Copacabana Realty LLC v Fireman's Fund Ins. Co.

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Copacabana Realty LLC v Fireman's Fund Ins. Co. 2013 NY Slip Op 30960(U) April 29, 2013 Supreme Court, Suffolk County Docket Number: 10-2919 Judge: Arthur G. Pitts Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] INDEX NO. 1 0-29 1 9 SUPREME COURT - STATE OF NEW YORK I.A.S. PART 43 - SUFFOLK COUNTY PRESENT: ITon * ARTHUR G. I ITTS Justice of the Supreme Court COPACABANA REALTY L,LLc. Plaintiff, - against MOTION DATE 9-27-1 2 ADJ. DATE 11-29-12 Mot. Seq. # 007 - MG CDTSP CIARELLT & DEMPSEY, P.C. Attorney for Plainti~f 737 Roanoke Avcnuc Riverhead, New York 1 1901 - FTRT:MAN S FUND INSURANCE COMPANY i TRESSLER, LLP Attorney for Defendant Aincrican Automobile and AMERICAN AUTOMOBILE INSURANCE Insurance Company C Oh4PAN Y. One Penn Plaza, Suite 4701 New York, New Yorlc 10 1 19 Defendants. ! ____------_____--___------------------------------------------X Upon thc following papers nunibered 1 to L r e a d on this motion for summary iudgmcnt ; Notice olMotion/ Order to Show Cause nnd srrpporting papers 1 - 19 ; Notice of Cross Motion and supporting papers ; Answering Affidavits and supporting p a p s 20 - 27 ; Replying Affidavits and supporting papers 28 - 29 ; Other plaintifl s memorandum of law, ( d 1 ) it is, ORDERED that tlic motion by defendant American Automobile Tnsurance Company for summary judgmcnt i n its favor dismissing, the complaint against it is granted. This action arises out of the alleged breach of a homeowner s insurance agrccnicnt covcring a singlc family rcsidcncc located at 757 Daniels Lane, Sagaponack, New York. Plainti 1TCopacabana Rcalty, L I X , allegcs that it is the assignee of J. Darius Bikoff and Jill Bikoff, who, on Januniy 4, 2009 were issued a Prestige 1 Ionic insurance policy by defendants Fireman s Fund Insurance Conipany ( FFIC ) and American Auloniobile Insurance Company ( AAIC ) covering said residence. On Octo\xr 2.2009, plaintiff filed a proof of loss with the defendants regarding alleged damages it incurred as a result o r faulty renovations m:dc to the sub-ject prcmises. Following an inspection of the premiscs by a clainis ad,iuster, AATC issued a letter to plnintiffdisclaiining coverage ofthe alleged loss on the ground the sub.jcct insurance policy spccifically cxcludes damage to the premises caused by faulty construction and dcfectivc worlcniansliip. By its amended cornplaint, plaintiff alleges, inter alia, that dcrendants brcaclicd their [* 2] Copacnbana Rcalty v Fircman s Fund Insurance Index No. 1 0-29 19 Page No. 2 contractual obligation by wroiig Tu Ily refusing to cover the damage to the subject prcmiscs dcspile receiving timely notice ofthc loss. The amended complaint also seeks a judgment declaring that thc dcfendants are obligated to cover tlic physical damage and loss sustained by the plaintiff. By order dated August 25, 20 10, this court granted a motion by defcndant FFTC for judgmcnt in its favor dismissing tlic complaint against it on the grounds FFIC did not underwrite thc sub-jcct policy and shared no contractual relationship with the plaintiff. However, the action was continucd against AAJC, which now niovcs for summary judgment in its favor dismissing the complaint. AAIC asserts that it correctly disclaimed coveragc, as the damage to the premises, which included, inter alia, sloping floors on the first and sccond floor of the building, was caused by the faulty workmanship of independent contractors hired by plaintiffto perform renovations to the premises. AAIC further asserts that thc allcgcd loss docs not fall within i f s coverage for property damage attributable to a collapse, since therc has bccn no collapse at the premiscs as that tcrm is defined by plaintiffs insurance policy. Plaintiff opposes tlic motion, arguing that a triable issue exists as to whether thc faulty workmansliip exclusion contained in the parties agreement excludes ensuing losscs which arise from tlic cffccts of such work. Plainli ff also argues that AAIC s disclaimer is defective since it erroneously attrihules thc denial of coverage to improper construction or workmanship, rather than the faulty, inadcquatc or defective workinanship stated in the agreement. In addition, plaintiff argues that defendant waivcd any cxclusion related to the alleged collapse oftlie building by failing to list such exclusion in its disclaimcr, and that a triable issue exists as to wlicther the property damage is attributable to a collapsc, as a plaintiff nccd not await total collapse o f a building, to be eligible for such coverage. At his cxaniination before trial, Kevin Buckley testified that he was tlie claims ad.juster assigned to handle and