Motion-Secondary: E.E. Cruz & Company, Inc. v. Starr Surplus Lines Insurance Company

On June 08, 2020 a Motion-Secondary was filed involving a dispute between E.E. Cruz & Company, Inc., and Starr Surplus Lines Insurance Company, for Commercial - Insurance in the District Court of New York County.

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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

E.E. CRUZ & COMPANY, INC.,
Index No.: 652321/2020
Plaintiff,
Assigned Judge:
-against- Hon. Nancy M. Bannon

STARR SURPLUS LINES INSURANCE
COMPANY,

Defendant.

REPLY MEMORANDUM IN OPPOSITION TO DEFENDANT’S MOTION FOR
SUMMARY JUDGMENT

Dated: December 9, 2021
/s/Stacy M. Manobianca
Stacy M. Manobianca, Esq. (4395935)
SAXE DOERNBERGER & VITA, P.C.
233 Mount Airy Road
Basking Ridge, New Jersey 07920
Tel.: 973-446-7300
SManobianca@sdvlaw.com
Attorneys for Plaintiff, E.E. Cruz & Company, Inc.

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TABLE OF CONTENTS

TABLE OF CONTENTS .................................................................................................... ii

TABLE OF AUTHORITIES ............................................................................................... iii

PRELIMINARY STATEMENT ..........................................................................................1

COUNTER STATEMENT OF MATERIAL FACTS..........................................................4

A. The Insured Project .....................................................................................4

B. The Subject All-Risk Builder’s Risk Policy................................................6

C. The Subject Loss at Pier 719 .......................................................................7

D. Starr’s Investigation of the Loss and Subsequent Denial of Coverage .......8

LEGAL ARGUMENT .........................................................................................................10

I. STANDARD OF REVIEW………………………………………………………….10

II. STARR IS NOT ENTITLED TO SUMMARY JUDGMENT OF CRUZ’S
BREACH OF CONTRACT CLAIM ........................................................................10

A. Starr Cannot Prove Any Exclusion Applies.................................................10

i. The Caisson Exclusion is Inapplicable ............................................11

ii. The Cost of Making Good Exclusion is Inapplicable ......................13

B. Issues of Disputed Material Fact Preclude the Entry of Summary
Judgment on CEE Coverage ........................................................................14

i. The Evidence Demonstrates CEE Coverage is Included in
the Policy .........................................................................................14

ii. The Evidence Demonstrates Cruz had no Obligation to
Affirmatively Request CEE Coverage .............................................16

III. STARR IS NOT ENTITLED TO SUMMARY JUDGMENT OF
CRUZ’S IMPLIED COVENANT OF GOOD FAITH AND FAIR
DEALING CLAIM ............................................................................................17

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A. Starr breached the Covenant of Good Faith and Fair Dealing by
Materially Altering the Policy after it was Bound .....................................18

B. Starr Failed to Investigate and Render a Coverage Determination
in Good Faith ..............................................................................................18

IV. STARR IS NOT ENTITLED TO SUMMARY JUDGMENT ON
CRUZ’S NEGLIGENT MISREPRESENTATION CLAIM .............................20

V. GENUINE ISSUES OF MATERIAL FACT PRECLUDE SUMMARY
JUDGMENT ON CRUZ’S GBL § 349 CLAIM ..............................................21

CONCLUSION ....................................................................................................................23

iii

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TABLE OF AUTHORTIES

Cases

1357 Tarrytown Rd. Auto, LLC v. Granite Properties, LLC, 142 A.D.3d 976 (2nd
Dept. 2016) ........................................................................................................................17

Allendale Mut. Ins. Co. v. Excess Ins. Co. Ltd., 992 F.Supp. 278 (S.D.N.Y. 1998).........18

Alvarez v. Prospect Hosp., 68 N.Y.2d 320 (1986) ..............................................................9

Antoine v. City of New York, 56 A.D. 3d. 583 (2nd Dept. 2008). ..................................13

