MEMORANDUM OPINION AND ORDER

KATHERINE P. NELSON, Magistrate Judge.

Before the Court1 is the motion for summary judgment (Doc. 43), filed June 14, 2013 by Defendant State Farm Fire and Casualty Company ("State Farm"), along with State Farm's brief and other materials in support of and/or related to the motion (Docs. 44-51). The plaintiffs, Marvette Johnson and Debbie Johnson, have responded (see Doc. 55), State Farm has filed a reply in support of its motion (see Doc. 61), and, for the reasons explained herein, State Farm's motion for summary judgment is GRANTED in its entirety. The Johnsons' claims are DISMISSED with PREJUDICE, and the Clerk is DIRECTED to CLOSE this case.

I. Procedural Background.

On December 8, 2011, the Johnsons filed their complaint, asserting two claims (breach of contract and bad faith), against their insurer, State Farm, in the Circuit Court of Mobile County, Alabama (Doc. 1-1). An amended complaint (Doc. 1-2), making changes to only the ad damnum clause, was filed December 12, 2011. After discovery in the state action made it clear to State Farm that the Johnsons were seeking damages in excess of the federal jurisdictional minimum, $75,000, State Farm timely removed this case to federal court on August 23, 2012.2 (See generally Doc. 1.) No motion to remand was filed, and, on November 20, 2012, the Court entered the Rule 16(b) scheduling order (Doc. 14).

The scheduling order required the Johnsons to, among other things, make their disclosure of expert testimony as required by Rule 26(a)(2)3 on or before March 15, 2013. (Doc. 14, ¶ 6.) While State Farm's Rule 26(a)(2) disclosure, made April 19, 2013 (see Doc. 32), was timely (see Doc. 14, ¶ 6), the Johnsons' disclosure (Doc. 35), made May 2, 2013, was not. Consequently, the Court granted State Farm's unopposed motion to strike the Johnsons' expert disclosure. (See Docs. 38, 39, 42.)

After State Farm moved for summary judgment, on June 17, 2013, the Court issued an order (Doc. 53), setting July 11, 2013 as the deadline for the Johnsons to respond to the motion and July 25, 2013 as the deadline for State Farm to file its reply.

On July 11, 2013, the Johnsons filed their response (Doc. 55), a pleading titled "proposed findings of fact and conclusions of law" (Doc. 56),4 and a "request for leave to file additional pages" (Doc. 57). On July 17, 2013, on the basis that the Johnsons had "filed no motion for summary judgment in this case[,]" the Court struck the "proposed findings" and denied the "request to file additional pages." (Doc. 59.)

On July 20, 2013, the Johnsons filed a "motion for leave to re-file excerpts of stricken document as statement of disputed facts" (Doc. 60), in which they acknowledged that they did not move for summary judgment, but advised the Court that their "proposed findings" were based on Rule 56(f)(1), "which provides that the Court has discretion to enter summary judgment in favor of a nonmovant after giving notice and a reasonable time to respond, if required by the record evidence, and no disrespect for the Court or evasion of the deadline for filing Motions for Summary Judgment was intended" (id., ¶ 2).5 On July 22, 2013, the Court denied their motion (see Doc. 61), noting that "[i]f, after a review of the evidence and arguments in support of, and in opposition to, summary judgment, the Court believes the plaintiffs may be entitled to summary judgment, it will issue an order advising the parties of its intent to utilize Rule 56(f)(1) and set an appropriate briefing schedule" (id. at 6).6

Also before the Court are two motions to strike—one filed by the Johnsons (Doc. 58), concerning an expert report submitted by State Farm, to which State Farm has responded (see Doc. 66), and one filed by State Farm itself (Doc. 64), concerning evidence the Johnsons proffer in opposition to the summary judgment motion. As the Court previously noted (see Doc. 65), at summary judgment, "[i]t is the function of a court, with or without a motion to strike, . . . to eliminate from consideration any argument, conclusions, and assertions unsupported by the documented evidence of record offered in support of the statement," Rangel v. Schmidt, Cause No. 2:09-CV-071, 2011 WL 5570691, at *4 (N.D. Ind. Nov. 16, 2011); therefore, the Court will consider the motions to strike "on an ongoing basis herein, and only to the extent necessary to resolve the pending Motion for Summary Judgment[,]" King v. Alabama Dep't of Pub. Health, Civil Action No. 09-0503-WS-C, 2010 WL 3522381, at *1 n.1 (S.D. Ala. Sept. 2, 2010).

