Opinion ID: 2052528
Heading Depth: 1
Heading Rank: 3

Heading: Superior Court Ruling Cross-Motions for Summary Judgment

Text: HCC filed a declaratory action in Superior Court against various insurance companies, seeking a determination that the policies issued by such insurers provided coverage for the third-party liability claims against HCC. Several of the insurance companies filed a motion for summary judgment on the basis that property damage, as defined under the policies, does not occur until a leak occurs, thereby causing physical injury to or destruction of tangible property. HCC filed a cross-motion for summary judgment. It asserted that property damage to the plumbing fitting, the plumbing system, and the home takes place upon installation of the system and continues through the resulting cracking of the fitting, to the time that water begins to leak from the plumbing system. The Superior Court held that, under New York law, [4] property damage occurs only either at the time of a leak in the plumbing systems causing injury to tangible property or upon a determination by the owners that the plumbing system itself needs to be replaced. Accordingly, the Superior Court concluded that the only insurance policies under which the third-party liability claims could potentially be covered were those policies in effect when a leak or damage to the plumbing system itself occurred or when the homeowner decided to replace the plumbing system. Both rulings are at issue in this appeal.