Opinion ID: 2052528
Heading Depth: 1
Heading Rank: 6

Heading: New York Law Continuum of Damage

Text: The Superior Court decided the injury-in-fact issue as a matter of law. The Superior Court held that property damage occurs only at the time of a leak in the plumbing system, or when the homeowner decides to replace the system. The Superior Court relied upon three cases: Greenlee v. Sherman, N.Y.Supr.Ct.App.Div., 142 A.D.2d 472, 536 N.Y.S.2d 877 (1989); Young v. Insurance Co. of North America, 870 F.2d 610 (11th Cir. 1989); and Holmes Protection of New York, Inc. v. National Union Fire Insurance Co., N.Y.Supr.Ct.App.Div., 152 A.D.2d 496, 543 N.Y.S.2d 459 (1989). We find those cases to be distinguishable. Each involved insurance coverage, not for a policyholder's defective product, but for its negligent work. See Cortland Pump & Equip. Inc. v. Firemen's Ins. Co., 604 N.Y.S.2d at 636. This Court has concluded that the Superior Court erred in holding that, as a matter of New York law, property damage occurs only at the time of a leak in the plumbing system, or when the homeowner decides to replace the system. [9] We have determined that, under New York law, an injury-in-fact or property damage may occur at different points in time along the continuum from initial exposure or installation to actual manifestation. American Home Products I, 565 F.Supp. at 1497-98; American Home Products II, 748 F.2d at 764-66. Compare Fireman's Fund Insurance Co. v. Hartford Fire Ins. Co., 73 F.3d 811 (8th Cir.1996). Accordingly, in this case, property damage sufficient to trigger insurance coverage may occur as early as installation of the plumbing systems into housing units. Eljer Mfg., Inc. v. Liberty Mut. Ins. Co., 972 F.2d 805 (7th Cir.1992), cert. denied, 507 U.S. 1005, 113 S.Ct. 1646, 123 L.Ed.2d 267 (1993). See also Sturges Mfg. Co. v. Utica Mutual Ins. Co., N.Y.Ct.App., 37 N.Y.2d 69, 371 N.Y.S.2d 444, 332 N.E.2d 319 (1975).