SHREE RIDDHI SIDDHI HOSPITALITY, LLC v. SCOTTSDALE INSURANCE COMPANY

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.




                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-5210-15T2


SHREE RIDDHI SIDDHI
HOSPITALITY, LLC,

        Plaintiff-Appellant,

v.

SCOTTSDALE INSURANCE COMPANY,

        Defendant-Respondent.

_______________________________

              Argued October 30, 2017 – Decided November 29, 2017

              Before Judges O'Connor and Vernoia.

              On appeal from Superior Court of New Jersey,
              Law Division, Monmouth County, Docket No.
              L-0627-15.

              Mauro C. Casci argued the cause for appellant.

              George A. Prutting, Jr., argued the cause for
              respondent (Prutting & Lombardi, attorneys;
              Gavin Fung and Mr. Prutting, on the brief).

PER CURIAM

        Plaintiff Shree Riddhi Siddhi Hospitality LLC appeals from

an order granting defendant Scottsdale Insurance Company's summary
judgment motion in this insurance coverage dispute.                Because we

agree with the motion court's determination that the insurance

policy clearly and unambiguously excludes coverage for plaintiff's

property damage loss from a sewerage backup, we affirm.

      The facts are not disputed.          An apartment owned by plaintiff

suffered extensive property damage as the result of a sewerage

backup.     Plaintiff sought coverage for the property damage under

its   insurance    policy       with   defendant.      Defendant   disclaimed

coverage,    asserting    the     policy   contained    an    express   general

exclusion for damages caused by "[w]ater or water-borne material

which backs up through sewers or drains."

      Plaintiff   filed     the    pending   insurance       coverage   action.

Defendant filed a summary judgment motion.              In an oral opinion,

the court found the policy's clear language excluded coverage for

damages caused by sewerage backups, and entered an order granting

summary judgment to defendant.         This appeal followed.

      We conduct a de novo review of a trial court's grant of

summary judgment, and apply the same standard as the trial court.

Conley v. Guerrero, 
228 N.J. 339, 346 (2017).                   The movant is

entitled to summary judgment if the record shows "there is no

genuine issue as to any material fact and "the moving party is

entitled to a judgment or order as a matter of law."                      Ibid.

(quoting Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co.

                                       2                                A-5210-15T2
of Pittsburgh, 
224 N.J. 189, 199 (2016)); see also R. 4:46-2(c).

Interpretation of an insurance policy presents a legal question,

which we review de novo.             Selective Ins. Co. of Am. v. Hudson E.

Pain Mgmt. Osteopathic Med. & Physical Therapy, 
210 N.J. 597, 605

(2012).

       There are general principles that guide our interpretation

of an insurance policy.              "[C]overage provisions are to be read

broadly, exclusions are to be read narrowly, potential ambiguities

must be resolved in favor of the insured, and the policy is to be

read     in    a    manner    that    fulfills     the     insured's       reasonable

expectations."        Ibid.     However, where "the plain language of [a]

policy    is       unambiguous,      we   will   not     engage   in   a    strained

construction to support imposition of liability or write a better

policy for the insured than the one purchased."                    Templo Fuente,

supra, 
224 N.J. at 200; accord Abboud v. Nat'l Union Fire Ins.

Co., 
450 N.J. Super. 400, 406-07 (App. Div. 2017).

       Where a provision in an insurance policy "is subject to more

than one reasonable interpretation, it is ambiguous[.]" Templo

Fuente, supra, 
224 N.J. at 200.                It is "[o]nly where there is a

genuine ambiguity" that a court should "read the policy in favor

of the insured."             Ibid.    A genuine ambiguity exists if "the

phrasing of the policy is so confusing that the average policy

holder cannot make out boundaries of coverage."                   Ibid.

                                           3                                  A-5210-15T2
    Applying these principles, we discern no basis to reverse the

court's determination that the policy does not provide coverage

for plaintiff's property damages.    It is undisputed the damages

were caused by a sewerage backup, and the policy includes a clear

exclusion for such damages.       In pertinent part, the General

Exclusions provision states:

         A. We do not insure for loss caused directly
         or indirectly by any of the following.

              . . . .

         3. Water Damage

            Water Damage means:

             . . . .

              b. Water or water-borne material which
              backs up through sewers or drains or
              which overflows or is discharged from a
              sump, sump pump or related equipment . .
              . .

    There is no ambiguity in this provision.        It expressly

excludes from coverage the precise damages for which plaintiff

seeks coverage under the policy: water damage caused by a backup

through a sewer line.   Indeed, plaintiff does not allege this

clear and unequivocal language otherwise excludes from coverage

the property damage it sustained.     Instead, plaintiff contends

there are other provisions in the policy that create an ambiguity




                                4                         A-5210-15T2
about coverage, and that the ambiguities should be resolved in its

favor as the insured.

       More particularly, plaintiff relies on a policy provision

entitled     "Perils    Insured    Against,"    which   in   pertinent      part

identifies the physical losses covered by the policy.                The Perils

Insured    Against     provision    broadly    states   there   is    coverage

"against risk of direct physical loss to property described in

Coverages A and B."       Coverage A is the coverage applicable here

because it is for the dwelling on plaintiff's property where the

sewerage backup occurred.1

       The Perils Insured Against provision, however, has certain

exclusions. In the first instance, the provision states that the

policy does not provide coverage "for loss . . . [e]xcluded under

General Exclusions."       Thus, the Perils Insured Against provision

plainly states that coverage is not provided for losses excluded

under the General Exclusions.         Again, plaintiff does not dispute

that   the   General    Exclusion    provision    unambiguously       excludes

property damage caused by sewerage backups from coverage under the

policy.




