Pichel v. Dryden Mutual InsurancePichel v. Dryden Mutual Insurance
Plaintiff owns a four-building apartment complex, which was covered by an insurance policy issued by defendant. While the policy was in effect, two of the buildings sustained substantial water damage when waste water entered the first-floor apartments through, among other things, toilets, bathtubs and condensation drains. After plaintiff timely filed a property loss notice, defendant disclaimed coverage on the basis that the loss fell within multiple exclusions in thе policy, including, as relevant here, the “Water Damage” exclusion, which applies to a loss caused by “water which backs up through sewers or drains.” Plaintiff thereafter submitted a sworn statemеnt in proof of loss prepared by plaintiff‘s adjuster, contending that the cause of the loss—specifically, “[a]ccidental [o]verflow/[d]ischarge of a [p]lumbing [s]ystem“—was covered under thе policy, and defendant again disclaimed coverage.
Plaintiff subsequently commenced this action for breach of contract and for a declaration that the loss was covered under the terms of the policy. Following joinder of issue and discovery, plaintiff moved for partial summary judgment on liability and defendant cross-moved for summary judgment dismissing the complaint. Supreme Court granted plaintiff‘s motion, declared that the loss was covered under the terms of the policy and denied defendant‘s cross motion. Defendant now appeals.
Initially, we reject defendant‘s assertion that Supreme Court erred in denying its cross motion for summary judgment dismissing the complaint based on the court‘s erroneous interpretation of the policy. Defendant relies upon the “Water Damage” exclusion, which applies to, among other things, loss caused by “water which backs up through sewers or drains” (hereinafter the exclusion provision). A second exclusion, also еntitled “Water Damage,” provides that there is no coverage “for loss caused by repeated or continuous discharge, or leakage of liquids or steam from within a plumbing . . . system.”
Where an insurer relies on an exclusion to avoid coverage, it has the burden of demonstrating “that the exclusion is stated in clear and unmistakable language, is subject to no other reаsonable interpretation, and applies in the particular case” (Continental Cas. Co. v Rapid-American Corp., 80 NY2d 640, 652 [1993]; accord Nova Cas. Co. v Central Mut. Ins. Co., 59 AD3d 777, 778 [2009]; see Dean v Tower Ins. Co. of N.Y., 19 NY3d 704, 708 [2012]; Pioneer Tower Owners Assn. v State Farm Fire & Cas. Co., 12 NY3d 302, 307 [2009]). Moreover, we are “obligat[ed] to interpret the exclusion in a manner that gives full force and effect tо the policy language and does not render a portion of the provision meaningless” (Cragg v Allstate Indem. Corp., 17 NY3d 118, 122 [2011]; see Roman Catholic Diocese of Brooklyn v National Union Fire Ins. Co. of Pittsburgh, Pa., 21 NY3d 139, 148 [2013]; Raymond Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 5 NY3d 157, 162 [2005]; County of Columbia v Continental Ins. Co., 83 NY2d 618, 628 [1994]; Loctite VSI v Chemfab N.Y., 268 AD2d 869, 871 [2000]). “While [u]nambiguous provisions of a policy are given their plain and ordinary meaning, where policy language is unclear or subject to multiple reasonable interprеtations, such ambiguities are resolved against the insurer” (Matter of Progressive Ins. Cos. [Nemitz], 39 AD3d 1121, 1122 [2007] [internal quotation marks and citations omitted]; see Dean v Tower Ins. Co. of N.Y., 19 NY3d at 708; City of Elmira v Selective Ins. Co. of N.Y., 83 AD3d 1262, 1264 [2011]; Travelers Indem. Co. v Commerce & Indus. Ins. Co. of Can., 36 AD3d 1121, 1122-1123 [2007]).
In our view, when the exclusion and coverage provisions at issue here are read together, an ambiguity exists in the insurance policy аs to losses resulting from a backup and/or overflow from sewers, drains and/or plumbing systems. Although the
Significantly, defendant has failed to establish that its interpretation—that the loss is excluded from coverage so long as water backs up through a sеwer or drain, regardless of where the sewer or drain is located—is the only fair interpretation of the two provisions (see Pioneer Tower Owners Assn. v State Farm Fire & Cas. Co., 12 NY3d at 307; Essex Ins. Co. v Grande Stone Quarry, LLC, 82 AD3d 1326, 1329 [2011]; Villanueva v Preferred Mut. Ins. Co., 48 AD3d 1015, 1017 [2008]; Cantanucci v Reliance Ins. Co., 43 AD2d at 622-623). Further, defendant‘s interpretation of the exclusion provision еssentially renders meaningless the coverage for “overflow” of liquids from a plumbing system as provided in the coverage provision (see generally Cragg v Allstate Indem. Corp., 17 NY3d at 122; County of Columbia v Continental Ins. Co., 83 NY2d at 628).2 On the other hand, plaintiff‘s interpretation, as adopted by Supreme
We nonetheless conclude that Supreme Court erred in granting plaintiff‘s motion for partial summary judgment. As the movant, plaintiff was required to prove that a loss occurred and that such loss was a covered event under the terms of the policy (see Park Country Club of Buffalo, Inc. v Tower Ins. Co. of N.Y., 68 AD3d 1772, 1773 [2009]; Potoff v Chubb Indem. Ins. Co., 60 AD3d 477, 477 [2009]; DePaolo v Leatherstocking Coop. Ins. Co., 256 AD2d 879, 880 [1998]; see also United States Dredging Corp. v Lexington Ins. Co., 99 AD3d 695, 696 [2012]; Gongolewski v Travelers Ins. Co., 252 AD2d 569, 569 [1998], lv denied 92 NY2d 815 [1998]; Vasile v Hartford Acc. & Indem. Co., 213 AD2d 541, 541 [1995]). Inasmuch as plaintiff failed to proffer sufficient admissible evidence to demonstrate the absence of any factual issues as to whether he suffered a covered loss (see generally Jacobsen v New York City Health & Hosps. Corp., 22 NY3d 824, 833 [2014]; Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]), the motion should have been denied.
In that regard, plaintiff offered, аmong other things, his sworn statement in proof of loss—which declared the origin of the loss to be the “[a]ccidental [o]verflow/[d]ischarge of a [p]lumbing [s]ystem“—and the deposition testimony of Peter Bentkowski, plaintiff‘s property manager. According to Bentkowski, after multiple tenants reported that there was water coming into their apartments through toilets, bathtubs, drains for air conditioning units and grates that are located on the floor of the laundry rooms, the water to the applicable buildings was shut off, the municipality was notified and Roto-Rooter was called. Bentkowski testified that Roto-Rooter snaked out a clean-out valve leading to the waste line and removed foreign
Lahtinen, J.P., Garry and Rose, JJ., concur. Ordered that the order is modified, on the law, without costs, by reversing so much thereof as granted plaintiff‘s motion for partial summary judgment; motion denied; and, as so modified, affirmed.