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Homeowners Insurance - Earth Movement Exclusion

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  • Lawrence
    Message 1 of 1 , Jan 25, 2013
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      2013 NY Slip Op 30111(U)
      January 16, 2013
      Supreme Court, Suffolk County
      Docket Number: 10-43870
      Judge: Hector D. LaSalle

      Edited by Lawrence N. Rogak

      This is an action, declaring the plaintiffs' right to coverage under a homeowner's insurance 
      policy issued by the defendant.  The plaintiffs  own and reside at the property located at 8 Greenbrier Avenue, Farmingville, New York.  According to the plaintiffs, on February  1, 2012, two pipes beneath the slab under the kitchen floor  burst, causing a sustained leaking of hot water which compromised the foundation and resulted in  extensive damage to the home and its fixtures.  The plaintiffs promptly notified the defendant of the loss. 

      In response to the notice, the defendant retained an engineer to conduct an inspection of the premises.  The  engineer conducted  a site inspection  on February  18, 2010  and issued  a report  of his findings on February  22.  2010.  While noting  his inability  to  divine the  exact cause of the damage because  of  its subterranean source, the engineer determined that the physical damage to the home was a "direct result of an ongoing water damage event originating from leaking piping" beneath the slab and along the rear wall. 

      As  evidence  of  the  damaged  piping,  he  noted an  exterior patio  expansion board  "forced  upward"  by  hydrostatic water pressure at a site directly aligned with the probable leak location below the slab.  He also determined that some the observed damage, including gaps and separations of moldings from first-floor ceilings and misalignments of certain doors, windows, and cabinets, was consistent with a settlement of the slab in  the area of the suspected leak. 

      By  letter dated March 9,2010, the defendant disclaimed coverage for the loss based upon 
      language in the policy excluding losses resulting from "earth movement" and "settling." 

      Our expert has determined there was long-term water seepage beneath the slab of the home. 
      The water seepage caused soil displacement and earth movement to the ground under the 
      slab.  The expert`s conclusion was that there was a pipe leaking into the soil, but [sic] was 
      not able to examine the pipe to confirm the source of the water. There was no direct physical 
      damage caused to the home from the water discharge.  In addition, our investigation  found 
      the problem with the pipe existed before you purchased the home.  Please be advised that it is the intent of your homeowner policy to afford coverage for losses that are single, sudden, and accidental in nature. In order for there to be coverage, there must be direct physical damage to the home from the water leaking from the plumbing source.  As outlined above, the displacement of the soil  and the settling of the home, are specifically excluded from coverage. Furthermore, we have not been shown the damaged pipe, and we find your failure to protect the property from further damage has violated the conditions of the policy. 
      Therefore we must respectfully deny your claim in its entirety. 

      By letter dated April 8,201 0, the defendant confirmed that it had disclaimed coverage, based on the engineer's report, because "the direct cause of loss was earth movement and settling" and, further, because "the plumbing problems existed prior to the purchase of the home and before our policy was in force."  This action followed . 

      The plaintiffs now move for summary judgment invalidating the disclaimer and declaring 
      that the defendant is obligated to provide coverage for their loss.  Notwithstanding the defendant's stated reliance on the engineer's report, the plaintiffs contend that the reasons cited by the defendant as justification for its disclaimer do not, in fact, appear in that report  and, in particular, that nowhere in the report did the engineer advance any opinion that the damage was the result  of earth movement beneath the slab.  Even allowing, further, that the "earth movement" exclusion were otherwise applicable, the plaintiffs contend that the damage was caused  by the displacement of fill beneath the slab, not by the movement of earth, so that the exclusion does not apply in any event. 

      `The plaintiffs annex to their moving papers a copy of the policy, which provides, in pertinent part, as follows: 

