Wind or Water? -- A Superstorm Sandy Loss

HOMEOWNERS – PROPERTY – FLOOD – WATER DAMAGE EXCLUSION – WIND – ANTI-CONCURRENT CAUSATION CLAUSE    
Clarke v. Travco Ins. Co.
(S.D.N.Y., decided 8/7/2015)

During Superstorm Sandy, water flooded the lower level of the plaintiff's house to a height of approximately four feet.  Further, a wooden dock from another property, approximately fifteen feet by ten feet in size, entered the property and came to rest within the lower level of the house, causing damage to the house.  Plaintiff asserted that the dock was pushed into the property by wind, causing significant structural damage, while defendant Travco Insurance Company argued that the dock was transported by water.

Plaintiff's policy with Travco contained the following exclusion:

1.  We do not cover any direct or indirect loss or damage caused by, resulting from, contributing to or aggravated by any of these excluded perils. Loss from any of these perils is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. 

These exclusions apply whether or not the loss event:

(a) Results in widespread damage;
(b) Affects a substantial area; or
(c) Occurs gradually or suddenly.

These exclusions also apply whether or not the loss event arises from:

(a) Any acts of nature;
(b) Any human action or inaction;
(c) The forces of animals, plants or other living or dead organisms; or
(d) Any other natural or artificial process.

* * *

c. Water Damage, meaning:

(1) Flood, surface water, ground water, storm surge, waves, wave wash, tidal water, tsunami, seiche, overflow of a body of water, or spray from any of these, whether or not a result of precipitation or driven by wind;

(2) any water or water borne material that enters through or backs up from a sewer or drain, or which overflows from a sump, sump pump or related equipment, as a direct or indirect result of flood;

(3) any water or water borne material located below the surface of the ground including water or water borne material:

1. Which exerts pressure on, seeps, leaks or flows into:

a. Any part of the dwelling or other structures;
b. The foundation of the dwelling or other structures;
c. Any paved surface located on the "residence premises"; or
d. Any spa, hot tub, or swimming pool.

2. Which causes earth movement; or

(4) any overflow, release, migration or discharge of water in any manner from a dam, levee, dike, hurricane barrier or any water or flood control device.

Direct loss by fire, explosion or theft resulting from water damage will be covered.

After discovery was complete, Travco moved for summary judgment.  In GRANTING that motion and dismissing plaintiff's complaint, the District Court for the Southern District of New York first ruled that the report and testimony of plaintiff's professional engineer was inadmissible as expert testimony because his conclusion that the dock was wind-driven was "based on data, a methodology, or studies that are simply inadequate to support the conclusions reached." Secondly, after outlining the insurance policy interpretation principles that are used in New York, the District Court concluded that "[i]t is clear, by the plain and unambiguous language of the policy, that the damage does fall within the [water damage] exclusion, and therefore Plaintiff cannot prevail on his claim":

The facts of this case are essentially undisputed. A dock, floating on top of water, was pushed by wind into the lower level of Plaintiff's house, causing damage to the Property. Plaintiff seeks to differentiate damage to the Property caused by dock from damage caused by flood waters and avers that the damage done by the dock was caused solely by wind and therefore falls outside the provision excluding water damage from coverage under the Policy. (See Pl.'s Opp'n at 3, 4-5.) The Court is skeptical that this sort of differentiation is truly possible or supported by the record before it but, even if it is, the distinction does not defeat the provision of the Policy excluding coverage for water damage. 

The exclusion provision sets forth that the Policy does not cover "any direct or indirect loss or damage caused by, resulting from, contributing to or aggravated by any of these excluded perils." (Sipple Decl. Ex. B at TP 000010 (emphasis added).) The Policy then goes on to include an anti-concurrent causation clause which states that "[l]oss from any of these perils is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss." (Id. (emphasis added).) One of the "excluded perils" in the Policy is "Water Damage," which is defined in part as "flood, surface water, ground water, storm surge, waves, wave wash, tidal water, tsunami, seiche, overflow of a body of water, or spray from any of these, whether or not a result of precipitation or driven by wind." (Id. at TP 000011 (emphasis added).) These terms have a definite and precise meaning when read within the context of the agreement as a whole, in particular when read in conjunction with the various clauses regarding exclusions from the Policy. There is no ambiguity in the relevant portions of the Policy. 

The Policy unambiguously excludes any damage "caused by" or "aggravated by" the types of water described in the exclusion provision, regardless of any other contributing causes and whether or not it was "driven by wind." While it appears possible that the dock may have been driven into the Property by wind, as Plaintiff asserts, it is clear from the record that the dock was driven into the house because it had been floating on, and was also driven by, water. (Aboulafia Decl. Ex. 4 (Transcript of Deposition of Peter Svoboda, October 2, 2014 ("Svoboda Dep.")) at 80:20-81:14.) Even Costa—whose testimony was proffered by Plaintiff to rebut the claim that the damage involved water, as opposed to wind—testified to this in his deposition: 

Q: As you sit here today, based on what you observed is it your belief that this dock was actually lifted up into the air and blown into the house, or that it was pushed by the wind on top of water into the house?. . . .

A: Pushed on top of the water into the house. 

(Costa Dep. at 42:9-17; see also id. at 41:17-21, 45:9-46:9.) There is no dispute that water was involved in the dock's movement. Even if wind were the main cause, it is indisputable that the water upon which the dock was resting at least indirectly caused or aggravated the damage to Plaintiff's property. Further, the language of the anti-concurrent causation clause means that "where a loss results from multiple contributing causes, coverage is excluded if the insurer can demonstrate that any of the concurrent or contributing causes are excluded by the policy." ABI Asset Corp. v. Twin City Fire Ins. Co., No. 96-CV-2067 (AGS), 1997 WL 724568, at *2 (S.D.N.Y. Nov. 19, 1997) (emphasis in original). Ultimately, it is clear that even if wind was a contributing cause and/or the dock was in some way "driven by wind," the exclusion still applies and thus bars Plaintiff from recovering under the Policy for the damage to his property. 

Plaintiff has failed to identify any genuinely disputed issues of material fact as to whether the policy exclusion applies in this matter, which is the crux of the Plaintiff's entire claim. The unambiguous language of the policy exclusion for water damage clearly excludes the damage caused to Plaintiff's property as a matter of law, and a reasonable jury could not return a verdict in Plaintiff's favor. Thus, Defendant's motion for summary judgment is granted.

Water.  No coverage.