Why Don't We Ask ChatGPT?

How many of  YOU have discovered and starting playing with ChatGPT?  

For a little over a week now I've been tossing insurance- and law-related questions at this AI (and posting ChatGPT's answers to my LinkedIn account).  Here's a bunch of my Q's and ChatGPT's A's:

Direct Physical Loss

Hey ChatGPT -- How have the US courts interpreted the term "direct physical loss"?

The term "direct physical loss" has been interpreted by US courts in the context of insurance law. In the insurance industry, "direct physical loss" refers to physical damage to property, such as a building, caused by a covered peril, such as a fire, hurricane, or theft.

In interpreting the term, US courts have looked at the specific language of the insurance policy in question and the context in which the term is used. Some courts have held that "direct physical loss" requires a physical alteration of the property, such as the presence of fire or water damage. Other courts have taken a broader approach and have held that "direct physical loss" includes a loss of use or occupancy of the property, even if the property itself has not been physically altered.

In recent years, the interpretation of "direct physical loss" has become increasingly important in the context of pandemic-related business interruption claims. Some courts have held that business interruption losses caused by government-mandated shutdowns in response to the COVID-19 pandemic are covered under policies that include "direct physical loss" as a covered peril, while others have held that such losses are not covered.

The interpretation of "direct physical loss" can vary depending on the jurisdiction and the specific circumstances of each case, and it remains an evolving area of law that continues to be the subject of legal disputes and judicial decisions.

Lawyers

Hey ChatGPT -- Why do lawyers have such a bad reputation?

Lawyers have often been the subject of criticism and negativity in popular culture, and this has contributed to their negative reputation.

Some of the reasons for this reputation include:

• Stereotyping: Lawyers are often portrayed as dishonest, greedy, or unethical in movies, TV shows, and books, which has contributed to negative stereotypes about the profession.
• High costs: Legal services can be expensive, and some people may feel that lawyers take advantage of their clients by charging high fees.
• Perceived tactics: Some people may feel that lawyers engage in unethical or manipulative tactics in order to win a case, such as misrepresenting the facts or exploiting loopholes in the law.
• Complexity of the legal system: The legal system can be confusing and difficult to navigate, which can lead to negative perceptions of lawyers as individuals who benefit from this complexity.

It's important to note that not all lawyers fit these negative stereotypes, and many lawyers are dedicated and hard-working individuals who are committed to serving their clients and upholding the highest standards of ethical and professional conduct. Nevertheless, the negative reputation of the legal profession has persisted, and it is something that many lawyers and legal organizations are working to change.

Ambulance-Chasing Lawyers

Hey, #ChatGPT, why are some lawyers called "ambulance chasers"?

The term "ambulance chaser" is a pejorative slang term used to describe personal injury lawyers who are perceived as unethical and only interested in making money by seeking out clients who have been involved in accidents or incidents. The term is thought to come from the stereotype of such lawyers actively seeking out accidents and emergencies in order to solicit business from those involved.

However, it is important to note that not all personal injury lawyers engage in these types of practices and many provide valuable services to their clients. The term is a negative stereotype and should not be used to describe all personal injury lawyers or the legal profession as a whole. 

Insurance Companies

Good morning, #ChatGPT -- Why do people hate insurance companies?

People may have negative opinions about insurance companies for a variety of reasons:

• Denied claims: People may feel that insurance companies are unfair or unreasonable when they deny claims or pay out less than expected.
• Customer service issues: People may have had negative experiences with insurance companies' customer service, such as long wait times or unhelpful representatives.
• Complexity: People may find the insurance process confusing or difficult to understand, which can lead to frustration and anger.
• Premium increases: People may feel that insurance companies are taking advantage of them when their premiums increase, especially if they believe they are paying more and receiving less in return.
• Limited coverage: People may feel that their insurance coverage is inadequate, especially in the case of unexpected medical expenses or other significant costs.
• Perceived lack of empathy: People may feel that insurance companies do not understand or care about their unique circumstances, leading to a sense of distrust.

