On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1390-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Carchman, Lihotz and Ashrafi.
Defendant Greater New York Mutual Insurance Company appeals from a judgment following a bench trial holding it liable to plaintiff on a policy of insurance for water damage caused to plaintiff's building by a burst water pipe. It also appeals from two orders limiting its defenses. We affirm.
Plaintiff River Vale at Holiday Farms Condominium Association-Apartment Section, Inc., is the owner of a six-story building housing about 150 residents. On March 6, 2007, water from an underground pipe flooded lobbies of the building and caused substantial damage. The elevators stopped running and all electricity had to be shut off. The residents were evacuated for several days until all safety requirements could be satisfied.
Plaintiff immediately engaged the services of a contractor to determine the cause of the flooding and to make repairs. The contractor drilled holes and narrowed the source of the water to the utility/boiler room. Under that room, a water main came vertically through the concrete floor and then branched off to service the building. Using cameras inserted into the water main line, the contractor was able to locate a crack in the pipe about three feet underneath the floor.
At trial, it was established that the water main came horizontally underneath the exterior wall of the building and below the utility room before making a ninety-degree turn at an elbow to the vertical pipe, which rose through the utility room floor. The elbow was encased in a concrete block called the "thrust block," which was intended to keep the elbow in place and prevent a "water hammer," which is a "big thrust" of water pressure that tends to pull the pipe down and out of the elbow.
The contractor made repairs to the building at a cost of $38,156.11. At the time of the flooding, plaintiff was insured by defendant under an all risk commercial insurance policy. Plaintiff made a claim on its insurance policy for all its damages, which were stipulated at trial to be $225,351.91.
The policy provided coverage for "water damage," defined as "accidental discharge or leakage of water or stream as the direct result of the breaking apart or cracking of any part of a system or appliance (other than a sump system including its related equipment and parts) containing water or stream." However, defendant denied the claim on the basis of three exclusions in the policy: for damages caused by subterranean water, earth movement, and settling/cracking. Defendant contended that the damages were caused by settling and earth movement under the "thrust block" that resulted in subterranean water flooding the building.
Plaintiff brought an action for a declaratory judgment that its damages were covered by the policy and for payment of its claim. Defendant moved for summary judgment based on the exclusions of the policy. The motion for summary judgment was denied by written opinion of Judge Jonathan N. Harris, who found that genuine issues of fact existed as to whether settling or earth movement caused the water main to burst and that, because of ambiguity in the language of the subterranean water exclusion, that provision did not apply to a pipe installed under the floor of the building to supply water.
The case was heard at trial by Judge Estela M. De La Cruz without a jury. During the trial, Judge De La Cruz granted plaintiff's motion to exclude the testimony of one of its two proffered expert witnesses, F. Patrick Reilly, on the subject of the cause of the pipe bursting. The judge concluded that Reilly's report contained only a net opinion. The judge denied plaintiff's motion to bar defendant's other expert witness, Alan Fidellow, on the same ground. After those rulings, defendant requested that Reilly be permitted to testify as a fact witness on the subject of his observations of the broken pipe. The judge denied that application under N.J.R.E. 403.
At trial, the court heard from four witnesses: a representative of plaintiff, the contractor who investigated and made repairs, and an expert for each side on the cause of the burst water pipe. On April 24, 2009, the judge issued a written decision finding in favor of plaintiff and awarding the stipulated ...