Broome Cnty. v. The Travelers Indem. Co., 125 A.D.3d 1241 (3rd Dept. 2015) ............13

Gurfein Bros., Inc. v Hanover Ins. Co., 248 AD2d 227, 229 (1st Dept 1998) ..................10

Hartford Fire Ins. Co. v. Bonsera, Inc., 675 N.Y.S.2d 827 (1998) ....................................15

J.A.O. Acquisition Corp. v. Stavitsky, 8 N.Y.3d 144 (2007) ............................................20

Laquila Constr. Inc. v. Travelers Indem. Co. of Illinois, 66 F.Supp.2d 543
(S.D.N.Y.1999). .................................................................................................................13

McCarthy v. New York Prop. Ins. Underwriting Ass'n, 159 A.D.2d 961 (4th Dept.
1990) ..................................................................................................................................10

Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 85
N.Y.2d 20 (1995) ...............................................................................................................22

Riordan v. Nationwide Mut. Fire Ins. Co., 977 F.2d 47, 52 (2d Cir. 1992) .....................22

Parrott v. Coopers & Lybrand, L.L.P., 95 N.Y.2d 479 (2000) ..........................................20

Satispie, LLC v. Travelers Prop. Cas. Co. of Am., 448 F. Supp. 3d 287 (W.D.N.Y.
2020). .................................................................................................................................17

Sea Ins. Co. v. Westchester Fire Ins. Co., 51 F.3d 22, 26 (2d Cir. 1995) ..........................10

Seaboard Sur. Co. v. Gillette Co., 64 N.Y.2d 304 (1984). ...............................................10

Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89, 99 (2d Cir.
2007) .................................................................................................................................17

Vega v. Restani Construction Corp., 18 N.Y.3d 499 (2012) ...............................................9

Valente ex rel. Valente v. State, 2008 WL 482503 (Ct. Cl. 2008) ......................................9

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Westchester Resco Co., L.P. v. New England Reinsurance Corp., 648 F.Supp. 842
(S.D.N.Y. 1986) ................................................................................................................15

Wider v. Heritage Maint., Inc., 827 N.Y.S.2d 837 (2007), ...............................................13

Rules

N.Y C.P.L.R. § 3121(b). ......................................................................................................9

N.Y GBL. § 349 .................................................................................................................21

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PRELIMINARY STATEMENT

Starr Surplus Lines Insurance Company’s (“Starr’s”) Motion for Summary Judgment

(“Motion”) represents its latest effort to avoid payment under the Policy it issued to E.E. Cruz &

Company (“Cruz”). The evidence demonstrates that, at every turn, Starr has meritlessly attempted

to limit the coverage purchased by Cruz – from the time Starr unilaterally and materially altered

the Policy on the eve of its issuance, through its contrived factual narrative in the underwriting,

investigation, and denial of the subject claim, and culminating in the instant Motion. However,

Starr’s Motion fails at the most basic level – Starr has not – and cannot – demonstrate that no

dispute of material fact exists, entitling it to judgment as a matter of law.

Here, Starr asks this Court to enter judgment on its behalf based upon a handful of cherry-

picked facts in the record, patently ignoring all facts contrary to its position. Summary judgment

does not exist in a vacuum, and Starr cannot avoid its obligations under the subject insurance

policy predicated on its own desired narrative. As demonstrated at length below, Starr’s Motion

for Summary Judgment is merely a baseless attempt to deprive Cruz of the insurance coverage to

which it is entitled. Accordingly, Starr’s Motion must be denied.

This case involves the construction of a drilled shaft – a commonly used support structure

in the construction of bridges. Cruz contracted with the New York Department of Transportation

(“NYDOT”) to replace three bridges in Westchester, New York (“the Project”). The design-build

contract, along with the accompanying design plans, required Cruz to construct twenty drilled

shafts. Cruz purchased an all-risk Builder’s Risk policy insuring the subject Project from Starr –

at which time, Starr was provided with the NYDOT contract, and was aware that a central feature

the Project would be the construction of drilled shafts. The subject loss occurred when one of the

drilled shafts failed due to an undetected geotechnical site condition, requiring Cruz to incur

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significant costs to remediate the damage, along with costs to continue construction of undamaged

work. In total, Cruz sustained a loss of approximately $4.5 million.

