The Rogak Report: 03 July 2006 ** Property Insurance - Sewer Backup **
- PROPERTY DAMAGE CAUSED BY SEWER BACKUP IS EXCLUDED FROM PROPERTY
Sephardic Lebanese Congregation Inc. v. Travelers Indemnity Co. of
Connecticut (Supreme Court, Kings County) (Index no. 52604/02)
Defendant Travelers moved for summary judgment dismissing the
complaint, asserting that the plaintiff's insurance policy did not
provide coverage on the property damage claim for water damage that
the plaintiff, Sephardic Lebanese Congregation sustained on January
6, 2002 from a toilet overflow in its premises.
Travelers asserted that "the policy excludes coverage for damages
caused by water which backs up through sewers or drains when the
stoppage is located in pipes off the insured premises except where
the cause of the back up originates on the insured premises. The
policy provides coverage when the stoppage is in pipes on the
insured's premises. The evidence is overwhelming that the flooding
plaintiff sustained was due to a stoppage, not on its premises, but
in the city sewer main beneath the public thoroughfares. Given the
facts of the case, plaintiff has no right of recovery here and its
complaint must be dismissed."
In support of that contention, Travelers pointed to three facts: 1.
that a private plumber called by the plaintiff snaked its pipes, was
unable to clear the stoppage, and thereupon directed Sephardic to the
Department of Environmental Protection (DEP); 2. that DEP, which
according to supervisor does not work on private sewer lines,
responded to Sephardic's premises, but thereafter resolved the
problem by clearing a blockage in the city sewer main outside of the
plaintiff's premises; and, 3. that its privately retained
professional engineer concluded "within a reasonable degree of
engineering certainty, that plaintiff's flood was due to a stoppage
in the city's sewer lines underneath the public thoroughfares and not
because of any condition originating within plaintiff's premises."
Sephardic cross moved for summary judgment for the following reasons:
The DEP supervisor referenced by Travelers "testified throughout his
deposition that he lacks any knowledge of the events that took place
at the subject premises the night of the loss. Not only was he not
present, he was not even the supervisor assigned to the service
call." The professional engineer, in turn, failed to detail any
substantive tests that he conducted to determine the cause of the
alleged backup. The report that he submitted is dated prior to
receipt of any documents from DEP that he claimed to have relied
upon. Hence, his "conclusions were drawn without personal knowledge
and without any documentary support.
"Sephardic also argues that Travelers' position is flawed in that
the subject policy fails to define what a 'back up,' as referenced to
in the policy, actually is, and Travelers has failed to offer any
evidence from anyone who can testify that the origin of the water
entering the premises was the result of a 'back up' in the City's
water mains as opposed to another source."
Sephardic posited that it could have been the result of the excess
rain (almost an inch over four to five hours) that had fallen, as
evidenced by the climatological data report for the day in question.
In addition, Sephardic noted that there is no explanation given for
the cause of the interruption in the water main.
Finally, Sephardic asserted that "no investigation was done to
determine the nature of the substance that entered the premises.
Accordingly, Defendant failed to show that the substance entering
Plaintiff's premises was water, as required by the policy . . . .the
substance that entered the premises was not water. It was brownish in
color, had an arduous smell, and contained a significant amount of
dirt and other filth [sewage]."
Sephardic maintained that "New York courts have consistently held
that under an all risk policy of insurance, losses are covered unless
specifically excluded. Accordingly, the insurer has the burden to
demonstrate that the loss of covered property resulted from facts
placing the loss within the exclusion in the policy in order to avoid
liability." Furthermore, Sephardic argued that "where comprehensive
words in a contract are followed by an enumeration of specific
things, under the rule of ejusdem generis the things coming within
the comprehensive words will be limited to those of a like nature to
those enumerated." Therefore, water flowing from a toilet and into
the subject premises, such as here, cannot be understood to be
included as an 'other opening' which would fall under an exclusion
under the subject policy.
On the basis of the preceding, Sephardic argued that Travelers "has
failed to provide any conclusive proof or evidence demonstrating that
a 'back up' constitutes water coming through the sewers and drains,
regardless of its source," and/or to "conclusively determine the
actual cause of the water damage."
In addition, Sephardic pointed out that an additional policy
endorsement dealing with "Off Premises Services" provides for
coverage for when there is loss or damage as a result of interruption
to the water supply services, specifically including the water mains,
which then causes a loss or damage to the subject premises.
Travelers cited a series of other jurisdictional (non-New York) cases
that clearly stand for the proposition that the plain and ordinary
meaning of the water damage exclusion - water that backs up through
sewers and drains - includes water containing raw sewage.
The Court held, first, that "the law... establishes that terms in
insurance policies should be given their plain, ordinary meaning by
the courts, and that the tests to be applied in construing an
insurance policy are common speech . . . and the reasonable
expectation and purpose of the ordinary businessman. Using those
criteria, this court can find neither find a basis to conclude that
the damage was caused by anything other than water inseparably mixed
with raw sewage that resulted from a stoppage in the water main
outside of the premises, nor can it find any unclearness in the
policy language that can be reasonably interpreted in a way that
affords coverage. This court therefore finds that in the instant
matter, Travelers has made a prima facie showing that its exclusion
applies; namely, that the stoppage in question was in pipes off the
insured premises which resulted in back up therein and required the
clearing of the outside city sewer main to dislodge."
"The absence of material facts to contradict that showing was borne
out by the deposition of the owners of the premises, DEP personnel,
and a retained engineer, whereas the points raised by Sephardic
amount to little more than conjecture and semantics that do not
persuasively raise any material issues of fact. Accordingly,
Travelers' motion for summary judgment is granted and Sephardic's
denied. This constitutes the decision and order of this Court."