These are some of the reasons why people may dislike insurance companies. It is important to remember that insurance companies are businesses, and like any other business, they must balance their responsibilities to policyholders with the need to remain financially sustainable.

Reptile Theory

Hey, #ChatGPT -- What is the "reptile theory"?

"Reptile theory" is a term used in litigation, particularly in personal injury and insurance disputes, to describe a negotiation strategy that is based on the theory that people have a basic survival instinct, like reptiles, and will act in their self-interest to avoid danger and protect themselves.

The reptile theory posits that if the attorney can convince the jury that the defendant poses a threat to the safety and well-being of the plaintiffs and others, then the jury will instinctively respond to protect themselves and others, and be more likely to award a substantial settlement.

Proponents of the reptile theory argue that it can be a powerful tool in the courtroom, helping plaintiffs to establish a strong emotional connection with the jury and increase their chances of a favorable outcome. However, the effectiveness of the reptile theory has been questioned by some, who argue that it is manipulative and may not be supported by evidence or the facts of the case.

It is important to note that the use of reptile theory or similar tactics may not be permitted in all jurisdictions, and it is always recommended to seek the advice of a qualified attorney to determine the best approach for your specific case.

Vermin

Hey #ChatGPT -- Are raccoons vermin?

The classification of raccoons as vermin can vary depending on the context and the specific definition of the term "vermin." In some cases, the term vermin may be used to refer to any animal that is considered a pest or nuisance, which could include raccoons.

Raccoons are known to raid garbage cans, gardens, and bird feeders, which can cause damage and create a mess, leading some people to view them as a nuisance.

However, it's important to note that raccoons are also an important part of many ecosystems and have an important role to play in controlling populations of insects and small animals. Additionally, many people find raccoons to be fascinating and enjoy watching them in their natural habitat. Ultimately, whether or not raccoons are considered vermin may depend on the individual's perspective and context.

Insurance Policy Interpretation

Hey #ChatGPT -- What are the various methods of #insurance policy interpretation?

Interpreting an insurance policy can be a complex task as insurance policies are written in legal language and can be difficult to understand. The methods of insurance policy interpretation can vary depending on the jurisdiction, but there are several common approaches:

• Plain Meaning Rule: The plain meaning rule is the most common method of interpreting insurance policies. It holds that if the language of the policy is clear and unambiguous, then the words should be given their ordinary and plain meaning.
• Ejusdem Generis: This method involves interpreting general words in a policy in light of the specific words that accompany them. For example, if a policy lists specific items and then includes a general term, the general term is interpreted to include only items of the same type as those specifically listed.
• Expressio Unius: This method involves interpreting a policy by looking at what is expressly included, and what is expressly excluded. For example, if a policy specifically lists certain types of damages that are covered, and then lists other types of damages that are excluded, then any damages that are not mentioned would be subject to interpretation.
• Contra Proferentem: This method involves interpreting a policy against the party who drafted it, as described in my previous answer. Any ambiguities in the policy are resolved against the insurer, who is presumed to have had greater control over the language used in the policy.
• Maxims of Construction: These are general principles of law that are used to interpret contracts, including insurance policies. Maxims of construction are used to resolve any ambiguities or uncertainties in a policy by considering the purpose of the policy, the intent of the parties, and any other relevant factors.

It is important to note that the methods of insurance policy interpretation can vary depending on the specific policy and the jurisdiction in which the policy is being interpreted. In some cases, courts may use a combination of these methods to interpret a policy.

⚠ NEW YORK COVID-19 #BUSINESSINTERRUPTION CASE UPDATE ⚠

The "score" in New York on COVID-19 #businessinterruption coverage lawsuits, where "direct physical loss" or "direct physical damage" was at issue, now stands at 23-0 for insurers (18 federal, 5 state).