Throughout discovery in this matter, Cruz witnesses testified that the structure they built,

that ultimately led to the loss, was a drilled shaft. Their testimony also explained the fundamental

differences between drilled shafts and other support structures, such as caissons. This testimony

was buttressed by Cruz’s expert, Michael Oakland, Ph.D., P.E., who concluded that loss involved

the failure of a drilled shaft. Nevertheless, despite all evidence to the contrary, Starr attempts to

convince this Court that it is entitled to summary judgment because the Policy’s Caisson Exclusion

serves to bar coverage for this claim. To support its argument, Starr listed each and every time the

term “caisson” was mistakenly used in the record. However, Starr exclusively relies on this error

in nomenclature to assert the applicability of the exclusion while simultaneously ignoring the

effusive evidence demonstrating that the property damage was sustained to a drilled shaft. To wit,

Starr has not produced any fact or expert witness to support its contention that the structure was

anything but a drilled shaft, and Starr’s reliance on the inadvertent use of the term “caisson” in

various documents serves only to demonstrate that a genuine issue of material fact exists.

Starr’s argument further defies logic - Starr is asserting that it issued, and Cruz purchased,

an all-risk Builder’s Risk policy that excludes the very core of the Project, the structural support

elements for the bridges. In short, Starr has not demonstrated that the Caisson Exclusion applies

because it cannot present undisputed facts to establish that the damage was sustained to a caisson

in the first instance. This is the very type of evidence that must be presented before a jury,

rendering summary judgment inappropriate.

Similarly, the record demonstrates that the loss was exactly the kind of fortuitous loss

expressly covered under the Policy. Starr’s own expert supports this conclusion, by virtue of his

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testimony that Cruz did nothing wrong in the construction of the subject drilled shaft.

Nevertheless, Starr argues that it is entitled to summary judgment pursuant to the Policy’s Cost

of Making Good (or “faulty workmanship”) Exclusion. Starr’s argument is predicated exclusively

on circumstantial logic that because an element of the project did not proceed as planned - that is,

because something went wrong with the subject drilled shaft - the cause must, therefore, be faulty

work. Starr, however, is unable to provide factual or scientific support for this conclusion. Starr’s

position fails for lack of evidence alone, as New York law plainly assigns the burden of proof in

this instance to Starr. Starr simply cannot demonstrate – as a matter of law - that the faulty

workmanship exclusion precludes coverage.

Finally, the evidence demonstrates that Contractor’s Extra Expense (“CEE”) coverage was

intended to be included in the Policy. CEE coverage pays for the increased costs to complete

construction of undamaged work and is an integral part of Starr’s standard form policy.

Significantly, the quote for the Policy – which included approximately twenty-four areas of

coverage that Starr intended to limit, along with a laundry list of exclusions - was silent on CEE.

The binder, a legally binding contract between the parties that precedes the formal issuance of the

Policy, also neglected to include any limitation of CEE coverage. These documents conformed to,

and confirmed, Cruz and Starr’s negotiations, where Cruz’s insurance brokers testified that Starr

always included CEE as industry standard coverage, and its inclusion in the subject policy was

never in question. Indeed, Starr’s adjuster for this claim testified that this case is the first time he

encountered a claim where any question arose regarding the inclusion of CEE in Starr’s standard

form policy.

