Spindler et al v. Great Northern Insurance Company

Filing 136

MEMORANDUM & ORDER ADOPTING REPORT AND RECOMMENDATION; Judge Brown's R&R (Docket Entry 133) is ADOPTED in its entirety. Plaintiffs' motion for summary judgment (Docket Entry 106) is GRANTED solely on the issue of liability, but DENIED as to damages. Defendant's motion for summary judgment (Docket Entry 111) is DENIED. The parties are directed to submit a joint discovery plan on the question of damages, which will provide for the completion of discovery within sixty (60) days from the date of this Memorandum & Order. So Ordered by Judge Joanna Seybert on 3/9/2016. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
ADAM SPINDLER and CARRIE SPINDLER,
Plaintiffs,
-against-

MEMORANDUM & ORDER
13-CV-5237(JS)(GRB)

GREAT NORTHERN INSURANCE COMPANY,

Defendant.
---------------------------------------X
APPEARANCES
For Plaintiffs:
Johnathan C. Lerner, Esq.
Matthew Scott Azus, Esq.
Lerner Arnold Winston, LLP
475 Park Avenue South, 28th Floor
New York, NY 10016
For Defendant:

John P. Foudy, Esq.
Peter A. Ragone, Esq.
Scott Justin Kantor, Esq.
Rosner Nocera & Ragone, LLP
61 Broadway, Ste. 1900
New York, NY 10006

SEYBERT, District Judge:
This case is an insurance dispute concerning damages
caused by Hurricane Sandy.

Pending before the Court are: (1) the

parties cross-motions for summary judgment (Docket Entries 106,
111);

(2)

Magistrate

Recommendation

(“R&R”),

Judge

Gary

recommending

Plaintiffs’

motion

for

summary

Defendant’s

motion

(Docket

Entry

Objections (Docket Entry 134).

R.

Brown’s

that

judgment
133);

the
in

and

Report
Court

part
(3)

and

and
grant
deny

Defendant’s

For the reasons that follow, the

Court OVERRULES Defendant’s Objections and ADOPTS the R&R in its
entirety.
BACKGROUND
Homeowners

Adam

and

Carrie

Spindler

(“Plaintiffs”)

commenced this action on August 13, 2013 against Great Northern
Insurance Company (“Defendant”) alleging that Defendant breached
the terms of their insurance policy (the “Policy”), by failing to
cover a claim they submitted following damage sustained to their
property.

(See Compl. ¶ 13.)1

The Court will not reiterate all

of the pertinent facts of this case, which are extensively detailed
within Judge Brown’s R&R.

Briefly, however, Plaintiffs’ property,

located at 2947 Shore Drive, Merrick, New York, abuts a body of
navigable water known as the East Bay.

(Pls.’ 56.1 Stmt., Docket

Entry 107, ¶ 1; Def.’s 56.1 Stmt., Docket Entry 14, ¶ 6.)

During

Hurricane Sandy, Plaintiffs’ property was damaged when two Sea Ray
boats, driven by the storm, repeatedly struck their dock, house,
and deck.
for

the

coverage.

(R&R at 3.)
damage,

and

(R&R at 4.)

Plaintiffs submitted a claim to Defendants
on

November 19,

2012,

Defendant

Defendant relied upon, inter alia, the

“Surface Water” exclusion within the Policy, which states:
Surface water. We do not cover any loss caused
by:
flood, surface water, waves, tidal water,
overflow of water from a body of water, or
1

denied

The Complaint is located at Docket Entry 1, at 7-12.
2

water borne material from any of these,
including when any such waters or water
borne material enters and backs up or
discharges from or overflows from any sewer
or drain located outside of or on the
exterior of a fully enclosed structure;
run off of water or water borne material
from a paved surface, driveway, walkway,
patio, or other similar surface; or
spray from any of these, even if driven by
wind.
But we do insure ensuing covered loss unless
another exclusion applies.
(Defs.’ 56.1 Stmt. ¶ 18.)
Both parties filed motions for summary judgment (Docket
Entries 106, 111), and on July 13, 2015, the Court referred the
motions to Judge Brown for an R&R. (Docket Entry 123.) On February
2, 2016, Judge Brown issued his R&R.

(Docket Entry 133.)

The R&R

recommends that the Court grant Plaintiffs’ motion for summary
judgment on the issue of liability only, and deny Defendant’s
motion in its entirety.

(R&R at 20.)

Judge Brown specifically found that damage caused by the
“physical collision” of the boats with Plaintiffs’ property was
not contemplated by the Surface Water Exclusion, and that any
destruction resulting from “two large boats haphazardly traversing
Plaintiffs’ yard” was not explicitly caused by “flood waters.”
(R&R at 17-18.)

Rather, Judge Brown classified the incident as an

3

“ensuing loss” that is explicitly covered by the Policy.

(R&R at

18-19.)
Defendant
February 16, 2016.

filed

Objections

to

Judge

Brown’s

(Objections, Docket Entry 134.)

R&R

on

Defendant

principally argues that the R&R (1) improperly applied the Policy’s
ensuing loss provision, (2) ignores controlling authority, and (3)
makes inappropriate findings of fact.

(Objections at 2-7.)

DISCUSSION
The Court will first address the standard of review
before turning to Plaintiffs’ Objections specifically.
I.

Standard of Review
“When evaluating the report and recommendation of a

magistrate judge, the district court may adopt those portions of
the report to which no objections have been made and which are not
facially erroneous.”

Walker v. Vaughan, 216 F. Supp. 2d 290, 291

(S.D.N.Y. 2002) (citation omitted).
specific,

written

objections

to

A party may serve and file
a

magistrate’s

report

and

recommendation within fourteen days of receiving the recommended
disposition.