Since my last update, here are the four recent decisions: 

• Office Solution Group, LLC v. National Fire Ins. Co. of Hartford, No. 20-cv-04736-GHW (S.D.N.Y. June 11, 2021)

Manhattan-based policyholder in the business of office project management and furniture installation, sued its commercial property insurer for business income and civil authority coverage for losses allegedly stemming from its March 2020 forced closure during COVID-19.  The policy's business interruption coverages required “direct physical loss of or damage to property” and the policy included a “Microbe Exclusion” that included viruses. 

In GRANTING the insurer's motion to dismiss the complaint, with prejudice, the court ruled:

Critically, Plaintiff’s argument also fails to consider the extensive case law that has developed in New York on this exact issue over the past year, which provides that loss of use caused by the COVID-19 pandemic is not physical damage. Unfortunately, Plaintiff is only one of numerous businesses that suffered immense income loss after shutting its doors during the pandemic. Many of those other businesses have brought materially identical actions in New York seeking business impact coverage from their insurance providers. New York courts have consistently maintained that “direct physical loss of or damage” language requires physical damage to invoke coverage, and that loss of use due to the pandemic does not constitute physical damage when the covered property was physically unharmed by the virus. * * *

As in the many analogous cases that have been brought in New York courts over the past year, the Court concludes here that the plain meaning of “direct physical loss or damage” unambiguously requires physical damage to the covered property to invoke coverage and that loss of usage does not rise to the level of physical damage. Plaintiff has failed to allege such loss or damage occurred, given that Plaintiff’s office remained physically intact and unharmed throughout its closure, other than having its doors closed to the public. Accordingly, Plaintiff is not entitled to coverage under the Business Property Coverage terms of the Policy. * * *

The language of the Policy is unambiguous and bars Plaintiff from coverage. The Business Property Coverage terms of the Policy cover direct physical damage or loss, and the Civil Authority Coverage terms of the Policy cover losses when civil authorities prohibit entrance onto the covered property due to direct physical damage to neighboring properties. Plaintiff has failed to allege that either of those occurred, and instead only alleges loss of use and limited access to the covered property due to the threat of COVID-19. Furthermore, Plaintiff is not entitled to coverage because the Policy’s Microbe Exclusion explicitly excludes coverage for damages caused by "any virus," which includes the COVID-19 virus. 

• Buffalo Xerographix, Inc. v. Sentinel Ins. Co., No. 20-cv-00520-GWC (W.D.N.Y. June 16, 2021)

Plaintiffs, an office equipment supplier and a dental practice, sued their commercial property insurers for business interruption coverage for losses allegedly stemming from their March 2020 forced closure during COVID-19.  The policies' business interruption coverages required “direct physical loss of or damage to property”, but did not contain a virus exclusion.

In GRANTING the insurers' motion for judgment on the pleadings (post-answer motion to dismiss), the court ruled:

Plaintiffs' policies provide coverage for business interruptions caused by "direct physical loss or damage" to their insured premises or due to orders of a civil authority issued in response to  direct physical loss or damage" to nearby property that restricted Plaintiffs' access to their premises. Plaintiffs argue that they suffered covered losses because the presence of the coronavirus at or  near the insured premises constitutes "direct physical loss of or physical damage."

To make this argument, Plaintiffs point to the existence of the so-called "Virus Exclusion" and the "Virus Limitation": standard fmm endorsements developed by the ISO that exclude or limit an insured's otherwise available coverage when the conditions of the endorsement are met. * * * Plaintiffs argue that this omission constitutes an "express acknowledgement by [Defendants] that a virus is capable of causing 'direct physical loss of or damage to' property." (Doc. 78 at 18.)  from this assertion, Plaintiffs jump to the conclusion that the presence of the coronavirus constitutes direct physical loss or damage.

However, Plaintiffs' reliance on the Virus Exclusion and Virus Limitation is misplaced. Regardless of whether a virus could cause direct physical loss of or damage to property, Plaintiffs do not plausibly allege that the coronavirus caused direct physical loss or damage to their premises or property in the vicinity of their premises. The Virus Exclusion and Virus Limitation operate by limiting or excluding coverage that would otherwise be available under an insured's policy; that is, they limit rather than expand coverage. Consequently, the endorsement becomes relevant only if an insured experiences an otherwise "covered loss." In that case, the Virus Exclusion or the Virus Limitation would limit the insured's recovery for the otherwise covered loss. In Plaintiffs' case, however, the omission of the Virus Exclusion and the Virus Limitation from Plaintiffs' policies is irrelevant because Plaintiffs have not plausibly alleged that they suffered "direct physical loss or damage" to their property.