II. Pertinent Factual Background.

The parties' submissions establish the following facts, construed in a light most favorable to the Johnsons.7

A. The Policy.

State Farm insured the Johnsons' house located at 7651 Patruski Road, Coden, Alabama under homeowner's policy no. 01-13-5853-0 (Doc. 46-1 at 1-38) (the "Policy"), which was effective from June 28, 2010 through June 28, 2011 (see id. at 2). The Policy contains certain limitations and exclusions applicable to the Johnsons' insurance claim and, ultimately, this litigation. The key exclusion language appears in Paragraph 2 of "SECTION I — LOSSES NOT INSURED. the Policy, which begins as set out below:

(Id. at 23 (emphasis removed).)

The Policy also includes an endorsement excluding fungus (including mold). (See id. at 7.) Among other things, that endorsement adds a subparagraph to Paragraph 2, above:

All other policy provisions apply.

(Id. (emphasis removed).)

B. The Johnsons' Claim and State Farm's Response.

In late 2010, the Johnsons began remodeling their house. (See Doc. 46-1, D. Johnson Dep. excerpts at 44 (4:14).) In the course remodeling, the Johnsons removed the flooring in their living room and discovered mold in the crawl space below the house. (See Doc. 46-1, M. Johnson Dep. excerpts at 88-97 (14:13-18; 18:8-26:3).) Sometime after the mold was discovered, the Johnsons discovered a pinhole leak in a plumbing pipe under their kitchen floor.9 (Id. at 98-100 (28:19-30:20).) Mr. Johnson testified that it was uncertain how long the leak existed prior to its discovery and that the leaking pipe sprayed a mist up toward the floor "[r]ight in the middle of the kitchen." (Id.) On February 21, 2011, the Johnsons filed a claim with State Farm regarding the mold; Claim Representative Tony Bartlett was assigned their claim, and he scheduled an inspection of the Johnsons' house for February 25, 2011. (See Doc. 47 at 2, Bartlett Decl., ¶¶ 5, 6.) Following his inspection on February 25, 2011, Bartlett wrote the Johnsons on March 2, 2011,

(Doc. 47 at 21.)

On August 5, 2011, Attorney Warhurst wrote Bartlett to inform State Farm that he represented Mrs. Johnson "in her property damage claim of 2/19/2011." (Doc. 48 at 22.) Warhurst wrote Bartlett again on September 23, 2011, to inform Bartlett that "[t]he cause of loss is a burst water pipe" and to name Samantha Green as his clients' appraiser. (Id. at 24.) In October 2011, Green instructed Bartlett to re-inspect the Johnsons' house, and he scheduled a second inspection on October 20, 2011. (Doc. 47 at 4, Bartlett Decl., ¶ 12.) Following this inspection, Bartlett wrote to Warhurst on October 25, 2011,

(Doc. 47 at 13.)

Samantha Green also inspected the Johnsons' house. (See generally Doc. 48, Green Dep. excerpts, at 38-50.) Green testified that she found no evidence of a plumbing leak and that she observed water lines/discoloration on cinder blocks supporting the house, which she indicated was evidence of pooling water. (See id.) She further testified that Mr. Johnson confirmed to her that water pooled under the house after rainstorms and that, based on her inspection and conversation with Mr. Johnson, she told Warhurst she would not serve as the plaintiffs' appraiser on this case. (See id.)

Joel P. Wehrman, P.E.—who the Johnsons stipulate qualifies as an expert witness in this case10—also inspected the Johnsons' property (the house was not standing at the time Wehrman became involved) at the request of State Farm on April 18, 2013. (See Doc. 48, Wehrman Dep. excerpts, at 73 (31:8-15).) While he was not able to inspect the actual house, Wehrman's opinion (as set out in his report (see generally Doc. 49 at 1-83)) is based on a review of photographs from Bartlett's two prior inspections, the State Farm claim file, and depositions taken in this litigation, and independent research regarding applicable soil conditions. (See Doc. 48 at 69-74 (21:17-24:17; 31:16-23).) Wehrman testified that it was his opinion that the damage to the Johnsons' house was caused by excessive moisture and humidity in the crawl space, and he observed that the conditions indicated a long-term moisture problem, created by ground surface water runoff and ground-based moisture, which took the form of vapor. (See id. at 75-77 (36:3-38:22); see also Doc. 49 at 1-83.) He further opined that the installation of the sidewalk and concrete slab worsened the problems by (1) increasing the likelihood that runoff water would enter the crawl space and (2) reducing the ventilation to the crawl space. (See id.) He also concluded that the damage was not caused by a plumbing leak. (See id.)

