Surabian Realty owns a professional office building in Foxborough, Massachusetts. In June, 2009, heavy rains fell in the area of the property. About thirty minutes into the storm, water stopped flowing down a parking lot drain that had become clogged with debris. As a result, rainwater collected in the parking lot and seeped under the door of the building, flooding and damaging the lower level.
Surabian sought coverage from its insurer, NGM. The policy contained an exclusion for loss or damage caused by water "regardless of any other cause or event that contributes concurrently or in any sequence to the loss." The phrase in quotes is called an anti-concurrent causation clause, and is often an issue in coverage for hurricane losses where a policy provides coverage for wind damage but excludes coverage for water damage.
The original water exclusion included surface water and water "that backs up or overflows from a sewer, drain or pump." The sewer, drain or pump clause, however, was replaced by a policy endorsement under which "the most we [the insurer] will pay for loss or damage caused by water that backs up or overflows from a sewer, drain or sump is $25,000."
NGM denied the claim because the damage resulted at least in part from surface water, which was excluded by the policy.
In Surabian Realty Co., Inc. v. NGM Ins. Co., __ N.E.2d __, 2012 WL 2819398, the Supreme Judicial Court of Massachusetts noted that "surface water" has been defined by case law as "waters from rain, melting snow, springs, or seepage, or floods that lie or flow on the surface of the earth and naturally spread over the ground but do not form part of a natural watercourse or lake." Rainwater that collects in a parking lot is surface water. Rainwater that collects on the ground is surface water even if, but for an obstruction, the water would have entered a drainage system.
The court reviewed extrajurisdictional cases that stand for the proposition that water must have "occupied" a pipe or drain in order to have backed up or overflowed from it.
The court held, "Construing these clauses in combination, we interpret the insurance contract, as amended by the indorsement, to exclude damage caused by flood waters that spread over the surface of the ground without having entered a drain, but to cover damage caused by water that backed up after entering a drain."
The parties agreed that the damage at issue was caused both by water that backed up after entering the drain and by water that, as a result of the blockage, never entered the drain. (I'm not an engineer, but I would question why water would have backed up from the drain. What was the force that pushed the water out of the drain? I would think -- again, I'm not an engineer-- that water that entered the drain would stay there, leaving no room for other water to enter it.)
Applying the anti-concurrent causation clause, the court held that because one cause of the damage was covered and another was excluded, there was no coverage for the loss under the policy.