Many courts applying New York law, including this one, have already concluded that business closures due to the presence of the coronavirus or due to New York State executive orders do not constitute "direct physical loss of or damage to" property. See Kim-Chee LLC v. Phil. Indem. Ins. Co., No. 1:20-cv-1136, 2021 WL 1600831, at *5 (W.D.N.Y. April 23, 2021); id. at *3 ( citing cases applying New York law). Relying on longstanding New York precedent, these courts have ruled that the phrase "direct physical loss or damage" is unambiguous and requires physical alteration of property. Kim-Chee, 2021 WL 1600831, at *4 (applying Roundabout Theatre Co., 751 N.Y.S.2d at 8).

The presence of the coronavirus does not physically alter property in a permanent manner. In this respect, the virus is different from other physical or chemical contaminants that have been found to cause "direct physical loss or damage" to property. Id. at *5 (citing gasoline seepage, lead contamination, exposed asbestos, pervasive odor, and chemical or bacterial contamination as examples of"[c]ontamination of a structure that seriously impairs or destroys its function," thereby "qualify[ing] as direct physical loss"). Instead, the coronavirus poses a temporary health hazard to the occupants of a building, whose threat to human health dissipates with the passage of time. Many courts, including this one, have determined that merely temporary contamination does not qualify as "direct physical loss or damage." Id. (citing dust from road construction, mold or bacteria that could be eliminated by cleaning, and the controlled presence of asbestos as examples of such "short-lived contamination). * * *

In this case, the alleged presence of the coronavirus has not caused a permanent change to Plaintiffs' properties or decreased the value and function of those properties. Instead, New York State executive orders issued in response to the coronavirus temporarily deprived Plaintiffs of the ability to use their properties for their intended purpose. Because Plaintiffs have not plausibly alleged that the presence of the coronavirus caused "direct physical loss of or damage to" their insured premises or nearby property, Plaintiffs cannot state a claim for breach of contract under either their business interruption coverage or civil authority coverage. Insuring Defendants are therefore entitled to judgment on the pleadings on Plaintiffs' breach of contract claim.

The court also granted judgment on the pleadings dismissing plaintiffs' New York General Business Law § 349 cause of action, holding that that plaintiffs cannot "establish that they  suffered injury as a result of' the defendants' conduct-as required to state a claim under N.Y. Gen. Bus. Law§ 349-because they did not plausibly allege "direct physical loss of or damage to" their insured property.

•  THill 13014, LLC v. Finger Lakes Fire & Cas. Co., No. 800744-2021 (Sup. Ct., Erie Co., June 17, 2021) 

Plaintiffs, self-storage facilities, sued their commercial property insurer for business interruption coverage for losses allegedly stemming from their March 2020 forced closure during COVID-19.  The policies' business interruption coverages required “direct physical loss" of property, but did not contain a virus exclusion.

In GRANTING the insurer's motion to dismiss plaintiffs' complaint, the New York State Supreme Court, Erie County, held:

The Court agrees with Defendant that there are no facts, only conclusions, to support Plaintiffs' claims. As such, the Court finds that Plaintiffs have failed to meet their burden and that dismissal is required. The complaint is void of any evidence to support the bald conclusion that the coronavirus caused an actual covered loss (physical or otherwise) under the subject policies. * * * Here, the subject policy language is specific, clear, and unambiguous. The insurance company covers losses "directly resulting from interruption of your business operations because of a business property loss insured under this policy." Mura Affirmation at ¶ 13. "Physical loss" and "business property'' are not ambiguous terms. Those are the terms included in the Policy and the Court will not now, as noted above, "rewrite the contract or impose additional terms which the parties failed to insert." Supra.

