Wednesday, April 5, 2023

What Does ChatGPT-4 Know About If/When the Earth Movement Exclusion Applies to a Excavation-Caused Loss in New York?


Hey ChatGPT-4, 

Under New York law, does the earth movement exclusion of a homeowners insurance policy apply to damage caused by underground vibrations from excavation work on an adjacent piece of property?

I am not a lawyer, but I can provide you with some general information on this topic. Under New York law, the earth movement exclusion in a homeowner's insurance policy typically refers to damage caused by natural events like earthquakes, landslides, or soil settlement. However, the specific language of the exclusion in the policy may vary between insurance companies and individual policies.

In the case of damage caused by underground vibrations from excavation and construction work on an adjacent piece of property, the earth movement exclusion may or may not apply, depending on the specific language of the policy. If the policy language is broad enough to include man-made causes of earth movement, it may potentially exclude coverage for such damage.

However, even if the earth movement exclusion applies, the homeowner might still have other avenues for seeking compensation for the damage, such as pursuing a claim against the construction company or the owner of the adjacent property under a theory of negligence or nuisance.

In any case, it is essential to consult with a qualified attorney familiar with New York insurance law to review the specific policy language and circumstances and provide legal advice tailored to the situation.

Thanks, ChatGPT.  I am a lawyer and a qualified one in the area of New York property insurance coverage law at that.  That's a pretty accurate answer, my new chatbot friend.  Like adult diapers, whether the earth movement exclusion applies to negate coverage for damage or loss caused by off-premises excavation work depends.  On the language of the exclusion.  

Prior to 2010, most earth movement exclusions referred only to natural causes such as earthquakes, landslides, mudslides, sinkholes, and the like.  In Pioneer Tower Owners Assn. v State Farm Fire & Cas. Co. (12 NY3d 302 [2009]), the New York Court of Appeals (yes, that's our highest state appellate court in New York, ChatGBT-4) held that an "earth movement" exclusion in an insurance policy that referred only to natural events or causes of the earth movement did not unambiguously apply to excavation-caused damage or loss.

In 2012, however, in Bentoria, Inc. v. Travelers Indem. Co. (956 NY2d 456 [2012]), the New York Court of Appeals revisited the question, "confront[ing] a policy in which a similar exclusion is expressly made applicable to 'man made' movement of earth."   In that case, the Court held that the added "man-made" language eliminated the ambiguity, and that loss caused by excavation is not covered under policies containing the broadened earth movement exclusion.  

More recently, the Appellate Division, First Department, in 3502 Partners LLC v. Great American Ins. Co. (204 AD3d 525 [1st Dept 2022]) , citing Bentoria, AFFIRMED Supreme Court's order granting the insurer's pre-answer CPLR 3211(a)(1) motion to dismiss the complaint based on documentary evidence, holding:
The documentary evidence conclusively establishes a defense to plaintiff's claims (CPLR 3211[a][1]; Leon v Martinez, 84 NY2d 83, 87-88 [1994]). The complaint alleges that plaintiff's property sustained damage "as a direct result of the excavation work at the [a]djacent [l]ot." The insurance policy issued by defendant contains an exclusion from coverage for "earth movement," e.g., "earth sinking (other than sinkhole collapse), rising or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty," and states that the exclusion applies "regardless of whether [the earth movement] is caused by an act of nature, man-made or is otherwise caused." Taken as true, the allegations in the complaint place the damage to plaintiff's property within the earth movement exclusion (see Bentoria Holdings, Inc. v Travelers Indem. Co., 20 NY3d 65, 68 [2012]).

Contrary to plaintiff's contention, the complaint did not have to use the words, "earth movement," for the exclusion to apply, given that an excavation is "the intentional removal of earth by humans" (see id.). Nor does the allegation that the damage to its property resulted from "the vibrations caused by the construction work," made for the first time in an affidavit in opposition to defendants' motion, avail plaintiff, as no separate damage has been alleged (see Jones v State Farm Fire & Cas. Co., 189 AD3d 1565, 1567 [2d Dept 2020] [insurance company did not dispute that property damage solely caused by vibrations from the backhoe was covered under the policy]).

Even if vibrations caused the damage, the excavation was still a contributing cause of the damage, and the policy states that there will be no coverage for loss or damage caused directly or indirectly by earth movement "regardless of any other cause or event that contributes concurrently or in any sequence to the loss" (see Sheehan v State Farm Fire & Cas. Co., 239 AD2d 486, 487 [2d Dept 1997]; Kula v State Farm Fire & Cas. Co., 212 AD2d 16 [4th Dept 1995], lv dismissed in part and denied in part 87 NY2d 953 [1996]).
Now can you explain to this blog's readers the anti-concurrent causation clause? 😜

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