In January, the Southern District rejected an insured’s $2 million claim for a generator destroyed by Superstorm Sandy. The unit was in the basement of an office building in lower Manhattan, but the contract of insurance defined “covered location” to mean the 33rd floor of the structure. The district court rejected the policyholder’s argument that language insuring personal property “in buildings or structures at a ‘covered location’ “ extended coverage to the entire building including its basement. On October 16th, a panel of the Court of Appeals affirmed this carrier-friendly interpretation in Jane Street Holding, LLC v. Aspen American Ins. Co., — Fed.Appx. –, 2014 WL 5287051, 2014 U.S. App. LEXIS 19905 (2d. Cir., Oct. 16, 2014). Jane Street Holding,…
Blog Archives
Second Circuit Affirms a Southern District Decision Construing “Covered Location” Narrowly
Posted in Flood, Insured Premises, Superstorm Sandy, Water
Sixth Circuit Holds That Declines in Market Value are Not a Factor in Determining Actual Cash Value
In a case of first impression in Michigan, the federal Court of Appeals determined last month that general market conditions could not be considered when calculating actual cash value. In Whitehouse Condominium Group, LLC v. Cincinnati Ins. Co., — Fed.Appx. —, 2014 WL 2743480 (6th Cir., June 17, 2014), the contract of insurance defined ACV as replacement cost less a number of factors including “obsolescence .” The Sixth Circuit held that the word connoted only functional obsolescence as opposed to both functional and economic obsolescence. The policyholder owned a condominium building in Flint, Michigan that was heavily damaged by fire in November of 2010. The policy afforded coverage for ACV, which was defined in the contract of insurance to mean…
Posted in Actual Cash Value, Depreciation, Fire, Loss Adjustment
New York Court: All Sandy Losses, Including “Downstream” Financial Ones, Capped By Annual Aggregate Limit For Flood
Superstorm Sandy jurisprudence is starting to shed light on some unresolved issues in the effected states. In El-Ad 250 West LLC v. Zurich American Ins. Co., — N.Y.S.2d —, 2014 WL 2931058 (N.Y.Cty., June 27, 2014), a New York court held last week that a $5 million annual aggregate limit of liability for losses caused by flood capped any recovery for all such loss, without regard to whether it was physical damage to property or a “downstream” financial loss such as delay in completion. It was a case of first impression in New York. On October 29, 2012, the policyholder, El-Ad 250 West LLC, was converting an 11-story office building into a 12-story luxury condominium complex in lower Manhattan. Superstorm…
New York Holds Water Which Backs Up Is Covered If It Originated On The Insured Premises
Last week, in Pichel v. Dryden Mutual Ins. Co., — N.Y.S. 2d —, 2014 WL 1923736 (May 15, 2014), an intermediate level appellate panel in New York brought the state into line with the interpretation of water backup adopted by a number of other jurisdictions. The decision held that policy references to a “plumbing system” mean the plumbing system on the insured premises itself. As a result, a loss caused by water which backs up through sewers and drains is covered if the overflow originated within the insured’s property but excluded if the backup originated off site, as from a clogged municipal sewer system for example. The policyholder owned an apartment complex that was insured by Dryden Mutual. The structure…
A New York Court Bars Coverage for a Power Outage Caused by Superstorm Sandy
This week saw a New York court bar a policyholder’s claim for business interruption occasioned by the loss of off-site power after Superstorm Sandy. In Johnson Gallagher Magliery, LLC v. Charter Oak Fire Ins. Co., 2014 WL 1041831 (S.D.N.Y., March 18, 2014), the federal court held that a law firm could not recover for the six-day period during which one of Consolidated Edison’s networks was out-of-service. The network was shut down preemptively several hours before the storm, and the contract of insurance’s “acts or decisions” exclusion was held to bar coverage for that period of time. In addition, a “water” exclusion operated to preclude coverage for the time necessary to clean, repair, and re-energize the system after the flooding where…
Posted in Acts or Decisions, Business Interuption, Direct Physical Loss or Damage, Flood, Superstorm Sandy
Federal Courts In New York and New Jersey Explore Streamlining Superstorm Sandy Discovery
Despite opposition by both many attorneys and the Federal Emergency Management Agency (“FEMA”), the federal court for the Eastern District of New York has now taken the first steps towards grouping some of the hundreds of pending Superstorm Sandy cases and expediting discovery in all of the them, and the District of New Jersey appears very likely to follow suit. Superstorm Sandy is now officially the second most costly storm in United States history, having caused over $50 billion in damages, and one of the most heavily-impacted jurisdictions was the United States District Court for the Eastern District of New York. The Eastern District comprises Staten Island and all of Long Island, including the New York City boroughs of Brooklyn…
New York’s Highest Court Holds a Two-Year Suit Limitation Provision Can Be Unenforceable
In answer to a question certified by the Second Circuit, New York Court of Appeals has held that a two-year suit limitation provision in a property insurance policy – which the court acknowledged was not an “inherently unreasonable” provision – was unenforceable under the factual circumstances of the case before it. Executive Plaza, LLC v. Peerless Ins. Co., — N.Y.3d –, 2014 WL 551251, 2014 N.Y. LEXIS 165 (N.Y. Feb. 13, 2014). In doing so, the court held for the first time that such a limitation period may be rendered unreasonable by what it called an inappropriate accrual date. Peerless Insurance Company issued a $1 million fire insurance policy to Executive Plaza. This gave Executive the choice to select payment…