The court also dismissed the complaint’s New York General Business Law § 349 deceptive acts and practices cause of action, holding that “[t]he case before this Court likewise stems from a private dispute outside the ambit of §349 of the General Business Law.” 

• Broadway 104, LLC v. XL Insurance Amer., No. 20-cv-03813-PKC (S.D.N.Y. Jun. 23, 2021)

Plaintiff, a Manhattan restaurant, sued its commercial property insurer for business interruption coverage for losses allegedly stemming from its March 2020 forced closure during COVID-19.  The policy's business interruption coverages required “direct physical loss of or damage to  property" and did contain a virus exclusion.

In GRANTING the insurer's motion to dismiss with prejudice; the court held:

The Complaint does not allege that the Café suffered a ‘direct physical loss’ of property that would provide for business interruption coverage under the Policy….The Complaint does not plausibly allege the Café suffered a loss covered under the Civil Authority Provision….The Court concludes that the Virus Exclusion is unambiguous and excludes the coverage sought by the Café.

For an updated listing of all 23 New York COVID-19 #businessinterruption cases decided to date, click the image below.  

 

The Key to Winning COVID-19 Business Interruption Lawsuits?

I was interviewed last Friday and quoted this morning in Jim Sams' article for the Claims Journal, entitled "The Key to Winning COVID Business-Interruption Claims: Say the Virus is Present".

Sandwiched between two policyholder attorneys, I made some points and said some words on the subject of the developing and refined strategies of policyholder attorneys to keep their clients' COVID-19 business interruption lawsuits from being dismissed on pre-answer dispositive motions.  

I said when I posted that article to LinkedIn that I'm still trying to get my head around policyholder attorney Chip Merlin's "absurd" argument. 

Absurd for policyholder attorneys to allege presence of the virus, or for insurer's to require that policyholders prove it? Listen for yourself and please tell me if you understand Chip's argument.

Then be sure to read my comment to the Claims Journal article.  

What do you think?  Is alleging presence of the virus on property "the key"?  I know of some federal judges who don't think so. 

COVID-19 Business Interruption Analytics -- Metrics for Six Dozen Litigation Rulings (To Date)

 It was in mid-April that I got the call.  I was being drafted to a team of attorneys from over a dozen jurisdictions to defend one of my insurer clients in what was expected to be an incoming tsunami of COVID-19 business interruption lawsuits.  For a seasoned insurance coverage attorney like me, this was my most recent call-up to The Bigs.  The Show.  The reason I spent all those formative coverage attorney years parsing sentences and hunting for the elusive Oxford comma.   

Now seven months and three, fully briefed, pre-answer motions to dismiss (actually four--moved twice in one case) later, I could tell you everything you never wanted to know about the meaning of DPLOODT (direct physical loss of or damage to) property, "loss" and "damage", "of" and "to", and whether a virus is alive or dead or neither and why it might matter to a policyholder's business interruption claim.

But not in this post.  Instead, I'll skip to and share with you the "scorecard" of sorts I've developed for cataloging and tracking the 72 COVID-19 business interruption ("BI" to the cool, commercial property kids) court rulings to date:

Now, if you had been following me all along on LinkedIn, you would already have these metrics.  I've lost count how many times since April I've used the #businessinterrution and #covidBIlitigation hashtags on my LinkedIn posts (but you can count them if you want, in no particular and discernable order, by clicking here).  

I know you're wondering how I keep all these stats or metrics, right?  Easy (not really).  Thank Microsoft and the sortability (not a real word) of the excellent Excel spreadsheet.  Et voilà:

The image above clicks to its PDF source, but for the real spreadsheet geeks who know what insights custom sorting can reveal, I offer you the sortable Excel spreadsheet, itself.  All case rulings are clickable through to PDF documents residing in my Dropbox folder.  If you want updated versions of the rulings metrics and spreadsheet, follow me on LinkedIn and watch for my weekly postings.  

Please feel free to share the rulings metrics, sortable spreadsheet and Dropbox folder link with whomever might find them interesting and useful.  