1
  Coverage B, which applies to other structures on the property,
is not pertinent here because plaintiff seeks coverage only for
damage to the dwelling, which is expressly covered under Coverage
A.

                                       5                                A-5210-15T2
     Subsection   (c)    of   the   Perils   Insured   Against   provision

excludes from coverage losses resulting from eight separately

delineated causes.      Paragraph c.(8) excludes from coverage losses

caused by "[a]ny of the following":

          (a) Wear and tear, marring, deterioration;

          (b) Mechanical   breakdown,   latent   defect,
          inherent vice, or any quality in property that
          causes it to damage or destroy itself;

          (c) Smog, rust or other corrosion, mold, wet
          or dry rot;

          (d) Smoke from agricultural            smudging   or
          industrial operations;

          (e) Discharge, dispersal, seepage, migration
          release or escape of pollutants unless the
          discharge, dispersal, seepage, migration,
          release or escape is itself caused by a Peril
          Insured Against named under Coverage C.2

               . . . .

          (f) Settling, shrinking, bulging or expansion,
          including resultant cracking, of bulkheads,
          pavements, patios, footings, foundations,
          walls, floors, roofs or ceilings; or

          (g) Birds,   vermin,        rodents,    insects   or
          domestic animals.




2
 In general terms, the Coverage C provision of the policy provides
coverage for "personal property, usual to the occupancy as a
dwelling."   Plaintiff here sought coverage for property damage
under Coverage A. Subsection c.(8)(e) also includes a definition
of pollutants that is not applicable to plaintiff's coverage claim.

                                     6                             A-5210-15T2
      The   undisputed     facts   establish,    and    plaintiff    does     not

dispute, that the sewerage backup that caused plaintiff's claimed

property damages was not the result of any of the conditions or

occurrences identified in subsection c.(8).            A sewerage backup is

not one of the causes of loss in subsection c.(8).                   Moreover,

defendant did not deny coverage because plaintiff's losses were

caused by any of the conditions or occurrences listed in subsection

c.(8). Thus, under the plain language of the policy, the subsection

c.(8) exclusions have no application to plaintiff's claimed loss

and do not support plaintiff's claimed entitlement to coverage.

      Ignoring     the   inapplicability    of   subsection      c.(8)   to   its

coverage claim, plaintiff argues the policy is ambiguous because

it contains an "Exception To c.(8)" provision which, according to

plaintiff, suggests that damages caused by sewerage backups are

covered.     We are not persuaded.

      The Exception To c.(8) provision does not create an ambiguity

concerning the coverage for plaintiff's claimed loss because it

details     only   exceptions   to    the   exclusions    from    coverage      in

subsection c.(8) of the policy.        The Exception To c.(8) provision,

however, is inapplicable here because plaintiff's losses were not

caused by any of the conditions or occurrences in subsection c.(8).

Plaintiff cannot conjure up coverage or an ambiguity in the policy

by   relying   on   an    exception   to    defined    exclusions    that     are

                                       7                                 A-5210-15T2
inapplicable to the cause of plaintiff's loss and were not relied

upon by defendant to deny coverage.           See Stafford v. T.H.E. Ins.

Co., 
309 N.J. Super. 97, 105 (App. Div. 1998) (finding far-fetched

interpretations of a policy are insufficient to create an ambiguity

requiring coverage).       Plaintiff was not entitled to coverage under

the plain language of the General Exclusions and the Perils Insured

Against provision's unambiguous reiteration that coverage is not

provided    for   losses    excluded    under   the   General     Exclusions.

Plaintiff was not denied coverage under subsection c.(8), and

therefore   the   exceptions    to     the   subsection   c.(8)    exclusions

detailed in the Exception To c.(8) provision are inapplicable and

do not create an ambiguity concerning coverage.

     Moreover, even if the Exception To c.(8) provision applied,

its plain language requires rejection of plaintiff's coverage

claim for two reasons.       First, the provision unambiguously states

that it does not provide coverage where "the loss is otherwise

excluded."3 Again, losses caused by sewerage backups are otherwise

excluded by the General Exclusions and again in the Perils Insured

Against provision.         Second, the Exception To c.(8) provision

provides coverage, as an exception to the exclusions in subsection

c.(8), for "an accidental discharge or overflow of water . . .


3
  The Exception To c.(8) provision states that it does not extend
coverage to losses excluded under the General Exclusions.

                                       8                              A-5210-15T2
from within .     .   . a sewer pipe off" of plaintiff's property.

Here, there is no claim that plaintiff's losses were caused by

discharge from within a sewer pipe off of plaintiff's property.

To the contrary, the undisputed facts show plaintiff's losses

resulted from a discharge of water from a sewer pipe that was

within plaintiff's apartment.

      In sum, we are convinced the policy is not "so confusing that

the   average    policyholder   cannot   make   out   the   boundaries    of

coverage," and therefore reject plaintiff's assertion there was a

genuine ambiguity in the policy that should be resolved in favor

of finding coverage.     Weedo v. Stone-E-Brick, Inc., 
81 N.J. 233,

247 (1979).     The motion court correctly determined that losses due

to sewerage backups, like the losses sustained by plaintiff, are

excluded from coverage under the plain language of the General

Exclusions and the Perils Insured Against provision.

      Affirmed.




                                    9                              A-5210-15T2