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Clear Unambiguous Policy Language Excludes Coverage

February 23, 2017

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As every lawyer knows, there is no greater business asset than a well-drafted agreement, and insurance policies are no exception.  Recently, in <em><a href="">Rosa Pen, Inc. v. Selective Way Insurance Co</a>.</em>, the Appellate Division for the Superior Court of New Jersey affirmed the trial courts granting of summary judgment in favor of Selective Way Insurance Company, finding that the express terms of the policy were unambiguous, despite Plaintiff’s strenuous arguments to the contrary.
Plaintiff tendered a claim for property damage to Selective, alleging the damage had been caused by a sewer back-up.  Selective retained an independent adjuster to investigate Plaintiff’s claim: the report noted the fact that Hurricane Irene had recently made landfall, flooding the area surrounding Plaintiff’s property, and filling the first floor of Plaintiff’s property with 36 inches of water.  Plaintiff filed an affidavit disputing the report’s findings, stating that Irene caused absolutely no flooding or water at the property.
Both the trial court and the appellate division were unconvinced by Plaintiff’s argument.  However, the day was saved by the unambiguous and clear terms of the policy at issue, which specifically excluded any loss or damage from flooding, “regardless of any other cause or event that contributes concurrently or in sequence to the loss.”  Where the terms of an agreement are clear, “they will be enforced as written.”
Thus, the trial court reasoned that even giving Plaintiff every possible favorable inference by deeming at least some damage could have been caused by a backed-up sewer, the overwhelming evidence that Hurricane Irene had flooded the surrounding area, and the well-drafted exclusion in Selective’s policy, meant that Plaintiff’s claim was properly disclaimed as a matter of law.
Thanks to Vivian Turetsky for her contribution to this post.
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