EUGENE J. PAYOR VS. NEW JERSEY MANUFACTURERSINSURANCE COMPANY(L-4734-14, MONMOUTH COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0345-16T2

EUGENE J. PAYOR AND
JOANN WILCZYNSKI,

Plaintiffs-Appellants,

v.

NEW JERSEY MANUFACTURERS
INSURANCE COMPANY,

Defendant-Respondent.
______________________________

Submitted October 2, 2017 – Decided November 15, 2017

Before Judges Ostrer and Whipple.

On appeal from Superior Court of New Jersey,
Law Division, Monmouth County, Docket No. L-
4734-14.

Melissa Payor-Mackiewicz, attorney for
appellants.

Carton Law Firm, LLC, attorneys for respondent
(Michael J. Lynch, on the brief).

PER CURIAM
 Plaintiffs, Eugene Payor and Joann Wilczynski, appeal from

an August 12, 2016 order granting summary judgment in favor of

defendant, New Jersey Manufacturers Insurance Company.

We discern the following facts from the summary judgment

record. In February 2011, plaintiff Wilczynski noticed a shower

curtain rod had pierced the wall in her first-floor bathroom. She

called defendant to report the issue and a plumber to repair the

damage.

On March 1, 2011, defendant sent Tri-State Insurance

Adjusters, Inc., (Tri-State) to inspect plaintiffs' home. Tri-

State concluded a ruptured pipe underneath the first-floor

bathroom was the origin of the damage and confirmed water damage

to the interior of the home and to plaintiffs' personal property.

A few days later, a plumber arrived to fix the leak. Upon

removing the shower, several walls, and the flooring, the plumber

noticed the plywood underneath the floor was soaking wet and

rotted. He repaired the leaking pipes and left the area exposed

for Tri-State to further inspect.

On April 12, 2011, Tri-State retained Mark 1 Restoration,

Inc., (Mark 1) to investigate the damage. Mark 1's project manager

found visible mold spores on rotted plywood subflooring beneath

the first-floor bathroom and determined the source of the damage

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was a "probable diverter leak in the shower wall which softened

the wall causing the curtain rod to run through the wall."

After reviewing Mark 1's report, defendant determined

plaintiffs' additional damages were limited to $10,000 because of

a mold rider in their homeowners policy. Defendant issued

plaintiffs a $10,000 check for the mold damage in addition to

$9,944.53 for plaintiffs' damaged personal property.

On December 9, 2014, plaintiffs filed a complaint asserting

breach of contract and seeking declaratory relief that the $10,000

coverage limit in the mold rider did not limit their claim. Both

parties moved for summary judgment. On August 12, 2016, the trial

court denied plaintiffs' motion and granted defendant's cross-

motion for summary judgment.

Plaintiffs appeal, arguing genuine issues of fact precluded

summary judgment and the trial court misinterpreted the insurance

policy. Plaintiffs also assert their personal property claim

remains in dispute and public policy should favor the insured over

the insurer. We have considered these arguments in light of the

record and applicable legal principals and find them unpersuasive.

We therefore affirm.

I.

When we review a grant of summary judgment, we use the same

standard as that of the trial court. Globe Motor Co. v. Igdalev,

3 A-0345-16T2
225 N.J. 469, 479 (2016). A court should grant summary judgment,

"if the pleadings, depositions, answers to interrogatories and

admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact challenged

and that the moving party is entitled to a judgment or order as a

matter of law." Ibid. (citing R. 4:46-2(c)). The evidence must

be viewed in "the light most favorable to the non-moving party."

Mem'l Props., LLC v. Zurich Am. Ins. Co., 210 N.J. 512, 524 (2012).

Plaintiffs assert the mold rider does not limit recovery

because the homeowners policy is susceptible to differing

interpretations, which should be construed against defendant. In

interpreting an insurance policy, we "start with the plain language

of the policy and 'give the words their plain, ordinary meaning.'"

Hardy ex rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 101 (2009)

(quoting President v. Jenkins, 180 N.J. 550, 562 (2004)). "Even

exclusionary provisions are presumptively valid and will be given

effect if specific, plain, clear, prominent, and not contrary to

public policy." Id. at 102 (citations omitted). "In the absence

of any ambiguity, courts should not write for the insured a better

policy of insurance than the one purchased." Zacarias v. Allstate

Ins. Co., 168 N.J. 590, 595 (2001) (quoting Gibson v. Callaghan,

158 N.J. 662, 670 (1999)). If an ambiguity exists, it must be

resolved against the insurer. Di Orio v. N.J. Mfrs. Ins. Co., 79

4 A-0345-16T2
N.J. 257, 269 (1979). An ambiguity arises "where the phrasing of

the policy is so confusing that the average policyholder cannot

make out the boundaries of coverage." Lee v. Gen. Accident Ins.

