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Coney Island Auto Parts Unlimited, Inc. v. Charter Oak Fire Insurance Co.

United States District Court, E.D. New York

August 13, 2014

CONEY ISLAND AUTO PARTS UNLIMITED, INC., Plaintiff,
v.
CHARTER OAK FIRE INSURANCE COMPANY, Defendant.

OPINION AND ORDER

ALLYNE R. ROSS, District Judge.

Plaintiff Coney Island Auto Parts Unlimited, Inc. brings this action against defendant Charter Oak Fire Insurance Company. Plaintiff seeks a declaratory judgment establishing that its insurance policy issued by defendant covers the damages resulting from a collapse of the concrete floor at plaintiff's premises. Following discovery, both parties have brought cross-motions for summary judgment. For the reasons set forth below, I find that the "earth movement" exclusion in the insurance policy precludes coverage for the damage at issue. Accordingly, defendant's motion for summary judgment is granted, plaintiff's motion for summary judgment is denied, and the complaint is dismissed.

BACKGROUND

I. Plaintiff's Insurance Claim

Plaintiff is a reseller and distributor of automotive replacement parts with its principal place of business in Brooklyn, New York. Pl.'s Local Rule 56.1 Statement of Undisputed Facts ("Pl.'s Facts"), Dkt. #34, Ex. 26, ¶ 11. One of plaintiff's subsidiary companies, Chester Auto Parts, Inc., operates a warehouse for auto parts at 1827-1831 Pitkin Avenue, Brooklyn, New York (the "Pitkin Avenue Premises"). Id . ¶¶ 4-5, 10-12.

Defendant is an insurance company incorporated under the laws of Connecticut with its principal place of business in Hartford, Connecticut. Notice of Removal, Dkt. #1, ¶ 6. It is undisputed that defendant issued a commercial insurance policy to plaintiff (the "Policy"), effective July 19, 2011 to July 19, 2012, which covered the Pitkin Avenue Premises, among other locations. Pl.'s Facts ¶¶ 1-3, 5; Def.'s Local Rule 56.1 Statement of Undisputed Facts ("Def.'s Facts"), Dkt. #37, ¶ 1.

Plaintiff asserts that, on or about December 19, 2011, a portion of the concrete floor collapsed at the Pitkin Avenue Premises. Pl.'s Facts ¶ 18; Def.'s Facts ¶ 5. On the same day, the New York City Department of Buildings issued a vacancy order for the Pitkin Avenue Premises. Pl.'s Facts ¶ 20. On or about December 21, 2011, plaintiff, through its broker, submitted a claim to defendant seeking recovery for damage caused by the collapse of the concrete floor. Pl.'s Facts ¶ 21; Def.'s Facts ¶ 6. In a letter dated December 27, 2011, defendant advised plaintiff that it would investigate the claim and reserved the right to deny coverage for all or part of the loss at a future date. Decl. of Rippi Gill ("Gill Decl."), Dkt. #40, Ex. C.

Defendant retained a structural engineer, Steven M. McEvoy, to investigate the claim. Def.'s Facts ¶ 8. In a report dated January 3, 2012, McEvoy stated that when he inspected the Pitkin Avenue premises, he observed that one of the concrete floor slabs in the front half of the building had collapsed and dropped approximately 10 to 14 inches. Gill Decl., Ex. D, at ECF 3. McEvoy found that the building had "pre-existing construction flaws and settlement" dating back to its construction in 1987. Id . He stated:

The front section of this building was constructed over the foundation of a previous building. The foundation had been filled with soil and the concrete filled sonotube extends down to a stable and/or an undisturbed base. Over time the uncompacted soil settled and created a void under the concrete slab. The poured concrete slab was installed without reinforcing throughout and was unable to resist the stress developed as an unsupported concrete slab.

Id.

On January 16, 2012, plaintiff's insurance adjuster Adam Sitt sent a letter to defendant asserting that the Policy covered the claimed loss. Decl. of Eran D. Grossman ("Grossman Decl."), Dkt. #34, Ex. N. Sitt stated that, in the area where the concrete floor collapsed, plaintiff had stored steel racks with auto parts weighing an estimated two to three tons. Id . Sitt asserted that the loss fell under a provision of the Policy that covers damage from a collapse caused by the "weight of people or personal property." Id.

In a letter dated January 24, 2012, defendant informed plaintiff that it would not cover the damage resulting from the collapsed floor. Gill Decl., Ex. H. The letter stated: "[W]e have verified that the collapse to your described premises was due to the uncompacted soil settling and creating a void under the concrete slab, along with the poured concrete slab being installed without sufficient reinforcing." Id . Based on this determination about the cause of the collapse, defendant concluded that the Policy's "earth movement" exclusion barred coverage. Section B of the Policy, entitled "Exclusions, " provides, in relevant part:

1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss....
b. Earth Movement
(1) Any earth movement (other than "sinkhole collapse") whether natural or man made, including but not limited to earthquake, mine subsidence, landslide, or earth sinking, rising or shifting. But if earth movement results in fire, or explosion, we ...

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