Case Name: B & H Management Corp., Plaintiff, v. Hardware Mutual Casualty Company, Defendant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1960-02-16
Citations: 9 A.D.2d 533
Docket Number: 
Parties: B & H Management Corp., Plaintiff, v. Hardware Mutual Casualty Company, Defendant.
Judges: 
Reporter: Appellate Division Reports
Volume: 9
Pages: 533–536

Head Matter:
B & H Management Corp., Plaintiff, v. Hardware Mutual Casualty Company, Defendant.
First Department,
February 16, 1960.
Joseph Heller of counsel (Martin Heller with him on the brief; Joseph Heller, attorney), for plaintiff.
August C. Flamman for defendant.

Opinion:
Per Curiam.
This is a submission of controversy under sections 546 to 548 of the Civil Practice Act. The underlying question is whether a liability insurance policy for premises 68 Greene Street, New York City, issued by the defendant to the plaintiff covers liability on a claim which was the subject of an action against the plaintiff on the facts hereinafter stated.
On February 25, 1958, the basement premises of 68 Greene Street became flooded as the result of a leak in a standpipe on the street floor. No damage resulted to the property of the plaintiff. However, plaintiff was, on May 12,1958, served with a summons and complaint in an action instituted by Kellner Waste Co., Inc., wherein it was alleged that damage was caused on February 25,1958 to the property of Kellner, the occupant of the adjoining premises, 66 Greene Street, as a result of water leakage from plaintiff's premises.
Paragraph Seventh of the complaint in the prior action alleged " That the aforesaid flooding is believed to have been caused by a break in the plumbing in the defendant's premises at 68 Greene Street." The policy in question provides for liability coverage in respect of: " The ownership, maintenance or use of the premises, and all operations necessary or incidental thereto."
Undoubtedly, the claim which was the subject of the prior action against the plaintiff is within the broad terms of the said coverage. However, the policy also provides for exclusions as " to any of the following insofar as any of them occur on or from premises owned by or rented to the named insured and injure or destroy buildings or property therein and are not due to fire: (1) the discharge, leakage or overflow of water or steam from plumbing, heating, refrigerating or air-conditioning systems, standpipes The exclusion with respect to water damage is not as broad as the coverage. The exclusion is limited to damage to property located in property rented or owned by the insured resulting from water damage because of leakage of " standpipes ". In the instant case, although it would appear that the damage was caused by a leak in the standpipe of the insured premises, nevertheless the property affected was not " therein it was located in the adjoining building, 66 Greene Street, premises uninsured under the provisions of the policy herein.
If it be assumed that the exclusion clause is susceptible of the construction that it is applicable to damage in respect of property other than the insured's located on premises not owned or rented by the insured, plaintiff must prevail, nevertheless, because the clause also can be fairly construed to be inapplicable to such property. It is not enough that the construction contended for by the insurer-defendant can be fairly made. The construction sought by it must be the only construction that can fairly be placed thereon. The division of opinion in this court serves to emphasize that the construction urged by the defendant is not the only one which can be placed on the exclusion clause herein. The applicable principle has been stated as follows (Bronx Sav. Bank v. Weigandt, 1 N Y 2d 545, 551-552): "To sustain the construction urged, the insurer has the burden of establishing that ' the words and expressions used not only are susceptible of that construction but that it is the only construction that can fairly be placed thereon. ' (Hartol Prods. Corp. v. Prudential Ins. Co., 290 N. Y. 44, 49, supra). This it has failed to do.''
Judgment should be directed in favor of the plaintiff for the sum of $2,250, without interest and without costs.