See FED. R. CIV. P. 72(b)(2).

Upon receiving any

timely objections to the magistrate’s recommendation, the district
“court may accept, reject, or modify, in whole or in part, the
findings or recommendations made by the magistrate judge.”
U.S.C. § 636(b)(1)(C); see also FED. R. CIV. P. 72(b)(3).

28

A party

that objects to a report and recommendation must point out the
4

specific portions of the report and recommendation to which they
object.

See Barratt v. Joie, No. 96-CV-0324, 2002 WL 335014, at

*1 (S.D.N.Y. Mar. 4, 2002) (citations omitted).
When a party raises an objection to a magistrate judge’s
report, the Court must conduct a de novo review of any contested
sections of the report.

See Pizarro v. Bartlett, 776 F. Supp.

815, 817 (S.D.N.Y. 1991).
or

general

objections,

But if a party “makes only conclusory
or

simply

reiterates

his

original

arguments, the Court reviews the Report and Recommendation only
for clear error.”

Pall Corp. v. Entegris, Inc., 249 F.R.D. 48, 51

(E.D.N.Y. 2008) (internal quotation marks and citation omitted).
Furthermore, even in a de novo review of a party’s specific
objections, the Court ordinarily will not consider “arguments,
case law and/or evidentiary material which could have been, but
[were]

not,

instance.”

presented

to

the

magistrate

judge

in

the

first

Kennedy v. Adamo, No. 02-CV-1776, 2006 WL 3704784, at

*1 (E.D.N.Y. Sept. 1, 2006) (internal quotation marks and citation
omitted).
II.

The Ensuing Loss Provision
Defendant

argues

that

Judge

Brown

misapplied

the

Policy’s ensuing loss provision when he held that damage caused by
the collision of two boats with Plaintiffs’ property was covered
by the Policy.

“Ensuing loss” is a term of art in insurance law.

An ensuing loss provision provides “coverage when, as a result of
5

an excluded peril, a covered peril arises and causes damage.”
Platek v. Town of Hamburg, 24 N.Y.3d 688, 695, 26 N.E.3d 1167,
1172, 3 N.Y.S.3d 312, 317 (N.Y. 2015) (internal quotation marks
and citation omitted).

The classic example of an ensuing loss is

a fire that results from an earthquake.

An insurance policy may

exclude coverage for damage caused by the earthquake, but a
subsequent fire that was a “but for” cause of the earthquake would
still be covered as an “ensuing loss.”

See Lantheus Med. Imaging,

Inc. v. Zurich Am. Ins. Co., --- F. Supp. 3d. ----, 2015 WL 1914319,
at *16 (S.D.N.Y. 2015).

Deciding whether a loss was “ensuing” is

necessarily intertwined with a determination of proximate cause.
In a recent decision about damage caused by Hurricane Sandy, for
example, the Court held that corrosion damage was not an “ensuing
loss” from flood waters because the corrosion was a “normal and
expected” result of water damage.

Nat’l R.R. Passenger Corp. v.

Arch Specialty Ins. Co., No. 14-CV-7510, 2015 WL 4940568, at *8-9
(S.D.N.Y. Aug. 3, 2015) (“For loss to constitute [an] ‘ensuing
loss’ from flood, the flood must cause some sort of damage that,
in turn, creates a separate damage-causing agent that brings about
[the] ‘ensuing loss.’”).
Here, Judge Brown correctly found that damage caused by
the collision of the two boats with Plaintiffs’ property was an
ensuing loss that is not precluded by the Surface Water Exclusion.
Although flood waters undoubtedly facilitated the incident, two
6

boats

breaking

free

of

their

moorings

and

colliding

with

a

residential property is not normal and expected damage caused by
flood waters.

As Judge Brown noted in his R&R, if the boat had

been negligently driven onto the property, the damage they caused
would certainly be covered by the Policy.

(R&R at 18.)

Thus, the

boats can properly be categorized as “a separate damage-causing
agent” that ensued from the flooding.
2015 WL 4940568, at *8.

Nat’l R.R. Passenger Corp.,

Defendant’s objection regarding the

application of the ensuing loss provision is therefore OVERRULED.
III.

Defendant’s Additional Objections
Defendant also argues that Judge Brown did not correctly

apply legal precedent and made improper factual findings.
Court rejects both arguments.

The

First, all of the cases that

Defendant points to were discussed in detail in Judge Brown’s R&R
and need not be rehashed here.

(See R&R at 14-18.)

In addition, Judge Brown did not make improper factual
findings regarding the damage the boats caused to Plaintiffs’
property. In his 56.1 Counterstatement, Defendant does not dispute
that an eyewitness saw “one or more boats repeatedly strike and
damage Plaintiffs’ rear yard during the evening of October 29,
2012.”

(Def.’s 56.1 Counterstmt., Docket Entry 121, ¶ 6.)

Judge

Brown’s colorful descriptions of the incident in the R&R were not
findings of fact that implicate a determination of Plaintiffs’
damages.

Indeed,

Judge

Brown

recommended
7

that

discovery

be

conducted to determine the amount of damages caused by the boats,
which is less than clear.

Therefore, Defendant’s additional

objections are OVERRULED.
CONCLUSION
Judge Brown’s R&R (Docket Entry 133) is ADOPTED in its
entirety.

Plaintiffs’ motion for summary judgment (Docket Entry

106) is GRANTED solely on the issue of liability, but DENIED as to
damages.

Defendant’s motion for summary judgment (Docket Entry

111) is DENIED.

The parties are directed to submit a joint

discovery plan on the question of damages, which will provide for
the completion of discovery within sixty (60) days from the date
of this Memorandum & Order.
SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

March
9 , 2016
Central Islip, New York

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