III. Wehrman's Expert Report May Be Considered At Summary Judgment.

As an initial matter, because State Farm is the only party to offer expert testimony (to show that the damage to the Johnsons' home was caused by a means excluded by the Policy), the Court must first address the admissibility of that expert's report. The Johnsons, in their motion to strike (Doc. 58), contend that the Court cannot rely on the expert report proffered by Wehrman, which they contend is hearsay, because Wehrman is not "present in court to testify . . . and to be cross-examined on the substance" of his report. (Id. (citing Forward Communications Corp. v. United States, 608 F.2d 485 (Ct. Cl. 1979); Tokio Marine & Fire Ins. Co., Ltd. v. Norfolk & W. Ry. Co., 172 F.3d 44, 1999 WL 12931 (4th Cir. Jan. 14, 1999).)

Both cases the Johnsons cite involve consideration of "expert" reports from witnesses not present at trial. See, e.g., Tokio Marine, 1999 WL 12931, at *3 ("Even if Clark were qualified as an expert, the report was inadmissible hearsay. Reports stating an expert opinion `are not admissible without the preparer being present in court to testify as to his qualifications as an expert and to be cross-examined on the substance.'" (quoting Forward Communications, 608 F.2d at 511)). In Forward Communications, the court discussed at length the admissibility of an appraisal report11 as a business record under Federal Rule of Evidence 803(6),12 see 608 F.2d at 509-11, and, after examining the proper meaning of the word "opinion" in Rule 803(6), concluded

Id. at 511. Similarly, in Tokio Marine, the Fourth Circuit, reversed the district court's decision to rely on a report from an expert absent at trial: "Since the report presents the opinion of someone who did not testify at trial, and it was offered as evidence of the appraisal value of the damaged cars, it was hearsay." 1999 WL 12931, at *3. The appeals court "also disagree[d] with the district court's alternative theory for admitting it under the business records exception to the hearsay rule." Id.

Here, the Johnsons were given free reign to test Wehrman's "qualifications as an expert and [] cross-examine[ Wehrman] on the substance" of his report during his deposition on May 16, 2013. Forward Communications, 608 F.2d at 511; Tokio Marine, 1999 WL 12931, at *3. Accordingly, any argument that Wehrman's report should not be considered now, on summary judgment, because the Johnsons do not have an opportunity to re-cross-examine Wehrman is misplaced. As the Johnsons were given the opportunity to depose, and did depose, Wehrman, the problems associated with hearsay evidence are simply not present. Compare Farrish v. Mississippi State Parole Bd., 836 F.2d 969, 798 (5th Cir. 1988) (Hearsay evidence "presents a two-fold problem: it prevents [a party] from confronting and cross-examining the declarant, and unreliable hearsay undermines the accuracy of the fact-finding process.") and United States v. Evans, 216 F.3d 80, 85 (D.C. Cir. 2000) ("The problem with hearsay is that it deprives the defendant of the opportunity to cross-examine the person who uttered the statement at issue."), with Barradas v. Holder, 582 F.3d 754, 762 (7th Cir. 2009) ("We have observed that `problems of fundamental fairness associated with hearsay testimony are dispelled when the testimony is subject to cross-examination[.]'" (quoting Olowo v. Ashcroft, 368 F.3d 692, 700 (7th Cir. 2004))).

Moreover, at summary judgment, while "[t]he general rule is that inadmissible hearsay cannot be considered on a motion for summary judgment[,]" Jones v. UPS Ground Freight, 683 F.3d 1283, 1293 (11th Cir. 2012) (quoting Macuba v. Deboer, 193 F.3d 1316, 1322 (11th Cir. 1999)), "a district court may consider a hearsay statement in passing on a motion for summary judgment if the statement could be reduced to admissible evidence at trial or reduced to admissible form[,]" id. at 1293-94 (quoting Macuba, 193 F.3d at 1323); see also Hosea v. Langley, No. Civ.A. 04-0605-WS-C, 2006 WL 314454, at *8 (S.D. Ala. Feb. 8, 2006) ("[T]he law is clear that `inadmissible hearsay may sometimes be considered by a court when ruling on a summary judgment motion,' provided that such hearsay is reducible to admissible form at trial." (quoting Pritchard v. Southern Co. Svcs., 92 F.3d 1130, 1135 (11th Cir. 1996))).