      A.  Coverage A - Dwelling and Coverage B - Other Structures 
      I .   We insure against risk of direct physical loss to property described in Coverages A and 
      2.  We do not insure, however, for loss: 
      a.  Excluded under Section I - Exclusions; 
      * * *  
      c.  Caused by: 
      * * *  
      (2) Freezing, thawing, pressure or weight of water or ice, whether driven by wind 
      or not, to a: 
      * * *  
      (b) Footing, foundation, bulkhead, wall, or any other structure or device that 
      supports all or part of a building,  or other structure; 
      * * *  
      ( 5 )  Any of the following: 
      * * *  
      (f)  Settling, shrinking, bulging or expansion, including resultant cracking, of 
      bulkheads, pavements, patios, footings, foundations, walls, floors, roofs or ceilings; 
      * * *  
      Exception To Paragraph c.(5) 
      Unless the loss is otherwise excluded, we cover loss to property covered under Coverage 
      A or B resulting from an accidental discharge or overflow of water or steam from within a: 
      (i i) Plumbing, heating, air conditioning or automatic fire protective sprinkler system or 
      household  appliance on the "residence premises".  This includes the cost to tear  out and 
      replace any part of a building, or other structure, on the "residence premises", but only when necessary  to  repair the  system or  appliance. However,  such tear out and  replacement coverage only applies to other structures if the water or steam causes actual damage to a building on the "residence premises". 
      * * *  
      A. Wc do not insure for loss caused directly or indirectly by any of the following.  Such loss 
      is  excluded  regardless  of  any  other cause  or  event contributing  concurrently or  in  any 
      sequence  to  the  loss.  These  exclusions  apply  whether  or  not  the  loss  event  results  i n  
      widespread damage or affects a substantial area. 
      * * *  
      2.  Earth Movement 
      Earth Movement means: 
      a.  Earthquake,  including  land shock waves or tremors before, during or  after a 
      volcanic eruption; 
      b.  Landslide, mudslide or mudflow; 
      c.  Subsidence or sinkhole; or 
      d.  Any other earth movement including earth sinking, rising or shifting; 
      caused by or resulting from human or animal forces or any act of nature unless direct 
      loss by fire or explosion ensues and then we will pay only for the ensuing loss. 
      * * *  
      U .   We do not insure for loss to property described in Coverages A and B caused by any of 
      the following.  However, any ensuing loss to property described in Coverages A and B not 
      precluded  by any other provision in this policy is covered. 
      * * *  
      3.  Faulty, inadequate or defective: 
      a.  Planning, zoning, development, surveying, siting; 
      b. Design, specifications, workmanship, repair, construction, renovation, remodeling, 
      grading, compaction; 
      c.  Materials used  in repair, construction, renovation or remodeling; or 
      d.  Maintenance; 
      of part or all of any property whether on or off the "residence premises". 

      "Generally, it is for the insured to establish coverage and for the insurer to prove that an exclusion in the policy applies to defeat coverage" (Consolidated Edison Co. of N. Y. v Allstate Ins. Co., 98 NY2d 208, 746 NYS2d 622,625 [2002]; Bread & Butter v Certain Underwriters at Lloyd's, London, 78 AD3d  1099, 91 3 NYS2d 246 [2010]).  "To negate coverage by virtue of an exclusion. an insurer must cstablish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation. and applies in the particular case" (Continental Cas. Co. v Rapid-American Corp., 80 NY2d 
      640, 593 NYS2d 966,972 [1993]). 

      Here, as it is apparently undisputed (and tacitly acknowledged by the defendant) that the plaintiffs' claim falls within the general coverage provisions of the policy, the only question presented  is whether the defendant established the applicability  of some exclusion to coverage.  The court finds that it did not.  The defendant submits only the affirmation of its attorney, which is  of no probative or evidentiary significance (see e.g. U.S. Natl. Bank Assn. v Melton, 90 AD3d 742, 934 NYS2d 352 [ 2011]).  Although the attorney refers in his affirmation to certain deposition testimony in which Anthonv Trezza is claimed to have acknowledged that there were problems with the plumbing even before he purchased the home, the attorney's reading of the testimony is not borne out on review of the transcript, 
      nor  is it shown how such  general knowledge on the plaintiffs' part might translate to an  exclusion from coverage. 

      Even were the court to consider the unsworn statements contained in the report of the defendant's retained  engineer-likewise not  in  evidentiary form-it  would not avail  the defendant.  As the  plaintiffs correctly note. the report does not refer to any movement of earth or soil.  To the extent that the defendant may seek to rely on the policy exclusion for "settling," it is clear that the settlement of the slab described in the report is not so much a physical cause of the loss as an effect.  And while the report does make reference to  water  pressure  as  a  possible  cause of the  loss, the  defendant  does  not  expressly rely  on  the  policy exclusion for "pressure or weight of water" as a basis for disclaiming coverage. 

      Accordingly, since the defendant failed to present evidentiary proof in admissible form sufficient to defeat the plaintiffs' right to summary judgment, the motion is granted and the plaintiffs are entitled to a declaration of coverage in their favor. 
      The court directs that the claims as to which summary judgment was granted are hereby severed and that any remaining claims for monetary relief shall continue. 
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