Damage from Ruptured Water Main Not Covered

COMMERCIAL PROPERTY – WATER BACKUP EXCLUSION – ANTI-CONCURRENT CAUSATION CLAUSE
Lattimore Rd. Surgicenter, Inc. v. Merchants Group, Inc.
(4th Dept., decided 3/19/2010)

A ruptured water main in the basement of plaintiff's ambulatory surgical center in turn ruptured a portion of a nearby sewer line that carried wastewater from the surgical center. Water from the ruptured main entered the sewer line and into the surgical center through one of the surgical center's sewer drains, causing extensive damage to the surgical center.

Plaintiff's commercial property policy with Merchants Mutual Insurance Company excluded coverage for "loss or damage caused directly or indirectly by ... water that backs up or overflows from a sewer, drain or sump." A policy endorsement amended the exclusion to provide a special extension of up to $5,000 for damage to property "by water that backs up or overflows from a sewer, drain or sump."

Merchants paid the $5,000 coverage extension but denied payment for all other water damage.  Plaintiff brought this breach of contract action, and the parties moved from summary judgment.  Plaintiff apparently argued that the exclusion was inapplicable because it was the water main, rather than the sewer line, that had backed up. 

In AFFIRMING the lower court's order granting summary judgment to Merchants, the Fourth Department held:

"Where[, as here,] the provisions of an insurance contract are clear and unambiguous, they must be enforced as written' " (Oot v Home Ins. Co. of Ind., 244 AD2d 62, 66). Affording the unambiguous terms in the instant insurance contract their plain and ordinary meaning (see White v Continental Cas. Co., 9 NY3d 264, 267), we conclude that defendants established their entitlement to judgment as a matter of law by establishing that the policy does not provide coverage for the loss herein (see generally Zuckerman v City of New York, 49 NY2d 557, 562). Plaintiff's contention that the water exclusion is inapplicable because it excludes only sewer backups or overflows is misplaced.  Pursuant to the terms of the exclusion, there plainly is no coverage for loss stemming from "water that backs up or overflows through a sewer," irrespective of any other concurrent or subsequent contributing cause or event.

I have no idea why the court used "from a sewer, drain or sump" in first quoting the backup exclusion and then switched to "through a sewer" in its holding.  Different prepositions.  Arguably different meanings.  Perhaps counsel for either party will explain in a comment.  In any event, notice that the court recognized the exclusion-broadening impact of the policy's anti-concurrent causation clause, which negated coverage for loss or damage "caused directly or indirectly" by any excluded peril.