As observed by the court in Marceau v. International Brotherhood of Electrical Workers, 618 F.Supp.2d 1127 (D. Ariz. 2009), "[a]t the summary judgment stage, [courts] do not focus on the admissibility of the evidence's form. We instead focus on the admissibility of its contents." Id. at 1142 (quoting Fraser v. Goodale, 342 F.3d 1032, 1036-37 (9th Cir. 2003)). The defendants there, similar to the Johnsons here, argued that an expert report from Bradley Preber was "inadmissible evidence" at summary judgment. See id. at 1143. But the court disagreed:

Id.; accord Jones, 683 F.3d at 1294 ("The most obvious way that hearsay testimony can be reduced to admissible form is to have the hearsay declarant testify directly to the matter at trial." (citing Pritchard, 92 F.3d at 1135)).

Therefore, because, one (as stated above), the Johnsons already have had the opportunity to "cross-examine" Wehrman as to his report and, two, to the extent his report constitutes hearsay, Wehrman could testify to (and has already been deposed regarding) all relevant portions of his report from personal knowledge or, alternatively, use that report to refresh his recollection, the Court can rely fully on the substance of Wehrman's expert report in ruling on the pending motion for summary judgment. Cf. Lowery v. General Motors Corp., No. 07-0410, 2007 WL 4374291, at *1 (W.D. La. Dec. 14, 2007) ("An expert report, unaccompanied by any affidavit or deposition testimony, is nothing more than hearsay and is not competent summary judgment evidence." (emphasis added)). Accordingly, the Johnsons' motion to strike (Doc. 58) is DENIED.

IV. Summary Judgment and Breach of Contract.

Although bad faith claims have been asserted, those claims rise or fall on the breach of contract claim, which, at summary judgment, turns on whether State Farm has carried its burden to prove that the Johnsons' loss is excluded under the Policy and, if so, whether the Johnsons have carried their burden to show that their loss is covered under the Policy. As this overview of the parties' burdens at summary judgment shows, Alabama's law with regard to insurance augments the familiar Rule 56 analysis. Accordingly, the summary judgment and breach of contract standards and analyses are discussed in tandem below.

A. Standard.

It is well-established that, consistent with Federal Rule of Civil Procedure 56(c), summary judgment is proper "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 and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

Archie v. Home-Towne Suites, LLC, 749 F.Supp.2d 1308, 1312 (M.D. Ala. 2010) (some internal citations modified and footnote added).

"A contract of insurance, like other contracts, is governed by the general rules of contracts." Ware v. Nationwide Ins. Co., No. 7:11-cv-4272-LSC, 2013 WL 1680514, at *5 (N.D. Ala. Apr. 12, 2013) (quoting Twin City Fire Ins. Co. v. Alfa Mut. Ins. Co., 817 So.2d 687, 691 (Ala. 2001)). "The material elements necessary to establish a cause of action for breach of contract under Alabama law are: `(1) a valid contract binding the parties; (2) the plaintiff[`s] performance under the contract; (3) the defendant's non performance; and (4) resulting damages.'" Id. (quoting Reynolds Metal Co. v. Hill, 825 So.2d 100, 105-06 (Ala. 2002) (citing, in turn, State Farm Fire & Cas. Co. v. Slade, 747 So.2d 293, 303 (Ala. 1999))).

Under Alabama law, "the insured bears the burden of establishing coverage by demonstrating that a claim falls within the policy, while the insurer bears the burden of proving the applicability of any policy exclusion." Id. (citations omitted).14 "[N]umerous [] cases in Alabama illustrate this dichotomy in Alabama law, both in declaratory judgment actions by insurers and coverage actions by insureds." American Safety Indem. Co. v. T.H. Taylor, Inc., 513 Fed. App'x 807, 813 (11th Cir. Mar. 14, 2013) (citations omitted). There, the Eleventh Circuit cautioned litigants not to overlook

scope of coverage, [as is the case here,15] the burden is on the carrier. Id. Importantly, however,