Consistent with the binder, the quote, and industry standards, on the eve that the Policy

was issued to Cruz, Starr’s quality control department wrote to Starr’s underwriter advising that it

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was “giving coverage” for CEE. In response, Starr unilaterally and inexplicably crafted a

Declaration Page - with the CEE caption “Not Covered” - that it attached to the previously

negotiated and agreed upon standard policy form (which still included CEE). Notably, it was not

until two years after the subject loss that Starr, for the first time, denied coverage for Cruz’s impact

costs by alleging that Cruz “declined to purchase” CEE. The material facts reflect that this assertion

is demonstrably false.

In seeking summary judgment on Cruz’s CEE claim, Starr is asking the Court to disregard

the very documents it (Starr) generated to memorialize intent – the quote, binder, and its quality

control e-mail, along with the testimony of two third-party brokers and its own claims adjuster -

in favor of the words “Not Covered” that were surreptitiously entered into the Declarations Page

on the eve of the Policy’s issuance. Starr conveniently presents a simplistic narrative of this

dispute; however, Starr cannot ignore the material facts confirming that CEE coverage was

provided, which establishes a highly disputed factual issue rendering summary judgment

inappropriate.

Accordingly, and as set forth at length below, the existence of disputed material facts

precludes Starr’s ability to obtain judgment as a matter of law on any Count, and its Motion for

Summary Judgment must be denied in its entirety.

COUNTER-STATEMENT OF MATERIAL FACTS

A. The Insured Project
Cruz entered into a design-build contract with the New York State Department of

Transportation (“NYSDOT”) to replace three bridges in Westchester County, New York (the

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“Project”). 1 Hardesty & Hanover, LLC. (“H&H”) designed the Project, 2 and Hudson Valley

Engineering Associates, P.C. (“HVEA”) performed all construction quality control functions. 3 To

provide foundational support for the replacement bridges, the Project required the construction of

twenty (20) drilled shafts. 4

In July of 2017, H&H and Cruz submitted a Geotechnical Work Plan to NYSDOT, which

stated that “all structures… shall be supported on piles or drilled shafts” and that the “piers of the

Route 987D Bridges (550719 and 550739) are envisioned to be supported on drilled shafts used

as a single row bent type.” 5 H&H certified the design plans for the Project, which specifically

required the construction of drilled shafts. 6

B. The Subject All- Risk Builder’s Risk Policy
Cruz purchased a Construction All Risk Policy from Starr (the “Policy”). 7 The Policy is an

“all-risk” policy that covers all fortuitous losses to the Project, unless such losses are expressly

excluded. 8 The standard base form Policy expressly provides coverage for CEE. 9

Cruz procured the Policy through its brokers, McGriff Insurance Services (“McGriff”) 10

and Turner Surety and Insurance Brokerage (“TSIB”). 11 On March 17, 2017, McGriff requested a

quote for the Policy from Starr, and provided significant detail about the nature of the Project. 12

Starr’s underwriter, Douglas Leto, provided a quote. 13 On April 27, 2017, Hyland Knecht of

1
Defendant’s Exhibit 1, Complaint at ¶ 3.
2
Defendant’s Exhibit 2, Ozbek Dep. at 30:17-21.
3
Id. at 127:17-23.
4
Plaintiff’s Exhibit A, Design Plan Pier 719 (2/8/18); Exhibit B, Design Plan Pier 739 (2/8/18); Defendant’s Exhibit
1 at ¶4.
5
Plaintiff’s Exhibit C, Geotechnical Work Plan at SEDGWICK07380.
6
Plaintiff’s Exhibit A; Plaintiff’s Exhibit B.
7
Defendant’s Exhibit 12, the Policy.
8
Defendant’s Exhibit 12, the Policy at p. 12 at 52.
9
Id. at pg. 15 of 52.
10
Plaintiff’s Exhibit D, Kessler Dep. at 27:2-4.
11
Defendant’s Exhibit 13, Knecht Dep. at 139:19-25.
12
Plaintiff’s Exhibit E, Cruz Request for Quote at STARRUW01149
13
Id. at STARRUW01148; Plaintiff’s Exhibit F, Initial Quote.