And stay safe and well, everyone.  

*** COVID-19 BI LITIGATION RULINGS BY THE NUMBERS *** (through Oct. 29, 2020)

I have seen a "scorecard that, together with the cases that I and others on LinkedIn have reported, tallies the COVID-19 business interruption rulings to date as 35-13 in favor of insurers. 

>>  The FEDERAL/STATE COURT SPLT split is 33-15. 

>> The FEDERAL COURT SCORE is 29-4 for insurers. 3 of the 4 rulings favoring policyholders are from the same judge. 

>> The STATE COURT SCORE is 9-6 in favor of policyholders. 2 of the 6 rulings favoring insurers are from the same judge. 

>> Of the 13 TOTAL DECISIONS FAVORING POLICYHOLDERS, only 4 are from federal court and 9 are from state court. 3 of the 4 federal court ruling favoring policyholders are from the same judge. 

>> 28 DIFFERENT FEDERAL JUDGES have ruled on motions -- 26 in favor of insurers and 2 in favor of policyholders. 

>> 14 DIFFERENT STATE COURT JUDGES have ruled on motions – 5 in favor of insurers and 9 in favor of policyholders. 

>> The AVERAGE LENGTH of the STATE COURT rulings FAVORING POLICYHOLDERS is 1.88 pages. 

>> The AVERAGE LENGTH of ALL FEDERAL COURT rulings is 11.37 pages.

What's it all about, Alfie?

The Jenner Complaint

It's been dubbed "the Jenner complaint" and, last I knew, has been filed in Illinois and New York state courts. It's an evolved or mutated variant of predecessor COVID-19 BI policyholder complaints, embedding a table of contents, photos, floor plans and seating charts in its hundreds of pages in support of these policyholders' core argument that impairment or loss of function or functionality equals direct physical loss or damage.

Interested persons can follow the New York state court action's docket by clicking here.

#businessinterruptioninsurance #COVID19businessinterruptionlitigation

DC Court Grants Summary Judgment to Commercial Property Insurer on COVID-19 Business Interruption Claim

* * * SPECIAL ALERT * * *

This afternoon the Superior Court of the District of Columbia granted summary judgment to Erie Insurance Exchange, dismissing plaintiffs' complaint for COVID-19-related business income/ interruption losses.

The court concluded: 

With both dictionary definitions and the weight of case law supporting Defendant’s interpretation of the term "direct physical loss," Plaintiffs’ additional arguments are unconvincing. First, Plaintiffs argue that because the insurance contract has specific exclusions for "loss of use" under some coverage lines but not for Income Protection coverage, the Court should infer that the Income Protection coverage covers losses such as Plaintiffs’. Plaintiffs' Motion at 13-14. But as already discussed, even if “loss of use” was covered, Plaintiffs would still have to show that the loss of use was a "direct physical loss” similar to those in the cases discussed supra at 5-7. And for the reasons explained in this order, there was no “direct physical loss” to Plaintiffs.  Second, Plaintiffs argue that, unlike some similar insurance policies, their policies do not include a specific exclusion for pandemic-related losses. Id. at 19-20. But again, even in the absence of such an exclusion, Plaintiffs would still be required to show a 'direct physical loss.' Because they cannot do so, the Court grants summary judgment to Defendant.

The case is Rose's 1, LLC et al. v. Erie Insurance Exchange and you can read the court's decision and order by clicking here. 

Things That Go Boom -- Court Affirms Coverage for Loss Due to Contaminants Released Into Atmosphere by Explosion at Nearby Chemical Plant

PROPERTY – CONTAMINATION – "DIRECT PHYSICAL LOSS" – EXPLOSION – "WEAR AND TEAR" EXCLUSION
Trupo v. Preferred Mut. Ins. Co.
(4th Dept., decided 2/6/2009)

On January 5, 2002, the Diaz Chemical Corporation facility in the Village of Holley, Orleans County, New York, accidentally released a mixture consisting primarily of toluene, water (steam), and 2-chloro-6-fluorophenol (CFP) into outdoor air. Soon after the chemical release, residents of nearby homes complained of acute health effects such as sore throats, headaches, eye irritation, nosebleeds, and skin rashes.

