Liristis v. American Family Mutual Insurance Company

Carla Liristis and other insureds (plaintiffs) owned and resided in a home covered by an insurance policy through American Family Mutual Insurance Company (American Family) (defendant). The policy contained an exclusion for mold. In August 1996, there was a fire in the plaintiffs’ home. The house suffered fire damage and water damage as a result. The plaintiffs filed a claim, and American Family paid the plaintiffs $31,370.99. When the plaintiffs moved back into their home, they noticed mold and suffered allergic reactions and unexplained illness. After the fire, the roof of the house leaked every time it rained. The plaintiffs hired a contractor to fix the leaks. The plaintiffs notified American Family of the continued leaks in 1996 when they filed a claim for water damage. The plaintiffs hired an expert to conduct an environmental assessment of the house. The expert found dangerous mold-producing bacteria present in the home. American Family also had an environmental assessment performed, the results of which also showed dangerous bacteria present in the home. The plaintiffs made a claim for the environmental damage to the home resulting from the water damage. American Family denied the claim based on the mold exclusion. The plaintiffs sued American Family, alleging breach of contract, bad faith, and unfair insurance trade practices. The plaintiffs and American Family each moved for summary judgment. The trial court granted summary judgment in favor of American Family. The plaintiffs appealed.