IN Sayreville Seaport Associates Urban Renewal, LP v. Indian Harbor Insurance Company, Appeal No. 17222, Index No. 651626/21, Case No. 2022-02167, 2023 NY Slip Op 00505, Supreme Court of New York, First Department (February 2, 2023) the Court of Appeals, common to New York Appellate Courts, resolved the Sayreville claim in a short and clear analysis.
In 2008, the plaintiff entered into a long-term lease agreement to develop several properties located in New Jersey. In 2007, the plaintiff had engaged non-party Roux Associates, Inc. to perform environmental due diligence in connection with the acquisition of the property, and Roux drew a map identifying the geographic boundaries of various areas believed to contain radiological soil contamination. Indian Harbor Insurance later issued a policy covering the property for the period between October 15, 2008 and October 15, 2018; the policy contained a recommendation, 15, which stated that the policy excluded remediation costs for costs arising from radiological contamination of soil in specific areas of the property.
Inscription 15 identified these parcels with reference to the Roux map. After the policy took effect, it was discovered that remediation was required in areas not previously identified as contaminated, and in September 2018, plaintiffs filed claims regarding the discovery of radiological soil contamination in four areas of the property. As relevant here, the defendant denied the claims for three of the areas, stating that, according to endorsement 15, they fell within the excluded geographic area of the Roux map.
The plain and plain meaning of the unambiguous policy terms presented to the trial court, the Supreme Court, required it to correctly conclude that endorsement 15 excluded coverage for the parcels at issue because they were located within the excluded geographic areas clearly indicated on the Roux map.
The plaintiff attempted, but the Court of Appeals refused, to create an ambiguity in support 15 by referring to its own nomenclature for the sub-areas falling within those geographic areas and then arguing that the sub-areas do not fall within the scope of the exception.
To adopt the plaintiff’s interpretation of endorsement 15 and the Roux map would render the endorsement meaningless, contrary to the rules of contract interpretation.
Decisions in insurance complaints are often long and annoying to read. New York’s appellate decisions, like this one, cut to the key issue and rule. Thanks, New York. Clear and unambiguous policy language must be applied because written and imaginative interpretation by insureds seeking coverage for damages they did not pay for cannot succeed.
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Barry Zalma, Esq., CFE, now limits his practice to serving as an insurance consultant specializing in insurance coverage, insurance claims management, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims attorney and more than 54 years in the insurance industry. He can be reached at http://www.zalma.com and firstname.lastname@example.org
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