| Harleysville Ins. Co. of N.Y. v Potamianos Props.,LLC |
| 2013 NY Slip Op 05154 [108 AD3d 1110] |
| July 5, 2013 |
| Appellate Division, Fourth Department |
| Harleysville Insurance Company of New York,Respondent, v Potamianos Properties, LLC,Appellant. |
—[*1] Nelson Levine Deluca & Hamilton, LLC, New York City (Steven P. Nassi ofcounsel), for plaintiff-respondent.
Appeal from a judgment (denominated order) of the Supreme Court, OnondagaCounty (Brian F. DeJoseph, J.), entered January 20, 2012. The judgment granted themotion of plaintiff for summary judgment, denied the cross motion of defendant forsummary judgment and declared that the claimed loss of defendant is not covered by thesubject insurance policy.
It is hereby ordered that the judgment so appealed from is unanimously affirmedwithout costs.
Memorandum: In this declaratory judgment action arising from a dispute overinsurance coverage, defendant appeals from a judgment that, inter alia, granted plaintiff'smotion for summary judgment and declared that the loss claimed by defendant is notcovered by the subject insurance policy. We now affirm. Defendant obtained insurancefrom plaintiff to cover a commercial building that it owns in Syracuse. The policy inquestion contains a "Water Exclusion Endorsement" (endorsement) that excludescoverage for damage caused by "[m]udslide or mudflow," as well as "[w]ater under theground surface pressing on, or flowing or seeping through . . .[f]oundations, walls, floors or paved surfaces; [or] . . . [b]asements,whether paved or not." Under the terms of the endorsement, the exclusion applies"regardless of whether [the loss] is caused by an act of nature or is otherwise caused."The endorsement further provides that, "if any of the [listed occurrences] results in fire,explosion or sprinkler leakage, we will pay for the loss or damage caused by that fire,explosion or sprinkler leakage."
While the policy was in effect, defendant's building sustained damage when anunderground water supply line ruptured. The water line measured six inches in diameterand provided water to the building's sprinkler system. The water pressure resulting fromthe rupture, in combination with the washing away of the soil adjacent to the building,caused a large section of the building's concrete block foundation wall to fall inward,thereby permitting water, mud, and debris to flow into and fill the basement. Uponreceiving notice of the claim by defendant, plaintiff conducted an investigation anddenied coverage for defendant's loss. Plaintiff thereafter commenced this action seeking adeclaration that the policy excludes coverage for defendant's [*2]loss.
Initially, we reject defendant's contention that plaintiff is bound by the coverageprovided under a prior version of the policy (cf. Janes v New York Cent. Mut. Ins.Co., 281 AD2d 982, 982-983 [2001]). Plaintiff established that the version of thepolicy effective at the time of the loss contained an enclosure notifying defendant of thechanges in the water exclusion endorsement, and thus defendant is bound by the terms ofthe present form of that endorsement (see Byron v Liberty Mut. Ins. Co., 63AD2d 710, 710 [1978], lv denied 45 NY2d 712 [1978]; see alsoInsurance Law § 3425 [d] [3]; 2 Couch, Insurance § 27:78 [3d ed]).
We agree with plaintiff that the court properly determined that coverage fordefendant's loss is excluded under the policy. Affording the unambiguous terms in thepolicy their plain and ordinary meaning (see White v Continental Cas. Co., 9 NY3d 264, 267[2007]; Oot v Home Ins. Co. of Ind., 244 AD2d 62, 66 [1998]), we conclude thatplaintiff established its entitlement to judgment as a matter of law by establishing that thepolicy does not provide coverage for defendant's loss (see generally Zuckerman vCity of New York, 49 NY2d 557, 562 [1980]). Specifically, because the loss arosewhen water from "under the ground" pressed on and flowed through the building'sfoundation walls into the basement, coverage is precluded under the endorsement (see generally Neuman v UnitedServs. Auto. Assn., 74 AD3d 925, 925-926 [2010]; Lattimore Rd. Surgicenter, Inc. vMerchants Group, Inc., 71 AD3d 1379, 1379-1380 [2010]).
Contrary to defendant's further contention, that portion of the endorsement providingcoverage where an excluded occurrence results in "sprinkler leakage" does not apply,inasmuch as the ruptured pipe did not cause the sprinkler to leak; rather, water from theruptured pipe caused part of the foundation wall to fall inward, thus flooding thebasement. Furthermore, the exclusion pertaining to "[w]ater under the ground surfacepressing on, or flowing or seeping through . . . [f]oundations, walls, floorsor paved surfaces; [or] . . . [b]asements" applies even though the lossresulted from a ruptured pipe rather than from a natural phenomenon. The endorsementexpressly provides that its exclusions are applicable regardless of whether the occurrenceis "caused by an act of nature or is otherwise caused" (cf. Cantanucci v Reliance Ins.Co., 43 AD2d 622, 623 [1973], affd 35 NY2d 890 [1974]; Novick vUnited Servs. Auto. Assn., 225 AD2d 676, 677 [1996]). The other sections of thepolicy, referred to by defendant for the first time on appeal and thus not properly beforeus (see Ciesinski v Town of Aurora, 202 AD2d 984, 985 [1994]), are, in anyevent, inapplicable to the loss at issue. Present—Scudder, P.J., Peradotto, Lindleyand Sconiers, JJ.