Watertown judge rules insurer liable for submerged vehicle recovery [Watertown Daily Times, N.Y.]

July 28--Watertown City Court Judge Eugene R. Renzi has ruled that insurance carriers can be liable for removal and cleanup costs for vehicles that break through ice and end up submerged in water.

Watertown attorney H. Charles Livingston Jr. brought a small-claims action against Nationwide Insurance in an attempt to be reimbursed $6,465 for costs to retrieve his 2012 John Deere Gator from the St. Lawrence River in February. Mr. Livingston's son was operating the all-terrain vehicle when it broke through ice and sank.

According to court documents, Mr. Livingston called state Department of Environmental Conservation officials as he drove to the accident scene on the day it happened and was told that "he had a short time to act to get the Gator out of the river."

He contacted Hunt Underwater Specialties, Watertown, which assessed the situation and determined that a small amount of oil had leaked from the vehicle, although the longer it remained submerged, the greater the chance of more leakage. The ATV was removed two days later.

On the day after the accident, Mr. Livingston contacted his insurance agent, who testified at a bench trial that she never told him removal costs were covered under his policy. Ultimately, his claim was denied because he was not being sued by anyone over the damage and there were no third-party damages being claimed, meaning Mr. Livingston was not insured for the removal costs, according to the company.

Mr. Livingston countered that his quick actions had mitigated further damage, contending that had he not removed the ATV, the DEC would have, likely at far greater expense and that Nationwide would have been obligated to pay that third-party claim.

Judge Renzi agreed, citing state Navigation Law that held Mr. Livingston liable for the vehicle's removal and cleanup costs. He said that Mr. Livingston "acted responsibly" and in accordance with the law's intent by removing the Gator promptly.

Turning to the language in Mr. Livingston's coverage policy, the judge said he found no reference to damages being limited only to actions brought by a third party and, if that was Nationwide's intent, "it had an obligation to express that in clear and unmistakable language."

He said that, even though DEC did not take action against Mr. Livingston, Nationwide "clearly would have been liable to the State for the expenses incurred had Mr. Livingston not done what he did." Judge Renzi said that for the company not to cover the costs would be a breach of the policy.

"In addition, it would put policyholders in the recognized untenable position of having to either thwart the Navigation Law's goal of prompt cleanup of threats to navigable waters, or forfeit the insurance coverage maintained for such circumstances," Judge Renzi wrote in decision issued Monday.

He awarded Mr. Livingston a $5,000 judgment, the maximum recoverable in a small-claims case.

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