The "release" occurred when a pressure build-up in heated storage vessel at the Diaz facility caused a pressure disc to rupture. The rupture resulted in a chemical discharge that visibly contaminated surfaces in the nearby neighborhood and produced odors that were reported as far as 12 miles away. According to Diaz, approximately 80 gallons of liquid were released. The mixture was reported to be mostly water (in the form of steam), toluene, and CFP. Droplets of CFP deposited on cars, houses, and other surfaces to the east-northeast of Diaz. On January 6 and 7, fifteen to twenty families voluntarily relocated with assistance from Diaz.

Many if not all of these families made first-party property coverage claims to their homeowners insurers. The Trupos were one such family. They claimed that their home and contents were damaged by the explosion and release of CFP, a contaminant. Many of the insurers to which those claims were submitted, including Preferred Mutual Insurance Company, denied coverage based on a variety of reasons. Preferred Mutual's reasons included that there was no direct physical loss from a covered peril, including explosion, and the policy's "Wear and Tear" exclusion, which negated coverage for, among other things, loss that resulted from contamination.

In AFFIRMING the motion court's denial of Preferred Mutual's motion and granting of the plaintiffs' cross motion for summary judgment, the three-justice majority (Centra, Green and Gorski) of the Fourth Department ruled that an explosion was the cause of the damage to plaintiffs' property and the policy's wear and tear exclusion was ambiguous and did not apply:

The policy issued by defendant provided coverage for "direct physical loss" caused by certain perils, including explosion. We agree with plaintiffs that the incident at the chemical plant constitutes an explosion under the policy and that the alleged contamination of their home was caused by that explosion. We further agree with plaintiffs that the exclusion relied upon by defendant, entitled "Wear and Tear," does not apply to this case. Pursuant to that exclusion, defendant would "not pay for loss which results from wear and tear, marring, deterioration, inherent vice, latent defect, mechanical breakdown, rust, wet or dry rot, corrosion, mold, contamination or smog" (emphasis added). We reject defendant's contention that, because the damage to plaintiffs' home arises out of pollution or contamination, the exclusion for "Wear and Tear" applies. Rather, we conclude that the exclusion in question is ambiguous and thus should be construed in favor of plaintiffs, the insureds (see generally White v Continental Cas. Co., 9 NY3d 264, 267; Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383). The title "Wear and Tear" would lead an average person to believe that the exclusion for "contamination" therein included only contamination that occurred over time, rather than a sudden occurrence such as the incident here.

The two-justice dissent (Scudder and Pine), while agreeing that the chemical plant incident constituted an "explosion" under the policy and that the alleged contamination of plaintiffs' home was caused by that explosion, disagreed that the policy's wear and tear exclusion was ambiguous and did not apply to negate coverage.  "Plaintiffs suffered a loss from contamination, and the policy specifically excludes loss resulting from contamination. '[U]nambiguous provisions of an insurance contract must be given their plain and ordinary meaning[.]'"  The dissent also disagreed with the majority that the "Wear and Tear" title of the exclusion rendered it ambiguous:

The majority focuses on the title of the paragraph containing the exclusion in question and concludes that it would lead an average person to believe that the exclusion for contamination was only for contamination that occurred over time. We disagree. Rather, we apply the principle of statutory construction that titles are given little weight. "The title of a statute may be resorted to . . . only in case of ambiguity in meaning, and it may not alter or limit the effect of unambiguous language in the body of the statute itself" (McKinney's Cons Laws of NY, Book 1, Statutes § 123 [a]). Inasmuch as the language in the exclusion in question is unambiguous and does not limit the exclusion to contamination that occurs over time, we decline to add such limiting language.

The majority also affirmed the motion court's decision denying that part of plaintiffs' cross motion for damages in the amount of approximately $144,000, and instead ordering a hearing on damages.