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An FM Global unit has prevailed in litigation in which it was sued by New York University for $1.47 billion in coverage the school claimed it was denied in connection with property and business interruption losses sustained from 2012’s Superstorm Sandy.
Citing a March 2018 memorandum in the case that denied NYU’s motion for leave to amend its complaint, U.S. District Judge Naomi Reice Buchwald in New York granted the insurer summary judgment in Tuesday’s ruling, stating NYU’s argument “is easily dispensed with.”
“FM Global is pleased with the Court’s well-reasoned decision to dismiss NYU’s case in its entirety,” the mutual insurer said Wednesday in a statement. “We have consistently maintained that we treated NYU as we treat all of our policyholders — with the utmost good faith and care and consistent with our policy and obligations.”
An NYU spokesman and its attorneys could not immediately be reached for comment.
NYU had contended in its lawsuit in New York University v. Factory Mutual Insurance Co. that the insurer had incorrectly denied coverage on the basis that a $40 million flood sublimit was applicable, among other issues.
NYU, which had used FM Global as its insurer for about 30 years at the time the litigation was filed, had an “all risks” policy providing $1.85 million in limits for its more than 100 locations, according to the complaint.
NYU said the policy had a $250 million sublimit and a $40 million “sub-sublimit” that applied to only four locations.
Its property damage and business interruption losses during the storm included being forced to close inpatient and outpatient facilities and evacuate patients, according to the complaint.
The Federal Emergency Management Agency ultimately provided NYU with a $1.3 billion grant, accordant to the complaint.
In ruling in FM Global’s favor, Judge Buchwald focused on “time element” or business interruption losses. “NYU’s argument that the $250 million flood limit and the $40 million sublimit do not apply to time element losses, including those contemplated in the Policy’s time element coverage extensions, is easily dispensed with,” she said, referring to her March 2018 memorandum in the case.
“Specifically, the Court’s prior opinion held that language in the limits of liability section of the policy that FM issued to NYU in 2006, which immediately preceded the list of specific limits of liability included in that policy, unambiguously ‘subjected time element claims to the limit of liability for flood.’”
“The Court adheres to its reading of that language as unambiguous in subjecting time element claims to the limit of liability or flood as well as its sublimit,” said the ruling.
“The reconstituted arguments in NYU’s motion fail to persuade the Court otherwise,”’ she said, in granting FM Mutual summary judgment in the case and denying NYU’s cross-motion for summary judgment.
A federal appeals court ruled in June that the windstorm exclusion in an equipment breakdown policy issued by a CNA Financial Corp. unit was ambiguous and that a Brooklyn shopping center may have coverage for damage sustained during Superstorm Sandy.
New York University is suing an FM Global unit for $1.47 billion in coverage it claims was denied in connection with property and business interruption losses sustained from 2012's Superstorm Sandy.