invcstigatc plaintiff s claim on behalf of AAIC, and that he conducted an indcpendent inspection to assess thc damagc at the premises. Mr. Buckley testified that the homeowners, their engineer and the insurance agent were present during the inspection, and that he observed that the kitclicn floor liad gaps and was sagging i n tlic middle of the room. Mr. Buckley testified that during an inspection of tlic joists bclow tlie kitclicn floor, he observed that holes had been made in them to facilitate electrical wiring and plumbing, and that floor jacks and lumbcr had been placed perpendicular to the joists to further support thc floor. Mr. Buckley liirthcr testified that, based on his observations, he determined that the property damage was not covered because daniagc arising from faulty workmanship and construction is specifically excludcd by plaintiffs policy. At his cxnmination beforc trial, Jay Bikofftestified that the subject prcmiscs was in need ofextensive renovation when it was purchased, and that he hircd a project manager and scvcral contractors lo perform the work. Mr. BiltoNtestified that thc contractors performed shoddy work, and that scvcral defects in the house, including tlie sagging kitchen floor, became apparent during the renovation. MI-.Bikoff tcstificd that despitc moving out of the premises so the problems could bc fixed, some of the problems became progrcssivcly worse upon his rcturn to the property. Mr. Bikoff further testified that a review by an indepcndeut gencral contractor found that the previous contractors were negligcnt in almost cvcry aspect of the .cvorlc they pcrformed. [* 3] Copacabana Realty v Fircman s Fund Insurance lndcx No. 10-2919 Papc No. 3 AATC s lcttcr disclaiming coverage of plaintiffs loss states, intcr alia, that [t1hc description o f loss indicated your kitchen floor has settled due to improper or inadequate construction. . . We inspccted you residencc with your agcnt, Alan Benet, CFO Hanan Goldenthal and caretaker Christopher on October 6, 2009 . . . Rascd on this inspection, it is our opinion that the damage is related to improper construction and or workmanship by tlic contractor. Unfortunately, this loss is not covered under your insurance policy. Additionally, while the letter states that the kitchen floor has settled due to inipropcr or inadequate construction and or worl<nianship, it further sets forth the full text of the dcfcctivc or inadequate worl<mans hi 17 cxc 1usi on. Thc section of the agreement entitled Additional Property Coverages states, in pcrtincnt part, as fol 1om s: Wc covcr direct physical loss to covered property that results from a collapse causcd by . . . USC of dcfective material or methods in construction, remodeling or renovation i f tlic collapse occui sduring the course of construction, remodeling or renovation. Thc insurancc agrecn-lent further defines collapse as: tlic actual, abrupt falling down of a building or part o f a building. A collapse occurs only wlien a building or part Ctfa building has actually and abruptly fallen down. Collapse does not mcan a condition of il building including cracking, bulging, sagging, bcnding, shifting, Icaning, settling, shrinkagc, or expansion, that could lead to or contributc to its actual, abrupt falling down The scction of thc agreement cntitlcd Property Losses not Covered, provides, inter alia, that thc insurer: will not pay loss causcd by or resulting from any of the following: . . . inhcrcnt vicc, hiddcn or latcnt dcfcct or any quality in property that causes it to damagc or destroy itself . , . scttling, slirinking, bulging or expansion, including resultant cracking, or the activity or growl11 of 1-001s fiom plants, trees, or shrubs to pavements, patios, foundations, walls, floors, rook or ceilings. . .We do not cover losses caused by. . . faulty, inadcquatc or dcfcctivc . . . dcsign, spcci lications. workmanship, repair, construction, renovation, rcniodcling Wlicre an insurer denies coverage based upon an exclusion, the burden is on the insurcr to demonstrate that the exclusion applies in the particular case and that it is subject to no other rcasonable interprctation (Senhonrd Sur. Co. 1 Gillette Co., 64 NY2d 304, 31 1 , 486 NYS2d 873 r19841). An exclusion from covcrage must be specific and clear in ordcr to be enforccd, and a n ambiguity in an exclusionary clause must be construed most strongly against the insurer. However, a n unambiguous policy provision must be accorded its plain and ordinary meaning, and a court may not disrcgard tlic plain meaning of the policy s laiipuage in order to find an ambiguity where none exists (SenhonrdSirr. Co. v Cillcttc Co., sripm at 3 1 1.486 NYS2d 873; see Guncliicliulcn v Laszlo N. Tauber & ASSOC., LLC, 37 AD3d 760, 83 1 NYS2d 234 r2d Dcpt 20071; Ace Wire & Crrhle Co. v Aefnn Cas. & Sur. Co., GO NY2d 390, 398, 469 N Y J d 655 1 1 9 ~ ? ] Wilnpr v AllLvtnteIns. Co.. 99 AD3d 700. 