRANTS Defendant's motion for summary judgment.


I. Undisputed Facts

Defendant submitted its statement of undisputed material facts (ECF No. 46), to which Plaintiffs responded (ECF No. 51). And Plaintiffs submitted their statement of additional material facts (ECF No. 52), to which Defendant responded (ECF No. 54). The Court recounts the undisputed material facts from these filings below.

On an early Spring morning in 2019, heavy rainfall, reportedly up to eleven inches, hit parts of Shelby County, Tennessee. (ECF No. 51 at PageID 224.)1 Much of water entered the first floor and garage of Plaintiffs’ home, located at 8774 Montavesta Dr., Germantown, Tennessee. (ECF No. 51 at PageID 224.) The water came into Plaintiffs’ home from many openings, including “under and through the front doors and patio door and from the bathtub drain.” (Id. at PageID 228.) The water eventually receded, and “it took approximately 30 to 45 minutes for the water to leave the house.” (Id.) Plaintiff Karen Richards photographed “the water inside the home at the point the water started to recede.” (Id.)

When this rainstorm hit, Defendant insured Plaintiffs’ home with “Policy No. 42-GM-5502-5.” (Id.) The Policy, likewise, “was in full force and effect” throughout all times important to the suit. (Id.) And so Plaintiffs filed a claim for their losses with Defendant. (Id. at PageID 229.) Defendant denied the claim, noting “that the loss had resulted from surface and/or flood water and was therefore not a covered loss under the Policy.” (Id.) But the terms “flood” and “surface water” are not defined in either the Policy or Defendant's “operations guide.”2 (ECF No. 54 at PageID 278–79.) The parties disagree about the meaning of these terms.

II. Procedural History

Plaintiffs sued in state court, alleging breach of contract and bad-faith refusal to pay under Tenn. Code Ann. § 56-7-105, when Defendant declined their water damage insurance claim. (See ECF No. 1-1 at PageID 6–9.) Defendant removed the suit to this Court under diversity jurisdiction (ECF No. 1),3 and answered the complaint (ECF No. 8). Later, Defendant deposed Plaintiffs (ECF Nos. 35 & 36) and moved for summary judgment (ECF No. 45). Plaintiffs responded to the summary judgment motion (ECF No. 50), and Defendant replied (ECF No. 53).


A party is entitled to summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “A fact is ‘material’ for purposes of summary judgment if proof of that fact would establish or refute an essential element of the cause of action or defense.” Bruederle v. Louisville Metro Gov't, 687 F.3d 771, 776 (6th Cir. 2012) (citing Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir. 1984)).

“In considering a motion for summary judgment, [the] court construes all reasonable inferences in favor of the nonmoving party.” Robertson v. Lucas, 753 F.3d 606, 614 (6th Cir. 2014) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). And “[t]he moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact.” Mosholder v. Barnhardt, 679 F.3d 443, 448 (6th Cir. 2012) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

“Once the moving party satisfies its initial burden, the burden shifts to the nonmoving party to set forth specific facts showing a triable issue of material fact.” Id. at 448–49; Matsushita, 475 U.S. at 587, 106 S.Ct. 1348. This means that, if “the non-moving party fails to make a sufficient showing of an essential element of his case on which he bears the burden of proof, the moving parties are entitled to judgment as a matter of law and summary judgment is proper.” Martinez v. Cracker Barrel Old Country Store, Inc., 703 F.3d 911, 914 (6th Cir. 2013) (quoting Chapman v. United Auto Workers Loc. 1005, 670 F.3d 677, 680 (6th Cir. 2012) (en banc)); see also Kalich v. AT&T Mobility, LLC, 679 F.3d 464, 469 (6th Cir. 2012).

What is more, “to show that a fact is, or is not, genuinely disputed, both parties are required to either cite to particular parts of materials in the record or show that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Bruederle, 687 F.3d at 776 (internal quotations and citations omitted); see also Mosholder, 679 F.3d at 448 (“To support its motion, the moving party may show ‘that there is an absence of evidence to support the nonmoving party's case.’ ” (quoting Celotex, 477 U.S. at 325, 106 S.Ct. 2548)). That said, “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge[.]” Martinez, 703 F.3d at 914 (alteration in original) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). And so, “[t]he court need consider only the cited materials, but it may consider other materials in the record.” Fed. R. Civ. P. 56(c)(3).

