Bronx 13 Properties LLC v. Wesco Ins. Co., Index No. 161411/2015 (New York Co. Sup. Ct. Apr. 4, 2019)

In this case the insured landlord sought coverage for the collapse of a bathroom floor that allegedly caused damage to several other floors of an apartment building. The specific provision invoked was the policy’s “Additional Coverage Collapse,” which required an abrupt falling down of a part of a building such that it could not be occupied for its intended purposes. The collapse must have been caused by one of a limited number of perils, including decay that is hidden from view, unless the insured was aware of it. While the event purportedly occurred on July 1, 2015, the insured did not provide notice to Wesco Insurance Company until July 20, 2015. By that time, most of the repairs had already been made.

Wesco denied the claim on the ground that sloping floors throughout the building put the insured on notice that the floors were decayed. During discovery, the tenant testified that the floor did not collapse but, instead, had been intentionally removed by the insured’s workers during an effort to fix rotten wood that had been exposed after the workers attempted to fix leaking pipes within the walls and floors. In addition, Wesco learned during discovery that two representatives of a housing preservation board had been called to the apartment before the “collapse” and observed rotting structural elements and photographed the conditions that they saw.

Discovery also revealed that the physical conditions immediately following the “collapse” were inconsistent with a true collapse. These conditions included the fact that the tub, toilet, and sink were not found in the debris below but had been neatly placed in the hallway outside the apartment. The hole in the floor had straight, not jagged, lines, and none of the plumbing lines under the floor were damaged. All the engineers and architects who inspected the loss, including the insured’s experts, either concluded the floor was intentionally removed or that they could not rule out intentional conduct as a reasonable possibility.

Wesco moved for summary judgment on several grounds. The court granted the carrier’s motion upon a finding that the event that took place was not a “collapse” and therefore did not trigger coverage.

Wesco Insurance Company was represented by partner Kevin F. Buckley.