Earth, Wind, and Water: New York Court Enforces Anti-Concurrency Clause In Superstorm Sandy Case

In Clarke v. Travco Insurance Company, 2015 U.S. Dist. LEXIS 104267 (SDNY, August 7, 2015), a federal judge sitting for the United States District Court, Southern District of New York granted a homeowners insurer summary judgment in a dispute with its policyholder regarding coverage for a Superstorm Sandy claim.

The homeowner was insured for first-party property damage to his home pursuant to a standard homeowners policy. His home, located near the Hudson River, sustained damage as a result of flood water during the storm. The homeowner also sustained damage because his neighbor’s dock was driven into his home. Prior to the storm, it was not disputed that the dock had been floating on top of the water. The insurer’s adjuster concluded that the damage was caused by flood and/or water and was therefore not covered. The insurer denied the claim. The policyholder sued the insurer, claiming that the dock was driven into the insured premises by wind, a covered cause of loss, thereby entitling him to coverage for the resulting property damage.

The policy contained a standard exclusion for water damage including, inter alia, flood, storm surge, waves, wave wash and tidal water, whether or not driven by wind. This exclusion was also subject to a clause commonly referred to as an anti-concurrency clause, which states: “loss from any of these perils is excluded regardless of any other cause or event contributing concurrently or in any sequence of the loss.”

The policyholder attempted to create an issue of fact by offering his investigator’s report into evidence as expert testimony purportedly refuting the findings of the insurer’s adjuster. However, the policyholder’s investigator, whose main qualification was that he lived near the policyholder, was disqualified as an expert based on his testimony that he did not take any measurements or data regarding the storm’s wind speed. The testimony was based on the investigator’s lay observations and assumptions about hurricane wind speeds. His testimony established that he was not even aware that Sandy was downgraded from a hurricane to a storm prior to making landfall. The investigator’s report was admitted as an opinion made by a lay witness, since he inspected the property within a short time after the storm.

The court granted the insurer summary judgment, and further stated that it would have done so even if the insured’s investigator was qualified to give expert testimony. The court’s decision was based on the anti-concurrency clause. In essence, the court held that even if wind contributed to the dock-related damage, so did water since the dock was floating on the water at the time. In so holding, the court further stated that the anti-concurrency language was not ambiguous or otherwise unenforceable. Since water was a contributing factor to the dock being driven into the policyholder’s home, the resulting damage was unequivocally excluded from coverage.

With thousands of Sandy-related cases pending, this case lends further support to matters where wind-damage and water-damage are not independent of one another. The anti-concurrency clause is valid, unambiguous and enforceable, and any matter involving damage for which water is a contributing cause should be excluded from coverage.

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