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Sebmar LLC v. AmTrust Financial Svcs. et al., New York Supreme Court, Kings County, Index No. 505707/17 (2018)

The Sebmar case involved an insurance claim for damage to an apartment building located in Brooklyn. The damage was reportedly caused when underpinning activities at the adjacent property undermined the insured’s building.  Indeed, in a related litigation the insured brought against its neighbor and contractors, the insured alleged that excavation and underpinning activities caused the damage.  In that case, while the carrier accepted the insured’s conclusion regarding the cause of the loss, the claim was denied based on the applicable policy’s exclusion for earth movement “whether naturally occurring or due to manmade or artificial causes.”

In the subject litigation that followed, the insured sued the parent company and affiliate of the carrier (AmTrust), but failed to sue the issuing company (Wesco). Thus, AmTrust moved for summary judgment on the grounds that the insured lacked privity of contract, and even if the policy was enforceable against AmTrust, the policy provided no coverage because its earth movement exclusion barred coverage for settling, cracking, and leaning damage to the building resulting from man-made excavations. Accordingly, the court granted AmTrust summary judgment.

AmTrust Financial Services, Inc. and AmTrust North American, Inc. were represented by partners Kevin F. Buckley and Daniel M. O’Connell.