Ware, 2013 WL 1680514, at *5 (quoting Belt Auto. Indem. Ass'n v. Ensley Transfer & Supply Co., 99 So. 787, 790 (Ala. 1924)). In this regard, when an insured is defending against an insurer's motion for summary judgment—in which the insurer argues "the application of an exclusion or an assertion that the policy does not apply for some reason other than the scope of coverage," American Safety, 513 Fed. App'x at 813—as is the case with this motion, "allocation of the burden of persuasion [is] compounded against [the insured]." Id. at 814. That is,

Id. (citations omitted); compare id., with, e.g., Ware, 2013 WL 1680514, at *5 (once State Farm offers "evidence showing prima facie that the case is one of specified nonliability, the burden of showing a case within the operation of the policy remains upon [the Johnsons,]" who, thus, must come forward with evidence to show their loss is covered by the Policy (emphasis added)).

B. Analysis.

1. State Farm has met its burden to prove the applicability of an exclusion in the Policy.

As set forth above, State Farm contends it is entitled to summary judgment on the breach of contract claim because it has come forward with sufficient evidence to establish there is no genuine issue of fact that the cause of damage to the Johnsons' house is excluded under the Policy. (See Doc. 44 at 18 (according to State Farm, "[i]t is clear from the substantial evidence presented that the damages to [the Johnsons'] house were caused by surface water runoff, which is excluded under the Policy under the exclusion for losses caused by water damage.").) State Farm's substantial evidence, set out above, includes the testimony of its claim representative (who twice inspected the house); the testimony of an adjuster originally hired by the Johnsons' counsel (who also inspected the house); and the testimony of, and report prepared by, an independent expert. Based on a review of this evidence and the Johnsons' response to it, it is the opinion of the Court that State Farm has carried its burden to prove the applicability of the Policy's exclusion for water damage not caused by the residence's plumbing system (Doc. 46-1 at 22-23). See, e.g., American Safety, 513 Fed. App'x at 813; Ware, 2013 WL 1680514, at *5. Having determined that State Farm's evidence shows "prima facie that the case is one of specified nonliability, the burden [is now on the Johnsons to] show[] a case within the operation of the [P]olicy[.]" Ware, 2013 WL 1680514, at *5.

2. The Johnsons have failed to come forward with admissible (or relevant) evidence to show that the damage to their house is covered by the Policy.

Aside from their effort to strike Wehrman's expert report, the Johnsons do not necessarily challenge State Farm's evidence that the damage to their house was caused by surface water runoff. They instead oppose summary judgment by "submitting evidence that the damage, at least in part, was from moisture resulting from the broken pipe" and "also point to covered damage due to a leak in the roof." (Doc. 55 at 1; see also id. at 2 ("While there may be some overlap between damage due to the broken pipe[] and damage[] allegedly due to long term water accumulation from other sources, and Plaintiffs do not concede that State Farm has proven long term accumulation as the cause, there is a substantial question of fact and triable issue as to the extent of damages resulting from the leakage from a hole in the pipe which was accidental, and discovered and repaired quickly by the insured, which is a covered claim.") (second emphasis added).)

The following is evidence that the Johnsons contend shows that "the damage, at least in part, was from . . . the broken pipe":

The Johnsons contend that the isolated (or localized) wetness, as particularly observed by Plumber Johnson, can be attributed to leaking from a broken pipe and refutes State Farm's evidence "that the damages arose from long term accumulation of water under the house." (Doc. 55; see also id. ("The fact that the entire area underneath the house was not wet disputes the bare claim that the slope of property caused routine accumulation of water.").) They further attack any assertion that the sidewalk or a lack of gutters contributed to the long-term accumulation of water. (See Doc. 55 at 6-7.)

As explained above, the Johnsons' untimely attempt to designate expert testimony failed. (See Docs. 35, 38, 39, 42.) Thus, while the Johnsons attempt to now use lay opinions to refute State Farm's theory that the damage at issue was caused by the long-term accumulation of ground water, only State Farm has offered expert evidence as to the cause of damage. As shown in a recent (unpublished, yet instructive) Eleventh Circuit decision, this is significant. In fact, Nix v. State Farm Fire & Casualty Co., Inc., 444 Fed. App'x 388 (11th Cir. Oct. 20, 2011) (per curiam) and two Alabama district court decisions relying on Nix are remarkably similar to the controversy now before this Court. Taking Nix first,

Id. at 389.

