Case Conclusion Date: 04.29.2009
Practice Area: Insurance
Outcome: Plaintiff was awarded summary judgment
Description: Condominium tower owners association filed declaratory judgment action against State Farm when State Farm denied coverage for damage to the building caused by defective and negligent excavation and underpinning on an adjacent property. State Farm based its denial of coverage on an "earth movement" exclusion and "settling and cracking exclusion" in the policy. Condominium tower argued that the policy was vague as written and that a reasonable person would not read it to mean that earth movement included damage caused by the intentional removal of earth by others. Condominium association was victorious at the trial court level and the decision was affirmed by the Appellate Division Second Department. State Farm then appealed to the Court of Appeals, New York's highest court, and the decision was again affirmed in favor of the Conominium Association. The case, which was one of first impression at the Court of Appeals level in New York, could have a strong impact on insurance coverage disputes across the United States for years to come.