## Facts

- Benton Smith, a homeowner and farmer, insured his residence under a State Farm homeowner’s policy.
- The policy excluded coverage for property damage “caused by domestic animals.”
- Smith owned a cow that fell into his in-ground swimming pool, causing substantial damage.
- Smith submitted a claim for the pool damage; State Farm denied coverage, asserting the cow was a “domestic animal” within the exclusion.
- The trial court found the exclusion ambiguous as applied to a cow and entered judgment for Smith; State Farm appealed.

## Issues

1. Whether the homeowner’s policy exclusion for damage caused by “domestic animals” unambiguously applied to damage caused by the insured’s cow.
2. If the term was reasonably susceptible to more than one meaning in context, whether the exclusion had to be construed against the insurer and in favor of coverage.

## Decision

- The Louisiana Court of Appeal affirmed the judgment for Smith.
- The court held that “domestic animals,” as used in the exclusion, was ambiguous in the context of a homeowner’s policy when applied to livestock such as a cow.
- Because the exclusion was ambiguous, it was construed strictly against State Farm and in favor of coverage for Smith’s pool damage.

## Legal Principles

- Insurance policy terms are interpreted according to their general, popular meaning as understood by a reasonable insured in context.
- If policy language is susceptible to more than one reasonable interpretation, courts adopt the interpretation favoring coverage.
- Exclusions are interpreted narrowly; ambiguity in an exclusion is construed against the insurer, as drafter of the policy.

## Conclusion

The court required State Farm to provide coverage because the homeowner’s policy exclusion for damage caused by “domestic animals” did not clearly inform an ordinary insured that it included livestock such as a cow, and the resulting ambiguity had to be resolved in favor of the insured.


Smith v. State Farm Fire & Cas. Co., 381 So. 2d 913 (La. Ct. App. 1980)