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JUNE 2017

The New Jersey Supreme Court recently decided its first property insurance case arising from Storm Sandy in Oxford Realty Group v. Travelers Excess & Surplus Lines Co. The central issue was whether the debris removal coverage in the policy applied in addition to the policy’s endorsement sublimiting flood coverage for all losses “resulting from flood to buildings, structures or property in the open” in the policy’s flood zone.  In a 5 to 2 decision, the court held that the debris removal coverage did not apply in addition to the flood endorsement’s $1 million sublimit. If the Appellate Division’s decision had not been overturned, insureds may have used the same line of argument to assert that various other property coverages, including business interruption coverage arising from a flood, would not be limited to the flood sublimit. A similar line of argument also could have been made for other sublimits tied to a particular peril, such as earthquake. The decision also contains some significant holdings that contra proferentem and the reasonable expectations doctrine generally do not apply to benefit sophisticated commercial entities, and that both doctrines apply on if there are ambiguous or misleading policy terms. The court held that because the terms of the policy were not ambiguous, it did not need to address the insured’s arguments on contra proferetem or the reasonable expectations doctrine.


FDCC member Wystan Ackerman of Robinson & Cole LLP briefed and argued this case for the insurer. 

APRIL 2016

In Metsack v. Liberty Mutual Fire Ins. Co., 2017 U.S. Dist. LEXIS 24062 (D. Conn Feb. 21, 2017), a Connecticut federal judge held, in a case of first impression, that the gradual deterioration of a concrete foundation caused by a corrosive mineral in the concrete aggregate was not a “sudden and accidental” collapse under the terms of an Allstate Insurance Company homeowners insurance policy, and granted Allstate’s motion for summary judgment on all counts of the plaintiff’s complaint.  FDCC member firm Robinson + Cole LLP (of Hartford, CT) represented Allstate in the action. 

Metsack was one of many lawsuits now pending in Connecticut’s federal and state courts involving the failure of concrete foundations that were poured during the 1980s and 1990s.  The failures involve cracking and deformation due to long-term corrosion of the mineral pyrrhotite, found in a quarry from which a concrete supplier in northeastern Connecticut excavated aggregate used in the concrete mix.  Lawyers for the homeowner plaintiffs argue that the cracking of the concrete constitutes a “collapse” of the foundation. In Beach v. Middlesex Mutual Ins. Co., 205 Conn. 246, 532 A. 2d 1297 (1987), the Connecticut Supreme Court held that where an insurance policy provides coverage for “collapse,” and that term is not otherwise defined in the policy, “collapse” means a “substantial impairment of the structural integrity of the building.”  In Metsack the Court held that Allstate’s policy was different than the policy at issue in Beach because the Allstate policy, while providing limited coverage for “collapse,” required that a covered collapse be “a sudden and accidental direct physical loss.” Rejecting the plaintiff’s contention that the term “sudden” was ambiguous in the context of the Allstate policy, the District Court held: “Because the parties do not dispute that the Metsacks’ basement walls deteriorated over time, rather than ‘suddenly,’. . .the Allstate policy excludes coverage for their loss. . . .” 2017 U.S. Dist. LEXIS at *23.  



more Calendar

7/24/2017 » 7/29/2017
2017 FDCC Annual Meeting/ Bridging The Gap Insurance Summit

9/17/2017 » 9/19/2017
Corporate Counsel Symposium

10/23/2017 » 10/24/2017
2017 Fall Deposition Boot Camp

11/9/2017 » 11/10/2017
I3 Registration

Featured Members
Marjorie J. BergerMarjorie is with American Nuclear Insurers in CT
Bradford D. BoxBrad Box is with Rainey, Kizer, Reviere & Bell in TN

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