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McGriff, the broker of record for the Project, provided Mr. Leto with a revised contract value and

requested an updated quote with $5 million limits. 14 That same day, Mr. Knecht provided the

Project’s design plans to Mr. Leto, which expressly provide that the Project was to be supported

by drilled shafts. 15 Mr. Leto provided a revised quote, which stated that the Policy would provide

coverage for “All-Risk of direct physical loss or damage” up to $5 million dollars “subject to its

proportion of the following limits, sublimits and aggregate limits….” 16 The quote also expressly

identified twenty-four specific areas of coverage subject to a sublimit, along with a list of

exclusions – together, representing Starr’s express intention to deviate from the otherwise standard

terms of its pro-forma builder’s risk policy form and narrow the scope of coverage available to

Cruz. 17 CEE – a foundational element of that standard form - was not included in this list 18

Based on the terms negotiated in the quote, McGriff instructed Starr to bind coverage, and

a binder was provided on June 9, 2017. 19 The binder is identical to the quote – there is no mention

of CEE or an intent to deviate from the standard form of coverage. 20

On August 16, 2017, two months after coverage was bound, Starr’s quality control

department confirmed that the Policy was “giving coverage” for CEE and sent an e-mail to Mr.

Leto inquiring about the applicable sublimit. 21 Despite a sublimit never having been discussed or

negotiated during underwriting, and despite no sublimit being identified in the quote or binder,

Mr. Leto instructed his assistant to add the words “Not Covered” in the Declarations Page under

14
Exhibit G, Cruz Request for Revised Quote at STARRUW01547
15
Plaintiff’s Exhibit H, Knecht April 27, 2017 Email at StarrUW01009. While the link to access the plans no longer
works, Starr was clearly in possession of the plans referring to the Project’s support structures as drilled shafts
because Starr produced them during discovery as part of its underwriting file. Plaintiff’s Exhibit I, Underwriting
Project Plans at STARRUW00063 et. seq.
16
Plaintiff’s Exhibit J, Revised Quote at STARRUW01553.
17
Id.
18
Id.
19
Plaintiff’s Exhibit K, McGriff Request to Bind Coverage at STARRUW01759
20
Plaintiff’s Exhibit L, Binder at STARRUW01766.
21
Plaintiff’s Exhibit M, Quality Control Email at STARRUW00702.

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the sublimits for CEE. 22 It is undisputed that Starr never contacted Cruz or its brokers regarding

this material, unilateral change in the Policy. 23

C. The Subject Loss at Pier 719
On or about March 20, 2018, Cruz began installation of the drilled shafts. 24 By mid-

November 2018, Cruz had successfully completed installation of seventeen drilled shafts without

incident. 25

Between November 13 and November 16, 2018, Cruz began constructing the eighteenth

drilled shaft on the Project (the “Subject Drilled Shaft”) for Pier 719. 26 Once construction of the

Subject Drilled Shaft was complete, routine testing of the concrete revealed anomalies. 27 Cruz was

required to replace the Subject Drilled Shaft with six micropiles (an alternative form of structural

support). 28 Cruz incurred significant costs both to directly remediate the drilled shaft

(approximately $604,620.44, or “Direct Costs”) and to complete construction of undamaged work

(approximately $3.7m or “Impact Costs”)(collectively the “Loss”). 29

D. Starr’s Investigation of the Loss and Subsequent Denial of Coverage
On December 20, 2018, McGriff reported the Loss to Starr on Cruz’s behalf (the

“Claim”). 30 On or about December 21, 2018, Starr retained field adjuster Keith Culley to

investigate the Claim. 31 After receipt of the loss notice and brief initial conversations with Cruz,

Mr. Culley began his investigation with a pre-determined conclusion that there was “a potential

