Surabian Realty Co. v. NGM Insurance
971 N.E.2d 268
Mass.2012Background
- Surabian owns and operates commercial and residential properties in MA and RI; one property is a three‑story office building in Foxborough with a parking lot drain about 20 feet from the building.
- On June 29, 2009, heavy rains clogged the parking lot drain, causing water to back up and flood the building’s lower level after flooding amassed.
- Surabian insured the property under a business owner’s policy issued by NGM; it was an all‑risk policy with a water exclusion and an anticoncurrent cause clause.
- Surabian purchased the OMNI Gold endorsement, which replaced B.l.g.(3) to cap water backup losses at $25,000 per occurrence.
- NGM denied the claim; both sides moved for summary judgment; the judge held damage resulted from surface water and thus was excluded by the policy, and the anticoncurrent clause barred coverage.
- The appellate decision affirmed, holding the indorsement did not override the surface water exclusion or the anticoncurrent clause, so coverage was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the flood damage is excluded as surface water under the policy | Surabian argues the indorsement covers all flood damage, including backup‑related surface water. | NGM argues the surface water exclusion and anticoncurrent clause apply despite the endorsement. | Yes, surface water exclusion applies; indorsement does not override. |
| Whether the water backup endorsement creates coverage for surface water damage | Surabian contends the endorsement encompasses backup‑related damage, even if surface water is involved. | NGM contends the endorsement does not delete the surface water exclusion. | No; endorsement does not erase the exclusion, as read with the policy. |
| Whether the anticoncurrent cause provision bars coverage | Surabian asserts the clause does not apply to mixed causes. | NGM invokes anticoncurrent clause to exclude coverage when an excluded peril accompanies a covered peril. | Yes; anticoncurrent clause applies and precludes coverage. |
Key Cases Cited
- DeSanctis v. Lynn Water & Sewer Comm’n, 423 Mass. 112 (Mass. 1996) (defines surface water and its boundaries relevant to exclusions)
- Front Row Theatre, Inc. v. American Mfrs. Mut. Ins. Cos., 18 F.3d 1343 (6th Cir. 1994) (water that backs up into a drain may still be surface water unless it enters the drainage system)
- Casey v. General Accident Ins. Co., 178 A.D.2d 1001 (N.Y. 1991) (article on backups and concurrent causation in backups cases)
- Continental Cas. Co. v. Gilbane Bldg. Co., 391 Mass. 143 (Mass. 1984) (read policy as written; no revision of terms to create ambiguity)
- McGregor v. Allamerica Ins. Co., 449 Mass. 400 (Mass. 2007) (broad exclusions need not render policy illusory if some coverage exists)