In the end, the “question is whether ‘the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ ” Johnson v. Memphis Light Gas & Water Div., 777 F.3d 838, 843 (6th Cir. 2015) (quoting Liberty Lobby, 477 U.S. at 251–52, 106 S.Ct. 2505). “[A] mere ‘scintilla’ of evidence in support of the non-moving party's position is insufficient to defeat summary judgment; rather, the non-moving party must present evidence upon which a reasonable jury could find in her favor.” Tingle v. Arbors at Hilliard, 692 F.3d 523, 529 (6th Cir. 2012) (quoting Liberty Lobby, 477 U.S. at 251, 106 S.Ct. 2505). And statements in affidavits that are “nothing more than rumors, conclusory allegations and subjective beliefs” are insufficient evidence. Mitchell v. Toledo Hosp., 964 F.2d 577, 584–85 (6th Cir. 1992). The Court now analyzes the parties’ claims under this standard.


Defendant contends that it is entitled to summary judgment on Plaintiffs’ breach of contract claim because Plaintiffs’ Policy “expressly provides that a loss caused by flood or surface water is not insured.” (ECF No. 45-1 at PageID 137.) As a result, Defendant claims that it “appropriately denied [Plaintiffs’] claim.” (Id. at PageID 141.) And because it properly denied the insurance claim, Defendant suggests that it is also entitled to summary judgment on Plaintiffs’ bad-faith denial argument. (Id. at PageID 146.) Interestingly, Plaintiffs agree that, if a ‘flood’ or ‘surface water’ caused the damage to their property and if their Policy does not cover this type of damage, their claims “should be dismissed[.]” (ECF No. 50-1 at PageID 210.)

Even so, Plaintiffs argue that Defendant's summary judgment motion should be denied because: (1) the water damage to their house was not cause by ‘flood’ or ‘surface water’ as those terms are commonly understood, (2) those terms are ambiguous and the Court must construe them “in favor of the insured,” and (3) they proffered a prima facie case of bad-faith denial under § 56-7-105(a). (ECF No. 50-1 at PageID 214–21.)

This dispute largely hinges on whether Plaintiffs’ Policy covers damage caused by ‘flood’ and ‘surface water.’ The relevant sections of that Policy read:


2. We do not insure under any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events. We do not insure for such loss regardless of: (a) the cause of the excluded event; or (b) other causes of the loss; or (c) whether other causes acted concurrently or in any sequence with the excluded event to produce the loss; or (d) whether the event 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:

Item 2.c Water is replaced by:

2. c. Water, meaning:

(1) Flood, surface water, waves (including tidal wave, tsunami, and seiche) tides, tidal water, overflow of any body of water, or spar or surge from any of these, all whether driven by wind or not; except as specifically provided in Section I – ADDITIONAL COVERAGES, Back-up of Sewer or Drain; ․

(ECF No. 1-1 at PageID 38, 19–20; see also ECF No. 1-1 at PageID 55.)

As explained below, the Court finds that Plaintiffs’ arguments lack merit and GRANTS Defendant's motion. The Court also notes that this case and the motion for summary judgment are much like one before Judge Samuel Mays in this district. See Johnson v. State Farm Fire and Casualty Co., No. 220CV02504SHMATC, 572 F.Supp.3d 454 (W.D. Tenn. Nov. 16, 2021).4 Both cases stem from the same underlying rainstorm, involve the same disputed language with the same lawyers for the parties. This Court agrees with Judge Mays’ legal analysis and largely adopts his reasoning.

I. The Policy and ‘Surface Water’

Judge Mays began his Order by addressing how courts should interpret insurance policy agreements and the effect of ambiguous phrases. See id. at 457. He noted that “[i]n Tennessee, courts construe insurance policies ‘using the same tenets that guide the construction of any other contract.’ ” Id. (quoting Garrison v. Bickford, 377 S.W.3d 659, 664 (Tenn. 2012)). And while a court's “primary goal is to ascertain and give effect to the parties’ intent,” courts also “endeavor to give policy terms their plain and ordinary meaning.” Id. at 457. That is to say, courts attempt to provide a “meaning which the average policy holder and insurer would attach to the policy language.” Id. (quoting S. Trust Ins. Co. v. Phillips, 474 S.W.3d 660, 667 (Tenn. Ct. App. 2015)).