953 NYS2d 49 [2d Tkpt 20121). : [* 4] Copacabana TicaIty v Fireman s Fund Insurance TlldCX NO. 10-29 19 Page No. 4 I Jere, AAIC ectahlished its prima facie entitlement to summaryjudgincnt dismissing thc complaint by dcnionstrating that its defective or inadequate workmanship exclusion clcarly and unanibiguously applies to plaintill s property damage (see SeahoardSur. Co. v Gillette Co., supra; Ace Wire & Cnhle Co. vAetna Cns. & Sur. Co., s r i p r n ; Guacliicltulcn v Laszlo N. Tauber & ASSOC., LLC, supiw). Significantly, the plain words of the agreement specifically exclude property damage caused by faulty, inadequatc or dcfective worl~manship. Moreover, the post-inspection report prepared by Kevin Buckley and thc deposition testimony of Jay Bikoff both confirm that the damage to the property arose from inadcquate and dcfcctive workmariship hy contractors who were hired to make major repairs and renovations to thc premises. In opposition plaintiff fails to raise a triable issue of fact warranting denial ofthc motion (see Alvarez vProspect Hosp., 68 NY2d 320,508 NYS2d 923 [1986]; WinegradvNew York Uiiiv. Med. Cfr.,64 NY2d 85 1,487 NYS2d 3 16 f198.51;Zi~ckerntan New York, 49 NYS2d 557,427 NYS2d 59.5 11 9801). Contrary v to plaintifrs asscrtion, the case of Laquillu Constr. Inc. v Travelers Indent. Co., 66 1 Supp 2d 543 (S.D. : N.Y. 1999) docs not require a di ffferent outcome, as the district court specifically notcd that the ensuing loss exception in that case should not be read so broadly that it swallowed the exclusionary clause contained in the insurance agreement and granted the insurers motion for summary judgment dismissing the complaint against it. Although the court notes that an ensuing loss claim may bc appropriatc whcrc thc initial defect caused n7hollyscparatc damage to another portion of the building s structurc, whcrc, as in this case, there was no such collatcral or subsequent damage, the ensuing loss exception does not apply (see Rnpid Park liidiistries v. Great Northern Iiis. Co., Fed. Appx. -, 2012 WL 5458023 (2d Cir. 20121; ITTIwdus. I Fnctorjl M i i t . Ins. Co., 303 AD2d 1 7 7 7 5 6 NYS2d 188 [ 1st Dept 19951; Naroh Dev. Cnrp. v Iiisurnnce Co. of N. Ant.. 21 9 AD2d 454, 63 1 NYS2d 155 [lst Dept 19951). Further, inasmuch as the ensuing loss provision is inapplicable under the circumstances of this case, plaintiff s argumcnt coiicerning alleged amhiguitics hctween the tcrm ensues and ensuing is unavailing. Plaintift-s reliance on coverage provided for property damage caused by a collapsc on the prcinises also lacks merit (see Rapp B. Props., LLCv. RLIIns. Co., 65 AD3d 923, 885 NYS2d 283 1 1 st Dcpt 20091; Rector St. FoodEnters., Ltd. IL Fire & Cas. Iiis. Co. o Conn., 3.5 AD3d 177, 827 NYS2d 18 1Ist Dept f 20061). Although the agreement provides coverage for a collapse that results from thc iisc of defective matcrial or methods in construction or renovation, the agreement specifically limits covcragc to a collapse that occurs during the course of such construction. Moreover, the agreement dclincs collapse as the actual, abrupt falling down of a building or part of a building. Indeed, the agrccrnent states that the tcrm collapsc docs not d e r to any cracking, bulging, sagging, bending, shifting, leaning, scttling, shrinkagc, or expansion, that could lead to or contribute to its actual, abrupt falling down. Although the court is aware of the Appellate Division Third Department s holding in Royal Indem. Co. v Grunherg, I55 AD2d 187, 553 NYS2d 527 (3d Dcpt 1990) where it found that a substantial impairment of thc structural intcgrity ofa premises was sufficicnt to constitute a collapse, that holding is inapplicable wherc, as licre, thc language of llic subjccl agreement unambiguously limits collapse to an abrupt falling, and ctcludcs cracking, hulging a h scltling as sufficient indicia of a collapse (see eg. Rapp B. Props., LLC v RLI Ins. Co., stipra; Rector St. Food Enters., L t . v Fire Ce Cas. Ins. Co. of Conn., supra; Residential Management (N. V.) Inc. t Fedcrd Ins. Co.. 8 84 I Supp 2d 3 [E.D. N.Y. 20 121; see Dalton v Harleysville Worcester Miit. Ins. Co., : 557 F3d 85 r2d Cir. 120091). [* 5] Conacabana Realty v Fireman s Fund Insurance Index No. 10-2919 Page No. 5 Accordingly, the motion by defendant American Automobile Insurance Company for summary judgment in its favor dismissing the complaint against it is granted. -/ Dated: Apri I 29, 20 13 ___\ J.S.C. XX FINAL DlSPOSITION -NON-FINAL DISPOSlTlON

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