22
Plaintiff’s Exhibit N, Singh Dep. at 43:12-45:2.
23
See Defendant’s Exhibit 13, Knecht Dep. at 129:5-14 and 136:15-137:7; Plaintiff’s Exhibit D, Kessler Dep. at
109:11-16.
24
Defendant’s Exhibit 1, Complaint at ¶ 5
25
Defendant’s Exhibit 1, Complaint at ¶ 6
26
Defendant’s Exhibit 2, Ozbek Dep. at 50:12-18.
27
Id. at. 51:2-15.
28
Id. at 64:18-65:21; Defendant’s Exhibit 10, Sheehan Dep. at 47:7-18.
29
Defendant’s Exhibit 2, Ozbek Dep. at 197:19-198:8.
30
Defendant’s Exhibit 16.
31
Plaintiff’s Exhibit O, Culley Dep. at 51:17-52:10.

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Origin and Cause issue with either pre-planning engineering, design of the casing.” 32 With the

assistance of Envista Forensic (“Envista”), Mr. Culley thereafter inspected the Project site in

January 2019 and reviewed various project documents provided by Cruz. 33

Over three months later, on March 6, 2019, Starr issued its first reservation of rights letter

which indicated that the Policy’s “Cost of Making Good” exclusion for defective work may apply

to the Loss. 34 Starr also requested additional documents from Cruz. 35

On June 17, 2019, six months into the investigation, Starr issued a second reservation of

rights letter, stating for the first time that the Policy’s “Piling, Sheet Piling & Caisson” exclusion

(“Caisson Exclusion”) may preclude coverage for the Loss. 36 Nevertheless, Starr continued to

request information from Cruz regarding the measure of the Loss. 37

On July 26, 2019, Terrance Zich, P.E., of Envista, Starr’s engineering expert, concluded

that the Loss was caused by the “site’s geologic media . . . combined with the high groundwater

flows from above average rainfall that resulted in the loss/movement of portions of the uncured

concreate out of the shaft.” 38 Mr. Zich testified that he could not identify anything that Cruz did

wrong to cause the Loss. 39 Additionally, Mr. Zich opined that Cruz’s remediation of the drilled

shaft was adequate. 40 After receiving Mr. Zich’s opinions, Mr. Culley continued to request

information regarding Cruz’s costs. 41

32
Id. at 60:2-63:7.
33
Id. at 50:3-5; 59:23-25; 87:23-25.
34
Defendant’s Exhibit 36.
35
Id. at STARR00705.
36
Plaintiff’s Exhibit P, June 17, 2019 Letter.
37
Defendant’s Exhibit 37.
38
Plaintiff’s Exhibit Q, July 26, 2019 Envista Report of Findings at ENVISTA00015 (emphasis added).
39
Plaintiff’s Exhibit R, Zich Dep. 98:8-22.
40
Plaintiff’s Exhibit Q, July 26, 2019 Envista Report of Findings at ENVISTA00015 (emphasis added)
41
Plaintiff’s Exhibit O, Culley Dep. 110:5-8.

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On November 18, 2019 - almost a year into the investigation and on the eve of a day-long,

in person meeting between the parties’ accounting experts to come to an agreement of a loss value

to be paid to Cruz - Starr provided a coverage position letter relying on the Caisson Exclusion as

a basis for not paying the Claim. 42

Subsequently, on May 12, 2020, approximately a year and half into its investigation, Starr

argued, for the first time, that CEE was not included in the Policy, positing that Cruz “declined to

purchase it.” 43

LEGAL ARGUMENT

I. STANDARD OF REVIEW

Starr’s Motion for Summary Judgment must be denied in its entirety because it cannot

satisfy the exacting standards for judgment as a matter of law. Indeed, “summary judgment is a

drastic remedy to be granted sparingly and only where no material issue of fact is demonstrated….”