Yet when a term is not defined in the policy, “courts in Tennessee sometimes refer to dictionary definitions,” like Black's Law Dictionary, Id. (quoting Am. Just. Ins. Reciprocal v. Hutchison, 15 S.W.3d 811, 815 (Tenn. 2000)), or the “decisions from other state high courts and federal circuit courts” to find out a word's ordinary meaning. Id. (citing Lammert v. Auto-Owners (Mut.) Ins. Co., 572 S.W.3d 170, 175–78 (Tenn. 2019). But when the ordinary meaning of a term is ambiguous, or when a material provision of the policy “is susceptible to more than one plausible meaning, the meaning favorable to the insured controls.” Id. (quoting Garrison, 377 S.W.3d at 664)).

With that framing in mind, Judge Mays evaluated the ordinary meaning of the term ‘surface water.’ See id. at 457–58. He found that:

The Tennessee Supreme Court has not defined “surface water” in the insurance context. Black's Law Dictionary defines the term as “water lying on the surface of the earth but not forming part of a watercourse or lake. Surface water most commonly derives from rain, springs, or melting snow.” SURFACE WATER, Black's Law Dictionary (11th ed. 2019). State high courts have adopted equivalent definitions. Boazova v. Safety Ins. Co., 462 Mass. 346, 968 N.E.2d 385, 392 (Mass. 2012); Thorell v. Union Ins. Co., 242 Neb. 57, 492 N.W.2d 879, 883 (Neb. 1992); Heller v. Fire Ins. Exch., a Div. of Farmers Ins. Grp., 800 P.2d 1006, 1008–09 (Colo. 1990); State Farm Fire & Cas. Co. v. Paulson, 756 P.2d 764, 768 (Wyo. 1988); Fenmode, Inc. v. Aetna Cas. & Sur. Co. of Hartford, Conn., 303 Mich. 188, 6 N.W.2d 479, 481 (Mich. 1942). Federal circuit courts have adopted equivalent definitions. Lucky Leather, Inc. v. Mitsui Sumitomo Ins. Grp., 650 F. App'x 364, 364 (9th Cir. 2016); Fid. Co-op. Bank v. Nova Cas. Co., 726 F.3d 31, 40 (1st Cir. 2013); Flamingo S. Beach I Condo. Ass'n, Inc. v. Selective Ins. Co. of Se., 492 F. App'x 16, 20 (11th Cir. 2012); T.H.E. Ins. Co. v. Charles Boyer Childrens Tr., 269 F. App'x 220, 222 (3d Cir. 2008); Front Row Theatre, Inc. v. Am. Mfr's. Mut. Ins. Companies, 18 F.3d 1343, 1347 (6th Cir. 1994).

Id. at 458.

Contrary to these authorities, Plaintiffs here and in Judge Mays’ case, assert their own definition of ‘surface water,’ taken from the New Jersey Administrative Code, to mean “water which possess[es] a permanent nature, akin to a body of water.”5 (ECF No. 50-1 at PageID 217; Johnson, 572 F.Supp.3d at 458.) Plaintiffs claim that their definition of ‘surface water’ is plausible; and that, considering Defendant's competing definition, the phrase is ambiguous. (ECF No. 50-1 at PageID 217–19; Johnson, 572 F.Supp.3d at 458.) As a result, Plaintiffs continue, the Court should adopt their definition of ‘surface water’ and construe the ambiguous term against the insurer. (ECF No. 50-1 at PageID 217; Johnson, 572 F.Supp.3d at 458.) Plaintiffs then add that, under their definition, Defendant cannot rely on the Policy's ‘surface water’ damage exclusion as justification for denying their insurance claim. (ECF No. 50-1 at PageID 217; Johnson, 572 F.Supp.3d at 458.)

To support their ambiguity argument, and their definition of ‘surface water,’ Plaintiffs cite a New Jersey State Court of Appeals decision. See Sosa v. Massachusetts Bay Ins. Co., 458 N.J.Super. 639, 206 A.3d 1011, 1018 (N.J. App. Div. 2019). In that case, as here, the New Jersey court grappled with an insurance policy dispute over the phrase ‘surface water.’ See id. at 1018–19. The parties in that case also gave competing definitions of the phrase, with the plaintiff claiming that the phrase was ambiguous and the defendant insurer arguing the contrary. Id. at 1018. The New Jersey court evaluated the opposing definitions of the phrase, determined that both definitions were plausible, and found that the competing terms rendered the phrase ambiguous. Id. at 1018–19. The court then adopted the plaintiff's definition of ‘surface water,’ construing the term against the insurer. Id. at 1019.