In Nix, State Farm introduced expert testimony to show that the retaining wall "collapsed because it was not properly designed or built and collapsed from hydrostatic pressure." Id. at 390; see also id. (the insurer's expert further opined "that the retaining wall lacked reinforcing steel, as required by a local building code, and could not withstand the pressure created by groundwater that had accumulated during a heavy rainfall[, and] that a french drain installed alongside the retaining wall failed to disperse the groundwater because the drain had been covered with clay soil instead of gravel"). The Nixes failed to offer their own expert testimony. They instead "argued that the main line water pipe burst and caused the retaining wall to collapse"—an argument "they based . . . on the opinions of Terry Nix and a contractor who made temporary repairs to the wall[.]" Id. But the district court ruled, and the Eleventh Circuit agreed, that "those opinions were not admissible as lay testimony. Neither Nix nor the contractor witnessed the wall collapse or had personal knowledge about the construction of the Nixes' home." Id. (citing FED. R. EVID. 701 and concluding, "Because the collapse of the retaining wall was attributable to causes excluded from coverage under the Nixes' insurance policy, State Farm did not breach its contract with or owe a duty to further investigate or to pay the claim filed by the Nixes.").

In Ware v. National Insurance Co., the court determined that the insurer had "offered sufficient evidence of nonliability pursuant to the Policy's water damage exclusion" (two inspections by its claims adjuster, the second conducted with a roofing expert, and an inspection by an independent engineering company). 2013 WL 1680514, at *5. While all three inspections "were consistent in finding that the water damage to Plaintiff's home arose from ground water accumulation not covered under the Policy[,]" the plaintiffs asserted that they had "put forth enough evidence to avoid summary judgment and to create a jury question regarding whether the damage [was] excluded under the Policy" by offering testimony from William Petty, "who originally installed the roof[,] allegedly inspected it after the storms in 2009[,]" and opined "that that the water damage was caused by leakage from the allegedly stormdamaged roof." Id. at *5, *3. According to Judge Coogler, however, "[t]he problem with Plaintiffs' argument [was] that Petty's testimony ha[d] very little probative value [because, as the court explained elsewhere in its decision, it could not] consider Petty's testimony to the extent he offer[e]d an expert opinion." Id. at *6.

Id. (record citation omitted); see also id. ("Importantly, this conclusion is supported by precedent from this Court and the Eleventh Circuit." (citing and discussing Nix)); id. at *7 ("As in Nix, Petty's testimony is not based on first hand knowledge, and therefore is not admissible as a lay witness's opinion. Consequently, Plaintiffs have no evidence at all to counter Nationwide's position that the water damage arose from surface and ground water accumulation. Without evidence that their loss is covered by the Policy, Plaintiffs cannot show Nationwide breached the terms of the Policy by refusing to pay their claim. As in Nix, Plaintiffs are unable to rebut Nationwide's `uncontroverted evidence.' Therefore, Nationwide's Motion for Summary Judgment is due to be GRANTED with regard to Plaintiffs' breach of contract claim." (emphasis added and footnote omitted)).

One year before Ware, the court in McPherson v. Allstate Indemnity Co., Civil Action No. 3:11cv638-WHA, 2012 WL 1448049 (M.D. Ala. Apr. 26, 2012), also relying on Nix, reached the same conclusion. See id. at *7-8.

Id. at *8 (quoting Matsushita, 475 U.S. at 586).

The Johnsons, like the plaintiffs in Nix, Ware, and McPherson, attempt to refute the insurer's causation evidence—including a report by, and testimony, from a witness accepted by both sides to be an expert—with lay witness accounts that they hope show the damage/loss is covered under the Policy. However, even when this evidence is construed in a light most favorable to the Johnsons, all it shows is that there was a pinhole leak in a pipe under the Johnsons' house. True, unlike the lay testimony presented in at least some of the cases discussed above, contra Nix, the lay testimony here is not based on observations looking far back in time. Still, the lay testimony is by witnesses who either personally spotted or repaired the leak after the fact. As such, this testimony does not present the Court with evidence to show that the leaking pipe caused the damage to the Johnsons' house. Thus, in the face of State Farm's evidence—particularly, evidence from an independent expert— the evidence the Johnsons point to is not enough to avoid summary judgment as to causation. Compare Ware, 2013 WL 1680514, at *6 (the "the crucial question" before the Court is what caused the damage to the insured property; that question "is not one a lay witness can answer" (citing FED. R. EVID. 701(c) (stating that lay witness opinion must "not [be] based on scientific, technical, or specialized knowledge within the scope of Rule 702")), with McPherson, 2012 WL 1448049, at *8 ("When construed in a light most favorable to the nonmovants, that evidence is not sufficient to create a question of fact as to the cause of the fire, in the face of [the expert's] report and deposition testimony. To avoid summary judgment, the nonmoving party must do more than show that there is some metaphysical doubt as to the material facts." (citation and internal quotation marks omitted)).