Valente ex rel. Valente v. State, 2008 WL 482503 at *2 (Ct. Cl. 2008); C.P.L.R. § 3121(b). In

order to demonstrate its entitlement to summary judgment, Starr must establish “a prima facie

showing of entitlement to judgment as a matter of law, tendering sufficient evidence to

demonstrate the absence of any materials of fact.” Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324

(1986). It is axiomatic that “the motion shall be denied if any party shall show facts sufficient to

require a trial of any issue of fact.” C.P.L.R. § 3121(b). Moreover, when considering a summary

judgment motion, the court must view all facts “in the light most favorable to the non-moving

party.” Vega v. Restani Construction Corp., 18 N.Y.3d 499, 503 (2012).

42
Defendant’s Exhibit 29; Plaintiff’s Exhibit O, Culley Dep. at 156:8-22.
43
Plaintiff’s Exhibit S, May 5, 2020 Email from Starr’s Counsel at pg. 2 of 3.

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II. STARR IS NOT ENTITLED TO SUMMARY JUDGMENT OF CRUZ’S
BREACH OF CONTRACT CLAIM

A. Starr Cannot Prove Any Exclusion Applies

Starr’s Motion must be denied because it has not and cannot satisfy its “heavy burden” to

prove the applicability of any exclusion as a matter of law. Starr, as the movant herein, bears a

two-fold burden to demonstrate the absence of any material issues of fact and prove the exclusions

it relies on to deny coverage. Starr in unable to meet either burden.

The Policy is an all-risk policy which provides exceedingly broad coverage for all fortuitus

losses unless Starr can prove that a specific exclusion precludes coverage. Gurfein Bros., Inc. v

Hanover Ins. Co., 248 AD2d 227, 229 (1st Dept 1998). Starr bears a “heavy burden” to prove its

exclusions. Sea Ins. Co. v. Westchester Fire Ins. Co., 51 F.3d 22, 26 (2d Cir. 1995) (citations

omitted). Starr must demonstrate that the exclusion it relies on is “subject to no other reasonable

interpretation” and “is stated in clear and unmistakable language.” McCarthy v. New York Prop.

Ins. Underwriting Ass'n, 159 A.D.2d 961 (4th Dept. 1990). Any ambiguities in the policy language

must be construed against Starr and in favor of finding coverage. Trupo v Preferred Mut. Ins. Co.,

59 AD3d 1044, 1045 (4th Dept 2009). Moreover, exclusions “are not to be extended by

interpretation or implication but are to be accorded a strict and narrow construction.” Seaboard

Sur. Co. v. Gillette Co., 64 N.Y.2d 304, 311 (1984).

Here, Starr seeks to escape its obligations under the Policy by improperly relying upon the

Caisson Exclusion and the Cost of Making Good Exclusion. However, material facts at the very

core of these exclusions remain in dispute. i.e., whether the damaged property was a “caisson,”

and whether the loss was caused by faulty workmanship. The existence of disputed material facts

renders Starr’s Motion meritless.

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i. The Caisson Exclusion is Inapplicable.

As set forth above, the Project involved the construction of a drilled shaft – not a caisson.

The controlling documents - the Geotechnical Work Plan and Project plans – expressly required

the construction of drilled shafts. 44 Cruz’s witnesses clearly and consistently testified that what

they built was a drilled shaft. 45 This testimony is supported by the opinions of Dr. Michael

Oakland, Ph.D., P.E., an expert in foundation design and geotechnical investigations with over 32

years' experience, who has correctly concluded that the Loss involved a drilled shaft. 46 According

to Dr. Oakland, the term “caisson” refers to very large footings which are sunk into position by

excavating beneath a caisson structure. 47 A caisson is used to support much larger structures, like

the towers supporting the Brooklyn Bridge. 48 In contrast, a drilled shaft foundation is:

[F]ormed by excavating a hole, typically 3 to 12 ft. in diameter, inspecting the soil
or rock into which the foundation is formed, and constructing a cast-in-place
49
reinforced concrete foundation within the hole.