But after considering that case, this Court agrees with Judge Mays who found that the Sosa decision and its reasoning do not render the phrase ‘surface water’ ambiguous here. First, the Sosa court relied on a “technical” rather than ordinary meaning of the phrase when it adopted the plaintiff's suggested definition from the New Jersey Administrative Code. See Johnson, 572 F.Supp.3d at 458. In fact, the New Jersey Code's definition of the phrase is relevant only “to the actions and decisions by the Department [of Environmental Protection], ․ on uses and development of coastal resources within or affecting the coastal zone” of New Jersey. See N.J.A.C. 7:7–1.2; 7:7–16.4. It is in no way reflective of the phrase's ordinary meaning as used in insurance policies. And in Tennessee, unless the Policy contains the technical definition of the disputed term, that “term's ordinary, popular meaning prevails” over the technical interpretation. Johnson, 572 F.Supp.3d at 458 (citing Lammert, 572 S.W.3d at 179).

With that in mind, because the Policy neither contains a technical definition of the phrase ‘surface water,’ nor suggests that the phrase has a technical meaning, the ordinary meaning of the phrase prevails. As a result, this Court rejects the reasoning of the Sosa court and finds that the phrase “ ‘[s]urface water’ is not ambiguous” here. Id. Instead, the Court adopts the ordinary meaning of the phrase, “water lying on the surface of the earth but not forming part of a watercourse or lake” that “most commonly derives from rain, springs, or melting snow.” Id. at 458 (quoting SURFACE WATER, Black's Law Dictionary (11th ed. 2019)).6

Now, the Court addresses whether ‘surface water,’ in its ordinary meaning, caused the water damage here. And, like Judge Mays, the Court finds that it did. On the day of the water damage, a massive rainstorm came through Plaintiffs’ community. (ECF No. 46 at PageID 153–55.) And that storm dropped about eleven inches of rainfall in a very short time. (Id. at PageID 156.) Water from the storm then flowed into Plaintiffs’ house through their front door, patio door, and bathtub drain. (ECF No. 51 at PageID 228.) When Plaintiff Karen Richards realized the amount of the flooding inside her house, she also noticed that much water had pooled outside. (ECF No. 46 at PageID 154.) Some of Plaintiffs’ neighbors also reported water damage and flooding inside their homes. (Id. at PageID 155, 158–59.)

These events show that surface water, resulting from the rainstorm, seeped into Plaintiffs’ home and caused the disputed water damage.7 And, as a result, the Policy does not cover Plaintiffs’ damages.8

II. Bad-Faith Refusal

Plaintiffs also contend that they made a prima facie case of bad-faith insurance denial under Tenn. Code Ann. § 56-7-105(a) and a jury should resolve the question whether Defendant showed bad faith. (ECF No. 50-1 at PageID 220–21.) The Court, however, disagrees.

To succeed on a bad-faith claim, Plaintiffs must show that:

(1) the policy of insurance must, by its terms, have become due and payable, (2) a formal demand for payment must have been made, (3) the insured must have waited 60 days after making his demand before filing suit (unless there was a refusal to pay prior to the expiration of the 60 days), and (4) the refusal to pay must not have been in good faith.

Burge v. Farmers Mut. of Tennessee, No. M201601604COAR3CV, 2017 WL 1372864, at *9 (Tenn. Ct. App. Apr. 13, 2017) (quoting Palmer v. Nationwide Mut. Fire Ins. Co., 723 S.W.2d 124, 126 (Tenn. Ct. App. 1986)). Yet “[a]n insurance company is entitled to ․ refuse payment if there [are] substantial legal grounds that the policy does not afford coverage for the alleged loss.” Nelms v. Tennessee Farmers Mut. Ins. Co., 613 S.W.2d 481, 484 (Tenn. Ct. App. 1978). Here, because Plaintiffs’ Policy did not cover the water damage, Defendant rightfully denied Plaintiffs’ claim. The Court finds, therefore, that Defendant did not act in bad faith and that this question is not one for a jury.


For the reasons outlined above, the Court finds that there is no genuine dispute of material fact and GRANTS Defendant's motion for summary judgment.

SO ORDERED, this 11th day of February, 2022.


1.   Plaintiffs object to this fact because it points to the rainfall as the cause of the damage to their house. (See ECF No. 51 at PageID 225.)

2.   The ‘operations guide’ is a document that Defendant provides to its “claims specialist[s]” so that the specialists have “guidance or [a] starting point[ ]” to assess an insurance claim. (ECF No. 54 at PageID 279.)

