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Alamia v. Nationwide Mutual Fire Insurance Co.

July 11, 2007


The opinion of the court was delivered by: Conner, Senior D.J.


Plaintiffs Filippo and Angela Alamia bring this action against Nationwide Mutual Fire Insurance Company ("Nationwide") for breach of contract alleging that Nationwide improperly denied them insurance coverage for damage to their residence in violation of their Nationwide Homeowners Elite Policy (the "Policy"). Nationwide claims that the Policy was not in effect at the time of the loss, and, even if it were, the damage was caused by "earth movement," which the Policy expressly excludes from coverage. Nationwide now moves for summary judgment on plaintiffs' claim pursuant to FED. R. CIV. P. 56. For the foregoing reasons, Nationwide's motion is granted.


When viewed in the light most favorable to plaintiffs,*fn1 the record reveals the following relevant facts. Filippo and Angela Alamia are married and reside in a single-family home located on 12 Capital Drive, Washingtonville, New York. (See F. Alamia Aff. ¶ 2.) On or about December 21, 2004, plaintiffs purchased an insurance policy from Nationwide that they were told "would cover all property damage [to their residence] except [for] natural disasters." (See id. ¶ 3.) The Policy took effect on February 8, 2005 and expired on February 8, 2006. (See id.)

On or before October 5, 2005, an iron sewage pipe under the foundation of plaintiffs' residence broke and leaked water, causing substantial damage to the bathroom, hallway, bedroom, kitchen and garage area. (See id. ¶ 4; Anton Aff., Exs. N, R.) Visual inspection revealed "cracks in the sheetrock, moldings, door jams and cabinetry." (See Anton Aff., Ex. N.) Plaintiffs retained Carlos Rosaly, a plumber employed by "Rooter-Man," who on October 6, 2005 inspected the damage and determined that the pipe was broken when it was initially installed and had been leaking under the foundation for years. (See Anton Aff., Ex. M.) Rosaly replaced the broken portion of the pipe, but did not repair any of the damage. (See id.)

The next day plaintiffs filed an insurance claim with Nationwide. (See F. Alamia Aff. ¶ 7; Anton Aff., Ex. A.) Nationwide assigned Marianne Anton as the property claims adjuster, and that same day she conducted an inspection of plaintiffs' residence. (See Anton Aff. ¶ 4.) According to Anton, "[i]mmediately noticeable upon walking into the residence [was] a 4-6" grade differential from the front to the back of the house." (See id. ¶ 6.) Further inspection revealed a 18' by 15' by 2' cavity in the earth under the foundation and that the foundation had been cracked and patched on repeated occasions. (See id. ¶¶ 5, 6.) In addition, the interior walls showed signs of movement, including large cracks, and it appeared that moldings had been altered to account for the shifting, doors were cut to allow them to swing freely and sub-flooring was installed to raise the level of the house. (See id. ¶ 6, Exs. D, R.) Anton concluded that the damage was caused by the gradual settlement of the house's concrete foundation. (See Anton Aff. ¶ 7.) Accordingly, on October 7, 2005, Nationwide issued a reservation of rights letter to plaintiffs indicating that the damage may not be covered pursuant to the Policy's "earth movement" exclusion, which provides:

(1) We do not cover loss to any property resulting directly or indirectly from any of the following. Such a loss is excluded even if another peril or event contributed concurrently or in any sequence to cause the loss.

a) Earth Movement and Volcanic Eruption

Earth movement means: earth movement due to natural or unnatural causes, including mine subsidence; earthquake; landslide; mudslide; earth shifting, rising or sinking. . . .

(See Anton Aff. ¶ 4, Exs. C, B (the Policy, Property Exclusions, D1(1)(a)).)

Nationwide retained John P. Flynn of LGI Forensic Group Engineers and Consultants as its engineer expert to inspect plaintiffs' residence in order to verify Anton's initial determination. (See Anton Aff. ¶ 7; Flynn Aff. ¶ 1.) Flynn conducted an inspection of plaintiffs' home on October 17, 2005 and concluded that the damage was caused by the downward movement of the house's foundation, which was not associated with the leak in the pipe, but rather, "soil that is prone to settlement and that [was] inadequately compacted at the time of [the] construction of the house." (See Flynn Aff. ¶ 3.) He opined that the settlement of the foundation caused the break in the pipe, and not vice versa. (See id.) Based upon Anton's initial determination and Flynn's assessment, Nationwide sent plaintiffs a denial of coverage letter on October 18, 2005, indicating that the damage was caused by "earth movement" and, as such, was excluded from coverage under the Policy. (See Anton Aff. ¶ 10, Ex. E.) Specifically, the letter stated:

We regret to inform you that the loss (or a part thereof) is not covered because: The damages are the result of earth movement, settlement and the deterioration of the concrete slab foundation. The failure of the waste line is a direct result of the movement of the floor slab and soil. The soil movement is not associated with the leak in a wasteline, but rather the wasteline failure is a result of the soil movement. The slab was reinforced with rebar, which was noted to have rusted and failed in several areas. The slab has been failing gradually over time as evidenced[] by many cosmetic trim components in the home that had been modified to account for the downward movement. As such loss is excluded, we must respectfully decline this claim for payment.

We refer to the policy under Section I Policy Exclusions on page D1 [regarding earth movement] . . . . (See id., Ex. E.)

On October 18, 2005, plaintiffs retained Alfred A. Fusco, Jr. from Fusco Engineering & Land Surveying, PC, to inspect the damage and evaluate Nationwide's findings. (See F. Alamia Aff. ¶ 8; Fusco Aff. ¶ 1.) That same day Fusco conducted his inspection and concluded that the broken sewer line, over a period of time, caused erosion and settlement of the earth under the slab. This caused settlement of the slab. This settlement caused damage to the bathroom area, hall area, bedroom, kitchen and garage area. (See AntonAff., Ex. N.) Fusco opined "with a reasonable ...

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