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Richard A. Brice v. Plaintiff

December 30, 2010


The opinion of the court was delivered by: Paul G. Gardephe, U.S.D.J.:


This is an insurance coverage dispute. Plaintiff Richard Brice alleges that Defendant State Farm Fire and Casualty Company ("State Farm") improperly refused to compensate him, under his homeowner's policy, for damage to his property caused by excavation and construction on an adjacent property. While State Farm provided coverage for losses caused by vibration stemming from the work on the neighboring lot, it denied coverage for property damage caused by negligent underpinning, claiming that Brice's homeowner's policy offered no coverage for damage caused by earth movement. Brice's suit seeks $739,000 in damages and attorneys' fees. Pending before the Court is State Farm's motion for summary judgment. For the reasons stated below, State Farm's motion will be GRANTED.


State Farm provided Brice with a homeowner's insurance policy for his two-story residential building located at 463 West 150th Street, New York, New York, effective January 15, 2008 to January 15, 2009. (State Farm R. 56.1 Stmt. ¶ 1)*fn1 On or about April 10, 2008, Brice's neighbor began excavation and construction activities on an adjacent property. The excavation caused significant structural and other damage to Brice's property due to faulty underpinning that permitted earth to slide away from the foundation of Brice's building. (State Farm R. 56.1 Stmt. ¶¶ 2, 4; Fleming Decl. ¶ 3, Ex. 2 at 3 (April 28, 2010 Sunshine Ltr.) ("it is undisputed in this case . . . that the underpinning was flawed and as a result, earth slid away beneath plaintiff's building causing damage")) Brice submitted a claim to State Farm for damages resulting from the negligent underpinning, but the carrier agreed to pay for only $11,615.99 in damage caused by vibration, denying the balance of the claim on a variety of grounds, including an earth movement exclusion provision in the policy. (State Farm R. 56.1 Stmt. ¶ 5; Fleming Decl., Ex. 3 at SF-0005)

On December 18, 2009, Brice filed suit in Supreme Court of the State of New York, New York County, seeking $739,000, representing damages for the unpaid portion of his claim and attorneys' fees. On January 27, 2010, State Farm removed the action to federal court on diversity grounds. (Docket No. 1) State Farm subsequently filed a third-party complaint against the developer (Argyle Development II LLC) and general contractor (AB DesignBuild) who performed the work on the adjacent property. (Docket No. 7)

State Farm has now moved for summary judgment against Brice based on the earth movement exclusion provision in his homeowner's policy.



Summary judgment is warranted when the moving party shows that "there is no genuine issue as to any material fact" and that it "is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). "The movant's burden will be satisfied if he can point to an absence of evidence to support an essential element of the nonmoving party's claim." Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995).

"A dispute about a 'genuine issue' exists for summary judgment purposes where the evidence is such that a reasonable jury could decide in the non-movant's favor." Beyer v. County of Nassau, 524 F.3d 160, 163 (2d Cir. 2008). In deciding a summary judgment motion, the Court "resolve[s] all ambiguities, and credit[s] all factual inferences that could rationally be drawn, in favor of the party opposing summary judgment." Cifra v. Gen. Elec. Co., 252 F.3d 205, 216 (2d Cir. 2001). However, "a party may not 'rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment.'" Lipton v. Nature Co., 71 F.3d 464, 469 (2d Cir. 1995) (quoting Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir. 1986)).

Under New York law,*fn2 "'[t]he proper interpretation of an unambiguous contract is a question of law for the court, and a dispute on such an issue may properly be resolved by summary judgment.'" RSL Commc'ns, PLC v. Bildirici, No. 04 Civ. 5217 (RJS), 2010 WL 846551, at *1 (S.D.N.Y. Mar. 5, 2010) (quoting Omni Quartz v. CVS Corp., 287 F.3d 61, 64 (2d Cir. 2002)); Law Debenture Trust Co. of N.Y. v. Maverick Tube Corp., 595 F.3d 458, 465 (2d Cir. 2010) ("Under New York law . . . the initial question for the court on a motion for summary judgment with respect to a contract claim is 'whether the contract is unambiguous with respect to the question disputed by the parties.'" (quoting Int'l Multifoods Corp. v. Commercial Union Ins. Co., 309 F.3d 76, 83 (2d Cir. 2002))). Where the provision to be interpreted is a policy exclusion in a contract, courts will enforce such policy exclusions where they "'have a definite and precise meaning, unattended by danger of misconception . . . and concerning which there is no reasonable basis for a difference of opinion.'" Pioneer Tower Owners Ass'n v. State Farm Fire & Cas. Co., 12 N.Y.3d 302, 306 (2009) (quoting Breed v. Ins. Co. of N. Am., 46 N.Y.2d 351, 355 (1978)).

The New York Court of Appeals has noted that the "law governing the interpretation of exclusionary clauses in insurance policies is highly favorable to insureds":

"[W]henever an insurer wishes to exclude certain coverage from its policy obligations, it must do so in clear and unmistakable language. Any such exclusions or exceptions from policy coverage must be specific and clear in order to be enforced. They are not to be extended by interpretation or implication, but are to be accorded a strict and narrow construction. Indeed, before an insurance company is permitted to avoid policy coverage, it must satisfy the burden which it bears of establishing that the exclusions or exemptions apply in the particular case, and that they are subject to no other reasonable interpretation."; see also Cone v. Nationwide Mut. Fire Ins. Co., 75 NY 2d 747, 749 [1989] [exclusions from coverage "construed strictly against the insurer"]; Breed Insurance Co. of No. Am., 46 NY2d 351, 353 [1978] ["ambiguities in an insurance policy are to be construed against the insurer, particularly when found in an exclusionary clause"].)

Pioneer Tower, 12 N.Y.2d at 307 (quoting Seaboard Sur. Co. v. Gillette Co., 64 N.Y.2d 304, 311 (1984) (citations and ...

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