3.   Defendant is an Illinois corporation with its principal place of business in Bloomington, Illinois (ECF No. 1 at PageID 1) and Plaintiffs are domiciled in Shelby County, Tennessee. (Id.) The amount in controversy for this dispute is likely to exceed $75,000. (Id. at PageID 2–3.)

4.   The complaint, Defendant's motion for summary judgment, and the response to the summary judgment motion are virtually identical in each case. Both cases focus on the phrases ‘flood’ and ‘surface water’ and whether the Policy covers those damages. Other than the identity of the Plaintiffs and some facts about their damage, the only significant difference between the two cases is that Defendant included another section in its summary judgment motion here. (See ECF No. 45-1 at PageID 144–46.) In that section, Defendant expected that Plaintiffs would argue that their Policy's ‘Back-up of Sewer or Drain endorsement,’ which covered up to $10,000 in damages, should have applied to their claim. (Id. at PageID 145.) In doing so, Defendant argued that the “anti-concurrent causation language in the Policy” prevented Plaintiffs from recovering under the endorsement because ‘surface water’ contributed, in part, to Plaintiffs’ loss. (Id.) That said, Plaintiffs do not proffer any argument about the ‘Back-up of Sewer or Drain endorsement,’ so this distinction is a non-issue.

5.   Plaintiffs assert this definition because of the New Jersey Appellate case, Sosa v. Massachusetts Bay Ins. Co., 458 N.J.Super. 639, 206 A.3d 1011, 1018 (N.J. App. Div. 2019). This case is discussed in depth below.

6.   Besides advocating for a technical meaning that applies only to some governmental departments in New Jersey, Plaintiffs’ suggested definition of ‘surface water’ is also unreasonable in context of the Policy. Johnson, 572 F.Supp.3d at 459. As Judge Mays explains:The purpose and structure of the Water Exclusion Provision foreclose [Plaintiff's] favored definition. It is unlikely that a permanent body of water, unaffected by superseding events, could cause losses that the parties would wish to exclude from coverage. Losses result when superseding events force a permanent body of water beyond its customary boundaries. The Court understands [Plaintiff] to argue implicitly for a definition that equates “surface water” with “a permanent body of water affected by superseding events.” The Water Exclusion Provision already excludes losses caused by superseding events that might affect a permanent body of water (e.g., tides, tidal water, tsunamis, overflow, spray, surge). If [Plaintiff's] definition were adopted, the exclusion of “surface water” would be surplusage. The term “surface water” does not mean a “permanent body of water.” It does not mean “a permanent body of water affected by superseding events.” See Graybar Elec. Co. v. Davco Corp., 1985 WL 3429, at *2 (Tenn. Ct. App. Nov. 1, 1985)(“All words used in a contract are presumed to have meaning.”). There is no ambiguity.

7.   Plaintiffs claim that the cause of the water damage was, coupled with the accumulated rain, an obstructed storm drain behind their house. (ECF No. 46 at PageID 156; ECF No. 51 at PageID 227.) But Plaintiffs’ Policy does not cover any excluded damages, like accumulated ‘surface water,’ “regardless of: (a) the cause of the excluded event[.]” (ECF No. 1-1 at PageID 38.)So even if the alleged damage resulted from a clogged storm drain, the Policy would not cover it. See Johnson, 572 F.Supp.3d at 458.

8.   Because the Court found that ‘surface water’ caused the damage to Plaintiffs’ house, and because the policy contains an anti-concurrent clause, the Court need not address whether a flood also caused the damage. But the Court notes that insurance policies often use the term ‘flood’ in tandem with the phrase ‘surface water’ and its accumulation. See Front Row Theatre, Inc., 18 F.3d 1343 at 1348–49. And Tennessee Courts have discussed the term ‘flood’ without directly defining it; and, in doing so, imply that the term is not ambiguous. See Wimpee v. Grange Mut. Cas. Co., No. W2002-02795-COA-R3-CV, 2003 WL 24213899, at *3 (Tenn. Ct. App. Dec. 31, 2003) (“Indeed, floods would seem to occur only on those occasions where the amount of water introduced into an area exceeds the capability of its drainage system to contain the water.”). But, even if the term ‘flood’ were ambiguous, Plaintiffs’ Policy here excludes damages because of the ‘surface water’ damage and the anti-concurrent clause.


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