3. The Johnsons have failed to come forward with any evidence to show that any damage caused by a broken water pipe, which they contend is covered by the Policy, is somehow divisible from damage that is clearly excluded under the Policy.

Next, key to the Johnsons' effort to avoid summary judgment being entered against them, is their apparent position that they have submitted "evidence that the damage, at least in part, was from moisture resulting from the broken pipe" and "due to a leak in the roof[,]" which they contend would both be covered by the Policy. (Doc. 55 at 1 (emphasis added); see also id. at 2 ("While there may be some overlap between damage due to the broken pipe[] and damage[] allegedly due to long term water accumulation from other sources, . . . there is a substantial question of fact and triable issue as to the extent of damages resulting from the leakage from a hole in the pipe which was accidental, and discovered and repaired quickly by the insured, which is a covered claim." (second emphasis added).)

Because the Johnsons are not able to rebut State Farm's uncontroverted evidence as to causation—and because they have offered no evidence to show that the damage to the house would not have occurred in the absence of long term water accumulation (excluded under the Policy)—the Court must also reject their attempts to show that the breach of contract claim can be presented to a jury to determine what extent of the damages were caused by means not excluded under the Policy. This is so, at least in part, because the Policy contains an unambiguous "anticoncurrent-causation" (or "ACC") clause:

(Doc. 46-1 at 23 (emphasis added).)

"A general background principle of [many state's] contract law holds that parties may decline to adopt common-law causation rules so long as the contract's provisions do not offend public policy." Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 435 (5th Cir. 2007) (citations omitted). Although, in Leonard, the Fifth Circuit was interpreting Mississippi law, the court of appeals pointed to an Alabama Supreme Court decision as "representative of [the] trend" that "[m]ost jurisdictions concur that ACC clauses comport with state public policy." Id. As characterized by the Fifth Circuit, State Farm Fire & Casualty Co. v. Slade, 747 So.2d 293 (Ala. 1999),

Id.; contra Burgess v. Allstate Ins. Co., 334 F.Supp.2d 1351, 1363-64 (N.D. Ga. 2003) (where a policy excluded "loss consisting of or caused by . . . rust or other corrosion, mold, wet or dry rot," the court applied the common law efficient proximate cause doctrine—"if the mold exclusion combines with a covered risk that is the proximate cause of the loss, then the Plaintiff's losses may be covered"—and determined that, because it had "already concluded that Plaintiff has made a prima facie showing that she has a claim covered under the policy[ and] presented evidence that she has suffered losses due to mold infestation[,]" and the insurer had made a statement indicating the possibility of coverage for mold in certain circumstances, the issue of "whether Plaintiff's loss is caused by the mold infestation or the water damage is a question of fact to be submitted to a jury[,]" and summary judgment would be denied).

In Tuepker v. State Farm Fire & Casualty Co., 507 F.3d 346 (5th Cir. 2007), decided shortly after Leonard, the Fifth Circuit examined the same ACC clause and water damage exclusion that appear in the Johnsons' policy, see id. at 353-54 ("The State Farm ACC Clause does differ from the Nationwide ACC Clause in that it states that the policy does not cover `any loss which would not have occurred in the absence of one or more of the following excluded events.' However, this difference does not introduce any ambiguity or significantly differentiate the clause from the ACC Clause at issue in Leonard. Both clearly state that excluded losses . . . will not be covered even if a nonexcluded event or peril acts `concurrently or in any sequence' with the excluded event to cause the loss in question."). There, the Fifth Circuit concluded that "the ACC Clause in combination with the Water Damage Exclusion clearly provides that indivisible damage caused by both excluded perils and covered perils or other causes is not covered." Id. at 354 (emphasis added). The Johnsons offer no evidence—they merely speculate—that the mere presence of a leak means that some damage may be attributable to that leak and not caused by long term water accumulation, which is the cause of the damage according to the State Farm claims representative; a separate insurance adjuster; and, most importantly, an independent expert witness. See Swenson v. State Farm Fire & Cas. Co., 891 F.Supp.2d 1101, 1110-11 (D.S.D. 2012) ("The lead-in clause to the fungus exclusion in the Policy at issue precludes application of the efficient proximate cause doctrine to the fungus exclusion itself. Because the efficient proximate cause doctrine does not apply to the fungus exclusion and because the fungus exclusion is not ambiguous, Plaintiffs may not recover for any loss that would not have occurred in the absence of fungus, regardless of whether a covered peril was the efficient proximate cause of the loss.") (granting summary judgment for State Farm); cf. Tuepker, 507 F.3d at 354 (explaining, "the ACC Clause by its terms applies only to `any loss which would not have occurred in the absence of one or more of the below listed excluded events,' and thus, for example, if wind blows off the roof of the house, the loss of the roof is not excluded merely because a subsequent storm surge later completely destroys the entire remainder of the structure; such roof loss did occur in the absence of any listed excluded peril" (emphasis in original)).17