Co., 337 N.J. Super. 509, 513 (App. Div. 2001) (citing Weedo v.

Stone-E-Brick, Inc., 81 N.J. 233, 247 (1979)). Here, there is no

ambiguity.

The homeowners policy in effect at the time of the incident

insured against loss to property from water as a result of damaged

plumbing, but specifically excluded mold or "fungi, wet or dry rot

or bacteria." The policy also included an anti-concurrent/anti-

sequential causation clause (sequential clause) applicable to the

policy's exclusions. The sequential clause excluded "fungi, wet

or dry rot or bacteria", regardless of any other cause or event

contributing concurrently or in any sequence to the loss. The

policy also contained a rider which gave back some excluded mold

coverage, on a limited basis up to $10,000.

The trial judge correctly applied the sequential clause to

plaintiffs' claim because the policy was written to provide

coverage for damage from the broken pipe, but expressly limited

additional recovery to $10,000 when an undetected leak caused mold

and rot. By combining the sequential clause and the mold

exclusion, the trial court reasoned plaintiffs' recovery was

restricted to the mold endorsement's limit of $10,000. We agree.

5 A-0345-16T2
 Sequential clauses resolve coverage issues, where two perils,

one covered and one excluded, contribute to cause one loss.

Sequential clauses are enforceable in New Jersey. See Simonetti

v. Selective Ins. Co., 372 N.J. Super. 421 (App. Div. 2004);

Assurance Co. of America v. Jay-Mar, Inc., 38 F. Supp. 2d 349

(D.N.J. 1998). Noting a lack of prohibition from the New Jersey

Supreme Court, the United States District Court for the District

of New Jersey found New Jersey would follow the majority rule that

sequential clauses are enforceable. Assurance, supra, 38 F. Supp.

2d at 354. In particular, the court stated "there is no violation

of public policy when parties to an insurance contract agree that

there will be no coverage for loss due to sequential causes even

where the first or the last cause is an included cause of loss."

Ibid. We endorsed the District Court's reasoning in Simonetti,

supra, 372 N.J. Super. at 431. Accordingly, we find the same

rationale applicable here.

Plaintiffs assert defendant had the burden of proving the

$10,000 mold exclusion applied and contend the trial court erred

because it allowed defendant to satisfy its burden by showing mold

was present, instead of showing it was the cause of the damage.

"The insurer has the burden of establishing application of an

exclusion." Cobra Prods., Inc. v. Fed. Ins. Co., 317 N.J. Super.

392, 401 (App. Div. 1998), certif. denied, 160 N.J. 89 (1999)

6 A-0345-16T2
(citing Hartford Acc. & Indem. Co. v. Aetna Life & Cas. Ins. Co.,

98 N.J. 18, 26 (1984)). Defendant submitted the Mark 1 report in

support of summary judgment and established the presence of mold

spores in the first-floor's plywood subflooring. Consistent with

the language of the sequential clause, defendant satisfied its

burden because mold was a concurrent part of the damage. We reject

plaintiffs' assertion that defendant had to show mold was the sole

cause of loss, or at least caused an increase in loss, for the

exclusion to apply.

Plaintiffs argue material facts exist as to the extent of

damage caused by the mold and whether the mold existed when the

damage was reported. Because the sequential clause applies and

defendant demonstrated, through the unrebutted Mark 1 report, mold

was a sequential part of the loss, there are no material relevant

facts in dispute.

II.

Plaintiffs argue their personal property claim remains in

dispute because the trial court did not consider it when granting

summary judgment for defendant. However, we are confined to the

summary judgment record and plaintiffs did not raise this argument

in opposing defendant's motion for summary judgment. Lombardi v.

Masso, 207 N.J. 517, 542 (2011) (citing Ji v. Palmer, 333 N.J.

Super. 451, 463-64 (2000)).

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 Any additional arguments introduced by plaintiffs are without

sufficient merit to warrant discussion in a written opinion. R.

2:11-3(e)(1)(E).

Affirmed.

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