Property damage – water exclusion applies
180 Lafayette Corp. v. Wesco Ins. Co., et al., 2021 NY Slip Op 30230(U), 2021 WL 256631 (Sup. Ct., New York Co. Jan. 26, 2021)
This case involved an insurance claim for property damage following water damage to plaintiff’s insured building that was caused by a toilet overflow. Wesco denied coverage based on an exclusion in the insurance policy for “[w]ater that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment.” In the ensuing litigation, Wesco moved for summary judgment on the basis that the water exclusion precluded coverage for the plaintiff’s property damage claim. Wesco also moved to dismiss the contribution and indemnification claims of co-defendant Jordan Barrett on the basis that there was no privity of contract between Wesco and Barrett.
By Decision dated January 26, 2021, Judge W. Franc Perry of the Supreme Court, New York County, found that the loss caused by the malfunctioning toilet, which resulted in water overflowing and damaging the insured premises, was excluded by virtue of the water exclusion.
The decision is significant inasmuch as the court concluded that the particular provision of the water exclusion, which precludes coverage for water that overflows from equipment related to sump pumps and drains, applies to a toilet overflow. The court also concluded that Pichel v. Dryden Mut. Ins. Co., 965 N.Y.S.2d 342, 117 A.D.3d 1267 (3rd Dep’t 2014), a case relied upon by plaintiff, was inapplicable because the exclusion in that case for “accidental leakage, overflow or discharge of liquids or steam from a plumbing system” on which that court relied to find an ambiguity with the water exclusion was not present in the 180 Lafayette Corp. case. Finally, the court dismissed Barrett’s claims against Wesco on the basis that Wesco owed no duty to him that would support a claim for contribution and indemnification.
The decision can be read here.