4. The Johnsons' contentions regarding roof damage and mold and mildew.

The Johnsons' opposition to summary judgment references a roof leak. (See, e.g., Doc. 55 at 8-9 (referencing Bartlett's deposition testimony, discussing his October 25, 2011 letter to Warhurst, in which it was explained that State Farm's "inspection revealed additional water leakage from a roof leak . . . paid for under a separate claim").) The amended complaint filed in state court makes no reference to a roof leak. (Compare, e.g., Doc. 1-2, ¶ 4 ("water from a pipe leak underneath the Plaintiffs' home resulted in property damage"), with id., ¶ 6 (Bartlett "blamed the cause of damage to plaintiffs' home on rain water"), with id., ¶ 7 ("Plaintiffs hired a plumber to repair the source of the leak and received an invoiced that described the work performed as `. . . repair leak on water line under house . . . .'"), with id., ¶ 9 (State Farm stated that "claim was not a covered loss because the damage resulted from continuous seepage and leakage of water and moisture from a water source outside the house plumbing system.").) This case has not proceeded on that theory. And, most importantly, State Farm offers no admissible proof (expert or competent lay testimony) to show that the damage at issue in this case was caused by a roof leak. (Compare Doc. 47 at 25, Bartlett Mar. 2, 2011 letter to the Johnsons, ("As we discussed, I observed water damage to your ceiling tiles in several rooms which would qualify for a second claim with a separate deductible. If you wish to file another claim for this damage you will need to contact your agent to have her set up this claim."), with Doc. 48 at 24, Warhurst Sept. 23, 2011 letter to Bartlett ("The cause of loss is a burst water pipe.").) Next, as State Farm points out on reply (Doc. 62 at 10-11), the Johnsons' opposition fails to address State Farm's arguments regarding the Policy's exclusion for mold and mildew related damages.

V. Bad Faith Claims.

Although the Johnsons' operative complaint combines their bad faith claims into one count (see Doc. 1-2 at 3; ¶ 20 ("Defendant State Farm, in bad faith, failed to investigate and failed to pay Plaintiffs' claim.")), bad faith failure to pay (also known as "normal" bad faith) and bad faith failure to investigate (also known as "abnormal" bad faith" are "distinct" causes of action, which "should not be confused," and, as such, a court must "address[] them separately." Ware, 2013 WL 1680514, at *7 (citing Jones v. Alfa Mut. Ins. Co., 1 So.3d 23 (Ala. 2008)).

A. Failure to Pay.

Ware, 2013 WL 1680514, at *7. Because the Johnsons' breach of contract claim fails, the Court is unable to find that the third element necessary to establish a bad faith failure to pay/normal bad faith claim can be established as a matter of law. As such, State Farm's motion for summary judgment should be granted as to this claim.

B. Failure to Investigate.

Ware, 2013 WL 1680514, at *7. Just as the court in Ware found, "because the Court has already determined that summary judgment is due to be entered against [the Johnsons] on their breach of contract claim, their abnormal bad faith claim must fail as well."

VI. Conclusion.

For the reasons discussed above, the Johnsons' motion to strike (Doc. 58) is DENIED, and State Farm's motion for summary judgment (Doc. 43) is GRANTED in its entirety. The Johnsons' claims are DISMISSED with PREJUDICE, and the Clerk is DIRECTED to CLOSE this case.18 A corresponding judgment will be entered separately.

DONE and ORDERED.