In Pioneer Tower Owners Assn. v. State Farm Fire & Cas. Co., 12 NY3d 302 (2009), the New York Court of Appeals found an "earth movement" exclusion was ambiguous when applied to an excavation. The court now considered whether a similar exclusion, expressly made applicable to "man made" movement of earth, eliminated the ambiguity when loss was created by excavation. Bentoria Holdings, Inc. v. Travelers Indem. Co., 2012 N.Y. LEXIS 3087 (N.Y. Oct. 25, 2012).
Plaintiff's building suffered cracks due to an excavation being conducted on the lot next door. A claim was submitted to Travelers, plaintiff's insurer. Travelers rejected the claim, relying on the earth movement exclusion. The exclusion provided there would be no payment for loss due to earth movement "whether naturally occurring or due to man made or other artificial causes."
Plaintiff sued for breach of the policy. The Supreme Court denied Travelers' motion for summary judgment and the Appellate Division affirmed.
The Court of Appeal reversed. In Pioneer, the policy did not clearly exclude "an excavation -- the intentional removal of earth by humans." Therefore, the exclusion was ambiguous. Here, however, Travelers expressly excluded earth movement "due to man made or artificial causes." The exclusion, therefore, unambiguously meant that the intentional removal of earth by humans was an excluded event.
