Where the building was damaged by both a covered cause and a non-covered cause, the policy's anti-concurrent/anti-sequential causation clause barred coverage for a collapsed building. Ashrit Realty LLC v. Tower Nat'l Ins. Co., 2015 N.J. Super. Unpub. LEXIS 107 (N.J. Super. Ct. App. Div. Jan. 20, 2015).
The property sustained moderate damage during a storm on August 14, 2011. More extensive damage was caused by Hurricane Irene two weeks later. After the hurricane, a large hole formed due to the collapse of a pipe which ran underneath the property. Once the pipe collapsed, leaking water caused substantial soil erosion, which led to the collapse of the rear portion of the building.
Plaintiff sought coverage from Tower, but the claim was denied based upon exclusions for soil erosion and water damage. The anti-concurrent causation clause excluded coverage where a covered event and an excluded event contributed concurrently to a single loss. Plaintiff sued, contending that damage caused from hidden pipe decay was covered. Tower secured summary judgment.
The Appellate Division affirmed. Tower's expert found that the cause of damage was the result of progressive soil erosion arising from the partial failure of the buried pipe. Plaintiff's expert did not disagree, but concluded the pipe collapsed after the first storm, undermining a portion of the building's foundation. When the hurricane struck, the collapsed pipe was compromised further and the entire rear foundation of the building was compromised.
While loss resulting from hidden decay was covered, loss resulting from earth movement and water damage was not. Even if hidden decay was a cause of loss, plaintiff did not dispute that water leaked from the collapsed pipe which also caused soil erosion. There was no dispute that soil erosion was excluded from coverage. Because the events happened sequentially, the anti-sequential language in the policy excluded coverage.