Court of Appeals Finds Amended Exclusion In Insurance Policy No Longer Ambiguous

In Bentoria Holdings, Inc. v. Travelers Indemnity Co., an insurance coverage action to determine whether the insurer properly denied coverage for building damage that was caused by excavation on the lot next to the insured building, Travelers based its denial on an exclusion for “Earth Movement” contained in its policy.   Notably, a nearly identical earth movement clause was reviewed in the 2009 Court of Appeals' decision Pioneer Tower Owners Assn. v.State Farm Fire & Cas. Co. and there the Court denied summary judgment to the insurer.  In Pioneer, the Court concluded that the clause “did not unambiguously remove” human excavation from coverage.  Here, however, the Court of Appeals was satisfied that human excavation was excluded from policy coverage and granted Travelers’ motion for summary judgment.

The difference between the policies at issue in Bentoria and Pioneer was an additional sentence in the Bentoria policy that specifically excluded earth movement “whether naturally occurring or due to man made or other artificial causes” (emphasis added).  The Court of Appeals held that the latter part of the additional sentence eliminated the ambiguity argument that was available in Pioneer.  Consequently, the Bentoria policy could not “reasonably be read to cover the damage on which plaintiff’s claim is based.”