Hidden water damage coverage6/27/2023 ![]() ![]() In response, the Paslays contended that the removal of the drywall and remodel of the bathroom were required due to hidden water damage. The water also damaged other parts of the Paslays’ home. In response to the Paslays’ tender of the water damage claim under their homeowners’ policy, State Farm made payments exceeding $248,000, including $122,770.98 for repairs to the Paslays’ home. However, State Farm denied coverage of alleged water damage related to the master bathroom and for the removal of drywall throughout the home, purportedly in connection with remediating asbestos. State Farm took the position that the asbestos could have been remediated by scraping the material containing asbestos from the drywall. ![]() The parties’ dispute arose out of a water damage claim related to a Decemrainstorm, wherein a roof drain on the Paslays’ home failed, causing water to enter their home’s master bedroom through the ceiling. State Farm General Insurance Company, 248 Cal.App.4th 639 (2016), the California Second District Court of Appeal reversed the trial court’s entry of summary judgment in favor of State Farm with respect to plaintiffs’, Clayton and Traute Paslay (“the Paslays”), claims of breach of contract, bad faith and elder abuse arising out of State Farm’s adjustment of a water damage claim tendered by the Paslays under the first party property damage coverage afforded by a State Farm homeowner's policy. The Court of Appeal affirmed the trial court’s entry of judgment in favor of State Farm in connection with plaintiffs’ claims of bad faith and elder abuse based on the genuine dispute doctrine. However, the Court of Appeal found that there was a triable issue of fact with respect to plaintiffs’ claim of breach of insurance contract.
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