How did my htc get water damage?

Its never been dropped in water on the concrete in a puddle or anything but the water sticker is saying it did get water damage. now the screen has gone black with white lines randomly. my freind called me and i saw the screen alright,,,then a few minutes later i picked it up and it just was black and white lines. We called the people and they said they werent able to replace it because apparently the condensation from my basment caused the phone to get water damage. What can i Do? Howd it get water damage?