Narob Development Corp. v. Insurance Co. of North America
| Decision Date | 07 September 1995 |
| Citation | 219 A.D.2d 454,631 N.Y.S.2d 155 |
| Parties | NAROB DEVELOPMENT CORP., et al., Plaintiffs-Respondents, v. INSURANCE COMPANY OF NORTH AMERICA, Defendant-Appellant. |
| Court | New York Supreme Court — Appellate Division |
I. Weinstock, for plaintiffs-respondents.
S.W. Kallmann, for defendant-appellant.
Before MURPHY, P.J., and WALLACH, ROSS, NARDELLI and WILLIAMS, JJ.
Judgment, Supreme Court, New York County (Ira Gammerman, J.), entered May 26, 1994, after jury trial, in favor of plaintiffs in the sum of $187,695.00, with interest from April 4, 1992, unanimously reversed, on the law, and the complaint dismissed, without costs.
The policy exclusion at issue barred recovery by plaintiffs, and the trial court erred in denying defendant a directed verdict. After finding that the evidence presented at trial established that the retaining wall collapsed due to plaintiffs' defective workmanship and that the first sentence of "Exclusion 9" of the insurance policy barred recovery by plaintiffs, the trial court misinterpreted the second sentence, which provides an exception to the exclusion and reads as follows:
"Workmanship or Materials"
We won't cover any loss caused by or resulting from error, omission or deficiency in workmanship or materials as respects the cost of making good such error, omission or deficiency. However, we will cover resulting physical loss caused by or to the Covered Property. (Emphasis added.)
Where a property insurance policy contains an exclusion with an exception for ensuing loss, courts have sought to assure that the exception does not supersede the exclusion by disallowing coverage for ensuing loss directly related to the original excluded risk (see, Aetna Cas. & Sur. Co. v. Yates, 344 F.2d 939 (5th Cir.); 80 Broad St. Co. v. United States Fire Ins. Co., 88 Misc.2d 706, 707, 389 N.Y.S.2d 214, affd. 54 A.D.2d 888, 390 N.Y.S.2d 768; Acme Galvanizing Co. v. Fireman's Fund Ins. Co., 221 Cal.App.3d 170, 270 Cal.Rptr. 405). Here, inasmuch as there was no collateral or subsequent damage or loss as a result of the collapse of the free-standing retaining wall, the exception should not have been at issue.
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