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Kaye v. Allmerica Financial

July 18, 2007

STEVEN KAYE AND STEPHANIE KAYE, HUSBAND AND WIFE, PLAINTIFFS-APPELLANTS,
v.
ALLMERICA FINANCIAL, D/B/A HANOVER INSURANCE, DEFENDANT-RESPONDENT, AND UNITED WATER NEW JERSEY, DEFENDANT.



On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-282-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted June 13, 2007

Before Judges Wefing and Weissbard.

Plaintiffs, Steven Kaye and Stephanie Kaye, appeal from an order of summary judgment dismissing their suit against defendant Allmerica Financial, d/b/a Hanover Insurance Company*fn1 (Allmerica). We affirm.

On January 31, 2002, plaintiffs purchased property at 95 Bennett Road, Teaneck. They obtained homeowners insurance with Allmerica. Initially, plaintiffs were not certain whether they wanted to live in the house, which was rundown and required significant renovations to be livable. However, they eventually decided to demolish the house and rebuild. They hired a builder in November 2002, but he did not want to begin demolition until the spring of 2003.

Because the house was empty, a decision was made in December 2002 to shut off the water, gas and electricity.

Public Service Electric and Gas Company shut off the electrical and gas services on December 5, 2002. Arrangements were made with United Water (United) to shut off the water on December 5 or 6, 2002. Plaintiffs, who lived in New York, left the house unlocked so that Public Service and United employees could enter the house to accomplish their work. Plaintiffs were told by both utilities that they would not confirm that their work was completed but would call plaintiffs if there were any problems.

In March 2003, plaintiffs received a large water bill from United, indicating that the water had never been turned off. As a result, a hose in the house froze and split, causing 140,000 gallons of water to flow into an upstairs bathroom, causing extensive damage to the building. The house was subsequently demolished in May 2003, and a new house was built.

Plaintiffs asserted a claim against defendant for the water damage, which was rejected. In declining, defendant cited a provision of its "all risk" policy with plaintiffs which excluded coverage for "freezing of a plumbing . . . system or of a household appliance, or by discharge, leakage or overflow from within the system or appliance caused by freezing." The provision continues as follows:

This exclusion applies only while the dwelling is vacant, unoccupied or being constructed, unless you have used reasonable care to:

(1) Maintain heat in the building; or

(2) Shut off the water supply and drain system and appliances of water.

It was undisputed that the building was vacant and that no heat was maintained. However, while reasonable efforts were made to "shut off the water supply," no ...


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