Jones v. State Farm Fire & Cas. Co.

189 A.D.3d 1565

138 N.Y.S.3d 609

Tyrana JONES, et al., respondents,

v.STATE FARM FIRE & CASUALTY COMPANY, appellant, et al., defendants.

2019–00734

Index No. 518268/18

Supreme Court, Appellate Division, Second Department, New York.

Argued—June 22, 2020

December 30, 2020

Rivkin Radler LLP, Uniondale, N.Y. (Merril S. Biscone and Cheryl F. Korman of counsel), for appellant.

Solomos & Storms, Astoria, N.Y. (Derrick Storms of counsel), for respondents.

MARK C. DILLON, J.P., HECTOR D. LASALLE, ANGELA G. IANNACCI, LINDA CHRISTOPHER, JJ.

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract and negligence, the defendant State Farm Fire & Casualty Company appeals from an order of the Supreme Court, Kings County (Carolyn E. Wade, J.), dated December 24, 2018. The order granted the plaintiffs' motion for a preliminary injunction directing the defendant State Farm Fire & Casualty Company to continue to pay for the plaintiffs' temporary housing costs.

ORDERED that the order is affirmed, with costs.

The plaintiff Tyrana Jones owns a house in Brooklyn that was insured under a homeowner's insurance policy issued by the defendant State Farm Fire & Casualty Company (hereinafter State Farm). On June 20, 2018, Jones's house was allegedly damaged by construction taking place on the adjacent lot. On June 23, 2018, the City of New York Department of Buildings found Jones's house to be unsafe, and a vacate order was subsequently issued. For two months, State Farm paid for Jones, her two daughters, and her four young grandchildren to live in temporary housing. By letter dated September 7, 2018, State Farm disclaimed coverage and informed Jones that it would discontinue paying for temporary housing after September 14, 2018.

On September 10, 2018, Jones commenced this action, alleging that her insurance policy required State Farm to pay for temporary housing. The policy provides coverage for "Additional Living Expense" for up to 24 months, "[w]hen a Loss Insured causes the residence premises to become uninhabitable." By amended summons and complaint, Jones added her children and grandchildren as plaintiffs. The plaintiffs asserted, among other things, a cause of action against State Farm to recover damages for breach of contact and a cause of action against the defendants 174 Madison, LLC, Shell N.Y. Construction, Inc., and Brooklyn B Company Group, Inc., which were the entities allegedly responsible for the construction, to recover damages for negligence.

In an order dated December 24, 2018, the Supreme Court granted the plaintiffs' motion for a preliminary injunction directing State Farm to continue to pay their temporary housing costs. State Farm appeals.

The determination whether to grant a motion for a preliminary injunction (see CPLR 6301 ) rests within the sound discretion of the Supreme Court, and requires a party to demonstrate a probability of success on the merits, a danger of irreparable injury in the absence of an injunction, and a balance of equities in that party's favor (see Nobu Next Door, LLC v. Fine Arts Hous., Inc., 4 N.Y.3d 839, 800 N.Y.S.2d 48, 833 N.E.2d 191 ). These elements must be established by clear and convincing evidence (see Liang v. Yi Jing Tan, 155 A.D.3d 1020, 63 N.Y.S.3d 870 ).

The plaintiffs demonstrated a probability of success on the merits. The policy provides coverage for "direct physical loss" to the subject property, including the "foundation, floor slab and footings supporting the dwelling." State Farm contends that the damage sustained by Jones's property falls within the "Earth Movement" exclusion to coverage, "meaning the sinking, rising, shifting, expanding or contracting of earth, all whether combined with water or not. Earth movement includes but is not limited to earthquake, landslide, mudflow, mudslide, sinkhole, subsidence, erosion or movement resulting from improper compaction, site selection or any other external forces." As State Farm contends, this exclusion applies to a loss caused by excavation on an adjacent lot (see Bentoria Holdings, Inc. v. Travelers Indem. Co., 20 N.Y.3d 65, 67, 956 N.Y.S.2d 456, 980 N.E.2d 504 ; Sheehan v. State Farm Fire & Cas. Co., 239 A.D.2d 486, 658 N.Y.S.2d 61 ).

An insurer bears the heavy burden, however, of demonstrating not only that an exclusion is subject to no other reasonable interpretation, but also that the exclusion applies in a particular case (see Insurance Co. of Greater N.Y. v. Clermont Armory, LLC, 84 A.D.3d 1168, 923 N.Y.S.2d 661 ). Here, the plaintiffs' submissions contradict the conclusion of State Farm's expert that the damage to the property was caused by soil movement. The plaintiffs submitted affidavits, photographs, and an expert's report, all indicating that the damage to the property was caused by impacts and vibrations from a large Hitachi backhoe operated at the construction site. Notably, ...