United States District Court, D. New Jersey
TERE VILLAMIL AND VILLA COMPONETES, INC., DBA as LA JOLIE SALON AND SPA Plaintiffs,
SENTINEL INSURANCE COMPANAY, LIMITED., et. al. Defendants.
L. Wolfson, United States District Judge.
matter comes before the Court on the Motion for summary
judgment by Defendants Sentinel Insurance Company, Limited
(“Sentinel”) and The Hartford Financial Insurance
Company's (cumulatively, “Defendants”) on
insurance coverage claims asserted in the Complaint of
Plaintiffs Tere Villamil (“Ms. Villamil”) and
Villa Components, Inc. d/b/a/ La Jolie Salon and Spa
(“La Jolie”) (cumulatively,
“Plaintiffs”). The instant dispute arises from
Defendants' denial of Plaintiffs' insurance claim in
connection with damages caused as a result of a storm which
occurred in the Princeton, New Jersey, area on July 30, 2016.
For the reasons set forth below, Defendants' Motion is
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
issued an insurance policy, i.e., the
“Hartford Spectrum Business Insurance Policy”
(“the Policy”), to La Jolie, a beauty salon
located at the intersection of Witherspoon and Hulfish
Streets, in Princeton, New Jersey, for the period from June
15, 2016 to June 15, 2017. Sentinel's Statement of
Undisputed Facts (“Defs.' Statement of
Facts”), ¶¶ 1-2. La Jolie occupies two floors
in the Hulfish Building. Id. ¶ 3, Exhibits E
& F. A descending stairwell, enclosed by three concrete
walls, leads to La Jolie's lower floor, which is below
the street level and accessible through a glass door
entrance. Id. ¶ 26, Exhibit H. Moreover, a
landing area with a drain inlet is located at the bottom of
the stairwell; the stairwell, however, is not protected by a
roof and “is subject to direct entry of rains, snow and
all elements.” Id.
Policy's terms and provisions, in relevant part, obligate
the insurer to provide coverage for the “physical loss
of or physical damage to Covered Property” that is
“caused by or resulting from a covered Cause of
Loss.” Id. ¶ 21. Specifically, Covered
Property and Cause of Loss are defined pursuant to the
Agreement to include:
1. Covered Property
b. Business Personal Property located in or on the
building(s) described in the Declarations at the
“scheduled premises” or in the open (or in a
vehicle) within 1, 000 feet of the “scheduled premises,
(1) Property you own that is used in your business;
(2) Tools and Equipment owned by your employees, which are
used in your business operations
(3) Property of others that is in your care, custody or
(4) “Tenant Improvements and Betterments”
3. Covered Cause of Loss
Risks of Direct Physical Loss unless the loss is
a. Excluded in Section B., Exclusions
b. Limited in Paragraph A.4 Limitations; that follow.
Id. ¶ 21, Exhibit A.
the Policy's terms and provisions do not provide coverage
for damage or loss arising from “[f]lood, including the
accumulation of surface water” or “[w]ater that
backs up from a sewer or drain”; indeed, as the Policy
sets forth: “[s]uch loss or damage is excluded
regardless of [whether] any other [covered] cause or event .
. . contributes concurrently or in any sequence to the
loss.” Id. ¶ 22, Exhibit S.
Notwithstanding that exclusion, the Parties entered into a
seperate “STRETCH” agreement, which modifies the
contract to include additional coverage for various forms of
physical loss or physical damage, including those arising
17. Sewer and Drain Back Up
The following Additional Coverage is added:
We will pay for direct loss of or physical damage to Covered
Property solely caused by water that backs up from a sewer or
drain. This coverage is included within the Covered Property
Limits of Insurance.
THIS IS NOT FLOOD INSURANCE
We will not pay for water or other materials that back up
from any sewer or drain when it is caused by any flood. This
applies regardless of the proximity of the flood to Covered
Property. Flood includes the accumulation of surface water,
waves, tides, tidal waves, overflow of steams or other bodies
of water, or their spray, all whether driven by wind or not
that enters the sewer drain system.
Id. ¶ 23, Exhibit Q.
the policy period, on July 30, 2016, a severe thunderstorm,
estimated to constitute a two hundred to five hundred year
storm, resulted in approximately five to seven inches of rain
within a two-hour period. Id. ¶¶ 4, 5-7. As a
consequence, water pooled at the bottom of the stairwell
which is next to La Jolie's lower floor entrance, and
subsequently, the water leaked through the building's
glass door entrance, causing the building to sustain damages.
Id. ¶¶ 12-13.On the day after the storm,
Ms. Villamil telephoned Sentinel to report an insurance claim
and provided the following explanation to a
Thank you for calling The Hartford, this is Christina, how
may I help you?
Tere Villamil: Hi, yes, this is Tere Villamil, I'm
calling from La Jolie Salon & Spa in Princeton, uh, we
have had a flood in our lower level yesterday that was quite
awful, actually. I'll send you a video. Um, and the first
floor was damaged of the business and I need to put in a
claim. I also put in a claim with the landlord as well.
Christina: New Jersey, ok. And when did this flood happen?
Tere Villamil: Yesterday. Uh, we were there the entire day
trying to clean it all up. I sent the email and a notice to
my agent, but I was in the middle of cleaning so I never
called you. I called the landlord first.
Christina: Oh, okay.
Tere Villamil: Yesterday's um extreme rain that we got in
two hours ...