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Zions v. Essex Insurance Co.


May 29, 2009


On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-3577-06.

Per curiam.


Argued March 24, 2009

Before Judges Skillman and Espinosa.

The home of plaintiffs, Chaim and Esther Zions, was vacant during extensive renovations in July 2004. Following a rainstorm, there was water in the basement and other damage to the home. Plaintiffs filed a claim for damages under a commercial general liability insurance policy purchased from defendant Essex Insurance Company. When their claim was denied, plaintiffs filed suit. They appeal from an order granting summary judgment to defendant. We affirm.

Drawing all legitimate inferences in favor of plaintiffs, Rule 4:46-2(c), the facts can be summarized as follows:

The commercial general liability policy purchased by plaintiffs covered their vacant home during renovations for the policy period from June 11, 2004, through September 11, 2004. The policy provides "basic" coverage with a $200,000 limit of liability as well as coverage for renovations with a $50,000 limit of liability for replacement costs.

Plaintiffs planned to gut a "good portion of" the first and second floors as part of the renovation. By the date of loss, July 5, 2004, the demolition stage of the renovation was well underway but not completed. As noted by the motion judge, the evidence regarding the condition of the building prior to the storm was sparse. The following is gleaned from Mr. Zions's*fn1 testimony: The floors of the house were intact. Interior walls were being taken down. Certain exterior walls on the first and second floors had been demolished and were "open." Portions of the roof were also removed. Mr. Zions could not recall how much of the roof had been removed but testified that there were areas of the roof that were open to the elements.

On July 4, 2004, in anticipation of a heavy rainstorm, a heavy tarpaulin was placed over the entire roof and draped over the side. The tarpaulin was secured into the wall of the house on a side. The windows on the sides of the house and in the basement were closed.

Mr. Zions described the weather that day as "crazy," very windy, raining and hailing. When Mr. Zions returned a day or two after the storm, the tarpaulin was still on the roof but part of the tarpaulin was ripped out on the side of the house. He found "a lot of water" in the basement. When asked how so much water entered two stories down into a basement, Mr. Zions answered:

Maybe it seeped in through the side. There were certain walls that were open on the first and second floor that were already demolished. However that seepage came in, maybe just follow it along that line, just went straight to the basement. Obviously, the basement is where it's going to land.

Plaintiffs reported the loss to defendant. A public adjuster retained by plaintiffs estimated that approximately $50,000 was required to repair the resulting property damage. Defendant's adjuster estimated the damages to be approximately $23,000. After its investigation, defendant denied plaintiffs' claim under the "windstorm" provision of the policy, which excludes coverage for

Loss or damage to the interior of any building . . . caused by rain . . . whether driven by wind or not, unless the building . . . first sustains wind . . . damage to its roof or walls through which the rain . . . enters. [(Emphasis added.)]

Plaintiffs then filed this lawsuit. After arbitration and a request for a trial de novo, defendant filed a motion for summary judgment. Plaintiffs appeal from the order granting summary judgment and raise the following issues:





It is undisputed that plaintiffs entered into a contract of insurance with defendant and that they suffered a loss. The disputed issue here is whether the loss is covered under the "windstorm" provision of the policy. In this appeal we must consider the facts in a light most favorable to plaintiff. Our inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007) (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 536 (1995)).

Pursuant to the "windstorm" provision, the policy covers losses caused by wind but specifically excludes losses caused by rain "unless the building . . . first sustains wind . . . damage to its roof or walls through which the rain . . . enters." Defendant argues that plaintiffs have failed to present competent, credible evidence that the roof was damaged and that the rain that caused the loss entered through the damaged roof. Plaintiffs counter that the proofs were sufficient.

As a preliminary issue, the parties disagree as to whether the tarpaulin constituted a "roof" under the "windstorm" provision. Plaintiffs find support for their position that it was a "roof" in Victory Peach Group Inc. v. Greater N.Y. Mut. Ins. Co, 310 N.J. Super. 82, 89 (App. Div. 1998), in which this court rejected an argument that coverage could be denied under an "all risk" policy because the damage was to temporary repairs to the roof rather than the roof itself. Defendant seeks to distinguish the ruling in Victory Peach on the grounds that the policy differed from the one here.

An insurance policy is "interpreted according to its plain and ordinary meaning." Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 175 (1992). The policy language "underscores the basic notion that the premium paid by the insured does not buy coverage for all . . . damage but only for that type of damage provided for in the policy." Hardy v. Abdul-Matin, 198 N.J. 95, 102 (2009) (quoting Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 237 (1979)). "[E]xclusions are presumptively valid and will be given effect if 'specific, plain, clear, prominent, and not contrary to public policy.'" Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 95 (1997) (citations omitted); see also Hardy, supra, 198 N.J. at 101-102 (court upheld insurer's denial of benefits to passenger injured in stolen vehicle based on a policy provision excluding PIP benefits to an insured who occupied a vehicle without the owner's permission). However, as a general rule, "insurance policy exclusions must be narrowly construed; the burden is on the insurer to bring the case within the exclusion." Princeton Ins. Co., supra, 151 N.J. at 95. If the policy language is clear, we must interpret the policy as written and refrain from "writing a better insurance policy than the one purchased." Hardy, supra, 198 N.J. at 101-102 (quoting Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001)); Villa v. Short, 195 N.J. 15, 23 (2008); President v. Jenkins, 180 N.J. 550, 562 (2004). If the policy language is sufficiently ambiguous to support two meanings, one that favors the insurer and one that favors the insured, the policy should be construed to provide coverage, President, supra, 180 N.J. at 563, and to "comport with the reasonable expectations of the insured." Zacarias, supra, 168 N.J. at 595; see also Sealed Air Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 375 (App. Div.), certif. denied, 196 N.J. 601 (2008); Search EDP, Inc. v. Home Assurance. Co., 267 N.J. Super. 537, 542 (App. Div. 1993), certif. denied, 135 N.J. 466 (1994).

We note that "roof" is not a defined term within the policy. Webster's II New College Dictionary 985 (3d ed. 2005) provides several definitions. The first, "[t]he exterior surface and its supporting structures on the top of a building," would support defendant-insurer's position. The second, "[t]he top covering of something," would support plaintiff-insured's position. Since "roof" is fairly susceptible of two meanings, one that favors the insurer and one that favors the insured, we will construe the language to sustain coverage, President, supra, 180 N.J. at 563, and find that the tarpaulin may be considered a roof for the purposes of this policy provision.

Even so, plaintiffs' proofs fail to show that the rain entered the building through the roof or through walls that were first damaged by wind. The only evidence presented to establish this prerequisite to coverage was the testimony of Mr. Zions. He was unable to identify wind damage to the roof as the entry point for the rain that collected in the basement. He testified that only part of the tarpaulin had been blown off in the storm and that exterior walls to the building had been demolished and were open to the elements. He even opined that "maybe" the water in the basement had seeped in through the demolished walls.

Plaintiffs have presented no evidence that would permit a rational factfinder to conclude that the water in the basement had entered through an entry point in the roof or wall that was the result of wind damage. Without competent, credible evidence to support that conclusion, there is only one "unavoidable resolution of the alleged disputed issue of fact" and a genuine issue of material fact does not exist. Brill, supra, 142 N.J. at 540 (1995). Given this state of evidence, we find that defendant has sustained its burden of showing that the exclusion applies and that summary judgment was properly granted.


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