Defendants. Notice of Motion/Order to Show Cause...1 Cross Motions/Answering Affidavits... 2 Reply Affidavits... 3

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1 SUPREME COURT - STATE OF NEW YORK PRESENT: HON. PETER B. SKELOS, Justice. DHB CAPITAL GROUP, INC., NDL PRODUCTS, INC., INTELLIGENT DATA CORP., ORTHOPEDIC PRODUCTS, INC., POINT BLANK BODY -OR, INC., PROTECTIVE APPAREL CORPORATION OF AMERICA, INC., DHB ARMOR, INC., HARD BODY ARMOR, INC., GRID, INC., DR. BONESAVERS, INC. HITMAN, INC., FLEXAID, INC., NDL INTERNATIONAL, INC., and VAE ENTERPRISES, INC., -against- Plaintiffs, MOTION # 06 INDEX #44 17/00 MOTION SUBMITTED: AUGUST 27,2003 PARMEL AGENCY, INC. and MEL PAIKOFF, ALBANY INSURANCE COMPANY and GRE INSURANCE GROUP, The following papers read on this motion: Defendants. Notice of Motion/Order to Show Cause...1 Cross Motions/Answering Affidavits... 2 Reply Affidavits... 3 Defendants move pursuant to CPLR 3212 for an order dismissing the complaint. For the reasons that follow, the motion is denied. After sustaining interior water damage losses caused by Hurricane Irene in May of 1999, the plaintiffs, DHB Capital Group, Inc., et al, [collectively DHB ], made claim under a liability policy issued by defendants Albany Insurance Company/GRE Insurance Group [ Albany ]. Although the

2 policy provides for a maximum blanket limit coverage amount of $15 million, it also contains a separate endorsement covering losses attributable to flood damage - but only to a maximum or aggregate amount of $500, The policy excludes rain damage to interior portions of an insured premises from coverage, but contains an exception which - insofar as relevant here - provides coverage where rain enters the premises through an opening made by a specified peril, which includes windstorms. The policy states in this respect, as follows: 7. Interior of Buildings - We do not cover loss to the interior of buildings or structures or to personal property in the buildings or structures caused by rain, snow, sleet, ice, sand, or dust unless: a. entering through openings made by a [emphasis added]. specijiedperi1 ; * *?, Albany made certain payments on DHB s claim in accord with the flood damage endorsement, but took the position that since the water allegedly did not enter through an opening made by a specified peril, no further coverage was available. Thereafter, DHB commenced the within action for declaratory relief against, inter alia, Albany, alleging insofar as pertinent here, that the damage was attributable to a windstorm, whic is a specified peril as defined in paragraph 12 of the insurance policy. Specifically, DHB argues that the hurricane s gale force winds forced the water into [the building] through the vents, windows and roof membrane. Upon the instant notice, Albany moves to dismiss the complaint, arguing that the facts establish the applicability of exclusion as a matter of law and that coverage was therefore properly 2

3 limited to that provided by the flood damage endorsement. The motion should be denied as questions of fact exist as to applicability of the exception to the exclusion. In order to negate coverage by virtue of an exclusion, an insurer must establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case (Incorporated Village of Cedarhurst v Hanover Ins. Co., 89 NY2d 293,298 [1996], quotingfrom, Continental Cas. Co. v Rapid-American Corp., 80 NY2d 640,652 [ see also Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377,383 [2003]; Seaboard Sur. Co. v Gillette Co., 64 NY2d 304,3 11 [1984] cj Town of Massena v Healthcare Underwriters Mut. Ins. Co., 98 NY2d 435,444 [2002]; Consolidated Edison Co. of New York, Inc. v Allstate Ins. Co., 98 NY2d 208,218 [2002]). Where the carrier sustains its burden in this respect and the insured then relies upon a exception to the exclusion, the insured must establish the applicability of the claimed exception (Northville Industries Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 89 NY2d 621 [1997]; ITTIndustries, Inc. v Factory Mut. Ins. Co., 303 AD2d 177; Monteleone v Crow Const. Co., 242 AD2d 135, 140 see also 438 Manhattan Avenue, Inc. v Insurance Co. of State of Pennsylvania, 251 AD2d 71). Albany s submissions have established its prima facie entitlement to judgment as a matter of law with respect to its contention that the water inside the building interior did not enter through an opening made by the windstorm (see generally, Alvarez v Prospect Hosp., 68 NY2d 320 [ 19861; Zuckerman v City of New York, 49 NY2d 557 [ 19801; Allied Group, Inc. v Levine, 303 AD2d 698, 756). More particularly, Albany s professional engineer has asserted that upon his inspection of the 3

4 premises, he observed no evidence of damage typically associated with windstorms, displacement or heaving of the roof membrane; relevant damage to roof-mounted i.e., upward vents and/or other equipment; or damage resulting from wind blown debris impacting the roof area. Albany s property insurance adjuster, who inspected the premises within days of the storm, has submitted an affidavit and report which reach a similar result (Alvarez v Prospect Hosp., supra; Zuckerman v City of New York, supra). In light of the foregoing, it was incumbent upon DHB to raise a triable issue of fact with respect to the contention that, in fact, the water entered through an opening made by the windstorm (Allied Group, Inc. v Levine, supra). DBH has met this burden. DHB s expert architect has submitted an affirmation and report in which he concludes, inter alia, that the evidence incontrovertibly established that rain water penetrated multiple areas of exterior [building] envelope, including the roof, during the storm. This observation creates a triable issue of fact as to the relevant inquiry for the purposes of establishing coverage, i.e., whether the water entered an opening made by the windstorm. In further opposition to the motion, plaintiff offers the pre-trial testimony of Eugene Kahn, a licensed public adjuster, who examined the building. found in the interior of the building was caused by Mr. Kahn opined that some of the water wind driven rain which entered the building through the roof membrane as a result of drains and spouts having been torn away. He testified that the water came in at those areas where the spouts and drains were tom away and lifted that portion of the roof from the adhesive holding it down. The affidavit of Sandra Hatfield, also submitted in opposition to the motion, provides circumstantial evidence that the holes repaired by 4

5 INRECON were caused by the storm. In light of the fact that the movant is not able to establish that the holes predated the hurricane and Ms. Hatfield s averments that notwithstanding prior rain storms there was no water damage in the vicinity of the holes, the trier of fact could reasonably conclude that the holes were created by the windstorm associated with the hurricane. In fact, the report prepared by SEA acknowledges that roofing membrane can sustain damage from wind blown debris (see SEA report at p. 15). The report s statement that no gouges or impact marks in the roof surface were observed by SEA (id.) does not overcome the evidence that INRECON made repairs to holes in the roof There is also evidence that the water came in through certain gravity vents located in the ceiling and that these vents, although ordinarily impenetrable to standing water and rain, were forced open by the hurricane s 70 mph winds. There is ample evidence that water entered through the roof and, more importantly, a clear question of fact as to whether said water entered through openings in the building s membrane created by the windstorm associated with Hurricane Irene. The determination of whether the rain came in through openings created by the windstorm is left for the trier of fact. Accordingly, the motion for summary judgment is denied. Counsel are directed to appear for a further conference for the purposes of discussing settlement on November 12,2003 at 9:30 am. Dated: October 29,2003 OCT 3 I 2003