PRINCIPLES OF CONTRACT INTERPRETATION APPLIED TO DETERMINE THE DEDUCTIBLE AMOUNT; SUMMARY JUDGMENT SHOULD HAVE BEEN GRANTED TO THE INSURER.

The Second Department, reversing Supreme Court, determined the defendant insurer’s interpretation of the policy language was correct and plaintiff’s damages claim was below the deductible. Plaintiff’s facility was damaged during Hurricane Sandy. The damage claim was approximately $2.3 million. The question on appeal was whether the policy language supported the insurer’s position that the applicable deductible was 2% of the total value of the property, which amounted to more than $2.3 million. Or whether the policy language supported the insured’s position that the deductible was 2% of the $2.5 million sublimit for flood damage. The court concluded the insured’s interpretation was not viable because it rendered several other policy provisions superfluous: “In sum, there is only one reasonable interpretation of the relevant deductible provision of the policy. That interpretation supports [the insurer’s] contention that the applicable deductible was $2,494,020, and that the claim submitted by [the insured] did not meet the deductible.” Castle Oil Corp. v ACE Am. Ins. Co., 2016 NY Slip Op 01632, 2nd Dept 3-9-16

 

NSURANCE LAW (PRINCIPLES OF CONTRACT INTERPRETATION APPLIED TO DETERMINE DEDUCTIBLE)/CONTRACT LAW (INSURANCE LAW, PRINCIPLES OF CONTRACT INTERPREATION APPLIED TO DETERMINE DEDUCTIBLE)