Supreme Court, New York County, September 15, 2021

Mound Cotton Wollan & Greengrass, LLP (Kevin F. Buckley and Kayla M. Scoccola of counsel) for defendant.

Wegg & Myers P.C. (Joshua Lee Mallin, Dennis T. D'Antonio, Frank Lanza and Anne Marie Bossart of counsel) for plaintiff.

For the reasons set forth hereinbelow, the instant motion, pursuant to CPLR 3211 (a) (1) and (7), by defendant, Great American Insurance Company of New York, to dismiss the complaint in its entirety is granted.

Background

The facts, simply stated and as alleged in the complaint (NY St Cts Elec Filing [NYSCEF] Doc No. 1), are as follows. Defendant issued a risk property insurance policy to plaintiff (the policy), insuring plaintiff's property located at 35-02 Northern Blvd., Long Island City, New York 11101 (the property). The property, a two-story brick and mortar building with multiple commercial tenants, is adjacent to and directly behind a piece of property owned and maintained by the Metropolitan Transit Authority (MTA), known as the Sunnyside Yard, a 180-acre railroad yard (the MTA property). As relevant hereto, the MTA property was undergoing excavation and construction activity during the time in question. On May 5, 2020, while the policy was in full force and effect, the property "suffered a loss when, as a direct result of the excavation . . . at the [MTA property], the [property's] back exterior wall shifted outward, detached from its [*2]foundation and formed a significant outward bulge resulting in cracking to the interior floors." (NYSCEF Doc No. 1 at 5.) As a result of this loss, plaintiff suffered damages in excess of $3,320,000. That same day, plaintiff notified defendant of the loss. On or about June 24, 2020, defendant denied plaintiff's claim and refused to provide any coverage under the policy.

On February 26, 2021, plaintiff commenced the instant breach of contract action, seeking a judgment (1) on plaintiff's first cause of action, for breach of contract, in an amount believed to be in excess of $3,000,000 (representing the damages to the property), plus interest thereon from May 5, 2020; and (2) on plaintiff's second cause of action, for breach of contract—loss of business income and extra expenses, in an amount believed to be in excess of $320,000 (representing plaintiff's business income and extra expenses losses), plus interest thereon from May 5, 2020.

Defendant now moves, pursuant to CPLR 3211 (a) (1) and (7), to dismiss the complaint, in lieu of an answer, on the{**73 Misc 3d at 525} grounds that an "earth movement" exclusion contained in the policy bars coverage for plaintiff's claim. Plaintiff opposes the motion.

Discussion

Dismissal pursuant to CPLR 3211 (a) (1) is warranted where the documentary evidence submitted conclusively establishes as a matter of law a defense to the asserted claims. (Leon v Martinez, 84 NY2d 83, 88 [1994]; accord Warberg Opportunistic Trading Fund, L.P. v GeoResources, Inc., 112 AD3d 78, 82-83 [1st Dept 2013] ["(d)ismissal under CPLR 3211 (a) (1) is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law"].) Dismissal pursuant to CPLR 3211 (a) (7) is warranted where, after accepting the facts alleged as true and according plaintiff the benefit of every possible favorable inference, the court determines that the allegations do not fit within any cognizable legal theory. (Leon v Martinez, 84 NY2d at 87-88; see also EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005] ["(w)hether a plaintiff can ultimately establish its allegations is not part of the calculus" in determining a motion to dismiss for failure to state a cause of action].) A complaint survives a motion to dismiss for failure to state a cause of action if it gives the court and the parties "notice" of what is intended to be proved and the material elements of a cause of action. (CPLR 3013.)

Here, the policy contains an "earth movement" exclusion that sets forth, in pertinent part:

"C. Exclusions

"1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. . . .

"b. Earth Movement . . .

"(4) earth sinking (other than sinkhole collapse), rising or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty. Soil conditions include contractions, expansion, freezing, thawing, erosion, improperly compacted soil and the action of water under the ground surface. . . .

"This exclusion applies regardless of whether any of the above, in paragraph (1) through (5), is{**73 Misc 3d at 526} caused by an act of nature, man-made or is otherwise caused." (NYSCEF Doc No. 7 at 45-46.)

The complaint alleges that the property "suffered a loss . . . , as [*3]a direct result of the excavation . . . at the [MTA property]." (Emphasis added.) Taken as true, the alleged damage clearly falls within this particular exemption because the loss was the result of intentional movement of earth (i.e., the MTA property's excavation). (See Bentoria Holdings, Inc. v Travelers Indem. Co., 20 NY3d 65 [2012].)

Plaintiff attempts to supplement its pleadings by submitting the affidavit of plaintiff's partner, Alessandro Demarinis (NYSCEF Doc No. 13), wherein he attests that: the MTA property construction project caused significant vibrations at the property; "[a]s a result of the construction work, including without limitations the vibrations caused by the construction work, the [property] suffered damage in the form of broken foundations and significant damage to the wall adjacent to the Sunnyside Yard"; and "[a]s a direct result of the use of [a] backhoe and general work performed in connection with the construction activities taking place in areas adjoining the [property], on or about April 2020, the [property] suffered significant damage." The Demarinis affidavit has attached a photograph, showing the close proximity between the property and the excavation work. Plaintiff argues that "[a]s reflected in the photo, it is clear that the work performed, and necessarily the construction equipment involved—that this active operation came within inches of the [p]laintiff's structure and could have easily made direct contact with it."

However, plaintiff's new allegation that its losses were caused by the negligence of a third party does not take its claim out of the exclusion because the exclusion applies when "loss or damage [is] caused directly or indirectly by" earth movement, "regardless of any other cause or event that contributes concurrently or in any sequence to the loss," and it apples "regardless of whether [earth movement] is caused by an act of nature, man-made or is otherwise caused."

Moreover, this case is distinguishable from Jones v State Farm Fire & Cas. Co. (189 AD3d 1565 [2d Dept 2020]), wherein there was at least some alleged damage to the structure that was not caused by earth movement, but rather by impact damage from heavy equipment. Furthermore, in that case the insured provided the court with expert evidence illustrating that the damage was caused by impact and vibrations from a{**73 Misc 3d at 527} large backhoe. The Appellate Court even went on to say that "coverage would not apply if earth movement were merely a contributing cause of the damage." (Id. at 1567.) Here, the complaint clearly states that the damages were the direct result of the excavation, nothing more, nothing less.

Lastly, plaintiff is not afforded coverage pursuant to the policy's provision providing additional coverage for a "collapse." The policy defines a collapse as "an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its intended purpose." (NYSCEF Doc No. 7 at 52.) However, the policy narrows this additional coverage by stating that it does not apply to:

"(2) a part of a building that is standing even if it has separated from another part of the building;

"(3) a part of a building that is standing or any part of a building that is standing, even if it shows evidence of cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion."

The above policy language is clear, and plaintiff has not alleged any facts illustrating that the property has actually collapsed, only that "the [property's] back exterior wall shifted outward, detached from its foundation and formed a significant outward bulge resulting in cracking to the interior floors." (NYSCEF Doc No. 1 at 5.) Thus, plaintiff is not entitled to coverage under this specific provision.

Of course, whether plaintiff has a cause of action against the MTA is not before this court.

Conclusion

Motion to dismiss granted.