Dr. Oakland further explains that a caisson is constructed by sinking a large pre-formed

structure into place by excavating the ground underneath it, whereas a drilled shaft is constructed

by drilling a hole, installing a steel casing, and then pouring concrete. 50 Here, Cruz installed the

Subject Drilled Shaft by drilling a hole, installing a steel casing, and then pouring concrete into

the casing. 51

Starr cannot satisfy its burden to prove the application of the Caisson Exclusion as a matter

of law because it cannot satisfy an essential prerequisite – it has not, and cannot, demonstrate that

44
See Plaintiff’s Exhibit A; Plaintiff’s Exhibit B; Plaintiff’s Exhibit C; Plaintiff’s Exhibit I.
45
See Defendant’s Exhibit 10, Sheehan Dep. 35:21-36:6, See Defendant’s Exhibit 2, Ozbek Dep. 41:23-42:4;
109:21-110:25; Plaintiff’s Exhibit T, Affidavit of Dr. Michael Oakland ¶¶ 26-37.
46
Plaintiff’s Exhibit T, Affidavit of Dr. Michael W. Oakland at ¶ 6, 26.
47
Id. at ¶ 29.
48
Id. at ¶ 30.
49
Id. at ¶ 31 (emphasis added).
50
Id. at ¶ 29,32.
51
Id. at ¶ 33,32

16 of 30
FILED: NEW YORK COUNTY CLERK 12/09/2022 08:41 PM INDEX NO. 652321/2020
NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 12/09/2022

the damaged property was a caisson. Starr exclusively predicates its argument on the misuse of

the term “caisson” by Cruz employees. In making this argument, Starr ignores the abundant facts

in the record demonstrating that the damaged structure was a drilled shaft, along with the ambiguity

in its own Policy – it failed to define the term “caisson” in the first instance. Simply put, the

dispute of fact at the very core of this claim – the type of structure damaged – renders summary

judgment impossible.

Starr has presented no evidence that the structure was a caisson. Instead, Starr has

attempted to weaponize the inadvertent use of the term by unwitting Cruz employees, all while

ignoring the express testimony of Cruz’s President, Joseph Sheehan, and project manager, Kadir

Ozbek, who consistently and repeatedly testified that any references to “caissons” were simply a

mistake. 52 Mr. Sheehan testified that support structure was unequivocally “a drilled shaft.”53

Similarly, Mr. Ozbek testified that “[t]he bridge wasn't supported by caissons. It was supported by

drilled shafts.”54 Specifically – and consistent with Dr. Oakland’s opinions - Mr. Ozbek testified

that the Subject Drilled Shaft is “not a caisson…. [because] [c]aissons are much bigger structures

that have no place of use for a structure that we're dealing with, for the loads that are needed to be

carried here. It is not designed as a caisson. It is designed as a drilled shaft . . . It should have been

called … drilled shaft. 55 If Cruz’s mistaken use of the term “caisson” proves anything, it is that

there is a clear issue of material fact.

Finally, the Pol

Case Info

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Nancy M. Bannon Track Judge’s New Case

Case No.

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Document Filed Date

December 09, 2022

Case Filing Date

June 08, 2020

County

Parties

BREHONY, DAWN M Attorney for the Defendant
E.E. CRUZ & COMPANY, INC. Plaintiff
MANOBIANCA, STACY M. Attorney for the Plaintiff
NAGEL, ANNA Attorney for the Defendant
PODOLAK, GREGORY DAVID Attorney for the Plaintiff
ROCCO, CHARLES J Attorney for the Defendant
SMALL, BRYAN ANTHONY Attorney for the Plaintiff
STARR SURPLUS LINES INSURANCE COMPANY Defendant
VICERE, ASHLEY CHRISTINE Attorney for the Defendant
JOHN CHAMBERS Attorneys for Plaintiffs
STEFANI BONATO Attorney
MICHAEL ANGIULO Attorney
JONATHAN WOHL Attorney
STEPHANIE BARAN Attorneys for Defendants
THOMAS CAHILL Attorney
STEPHANIE BERSHAD Attorney

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Motion-Secondary: E.E. Cruz & Company, Inc. v. Starr Surplus Lines Insurance Company

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