27-35 Jackson Ave., LLC v. Samsung Fire & Marine Ins. Co.
| Decision Date | 10 September 2021 |
| Docket Number | DOCKET NO. A-2925-19 |
| Citation | 469 N.J.Super. 200,263 A.3d 200 |
| Parties | 27-35 JACKSON AVENUE, LLC, Plaintiff-Appellant, v. SAMSUNG FIRE & MARINE INSURANCE COMPANY, LTD., Defendant-Respondent. |
| Court | New Jersey Superior Court — Appellate Division |
Varcadipane & Pinnisi, PC, attorneys for appellant (Jeffrey William Varcadipane and Samuel S. Saltman, Paramus, on the briefs).
Fleischner Potash, attorneys for respondent (James P. Ricciardi, Jr., on the brief).
Before Judges Messano, Hoffman and Smith.
The opinion of the court was delivered by
MESSANO, P.J.A.D.
Plaintiff 27-35 Jackson Avenue LLC owned commercial property in Long Island City, New York. For no apparent reason, on January 8, 2015, a sprinkler head discharged water on the second floor of the premises that eventually damaged that floor and the one below. Plaintiff's principal tenant at the time was the United States General Services Administration (GSA), which, pursuant to a long-term lease, housed offices of the Department of Homeland Security at the property. Within days, GSA served written notice that it was terminating the lease because the premises were "untenantable." Plaintiff claimed to have lost millions of dollars in rent, including recoupment of the costs of improvements made to accommodate GSA's occupancy, because of the flood. It filed suit against the federal government in the United States Court of Federal Claims alleging breach of contract.1
Defendant Samsung Fire & Marine Insurance Co., Ltd., issued a commercial liability policy to plaintiff that was in effect at the time of the sprinkler mishap. Plaintiff secured the sprinkler head and made a claim under the policy.2 Defendant's subrogation counsel and claims adjuster engaged a professional engineer, Alan Fidellow, who inspected the premises and took possession of the sprinkler head. On March 2, 2015, subrogation counsel advised defendant that based on Fidellow's analysis, "there [wa]s no third party available for subrogation."
Approximately three weeks later, plaintiff's counsel notified defendant in writing that it should preserve any items removed from the premises "in their original condition and that no destructive testing, or any other testing that would alter these items, be performed." He advised that plaintiff intended to pursue any claims it might have "to recover for any portions of its loss not recoverable under the applicable insurance policies," and asked defendant "to preserve those items in their original condition for purposes of future litigation."
On May 20, 2015, defendant wrote plaintiff's counsel summarizing Fidellow's opinions and stating, In October, plaintiff's counsel wrote to defendant advising of the pending business interruption claim under the policy and requesting "access to the sprinkler head so that it may be examined by our expert." It was not until March 2016 that defendant's newly-assigned claims manager responded, writing that defendant did "not have in its possession any property that may have been taken from this risk" and specifically did not have the sprinkler head.
Plaintiff filed this complaint, alleging defendant intentionally or negligently lost or destroyed the sprinkler head, and plaintiff suffered damages as a result. Defendant filed its answer and discovery ensued, after which defendant moved for summary judgment. Plaintiff opposed the motion and cross-moved seeking "an [a]dverse [i]nference based on [d]efendant's spoliation of evidence."
After hearing oral argument, the Law Division judge reserved decision. She subsequently issued a written opinion in support of her order granting defendant's motion and dismissing plaintiff's complaint with prejudice. The judge subsequently denied plaintiff's motion for reconsideration, and this appeal followed.
When reviewing the grant of summary judgment, we limit our review to the record before the motion judge, Ji v. Palmer, 333 N.J. Super. 451, 463–64, 755 A.2d 1221 (App. Div. 2000), and apply the same standard that she did.
Globe Motor Co. v. Igdalev, 225 N.J. 469, 479, 139 A.3d 57 (2016). That standard mandates that summary judgment be granted "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." Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199, 129 A.3d 1069 (2016) (quoting R. 4:46-2(c) ). We owe no deference to the motion judge's legal analysis and "review issues of law de novo." The Palisades At Fort Lee Condo. Ass'n v. 100 Old Palisade, LLC, 230 N.J. 427, 442, 169 A.3d 473 (2017) (citing Zabilowicz v. Kelsey, 200 N.J. 507, 512, 984 A.2d 872 (2009) ). Relevant to this appeal is recognition that "[t]he practical effect of [ Rule 4:46-2(c) ] is that neither the motion court nor an appellate court can ignore the elements of the cause of action or the evidential standard governing the cause of action." Bhagat v. Bhagat, 217 N.J. 22, 38, 84 A.3d 583 (2014).
The motion record additionally reveals that after inspecting the sprinkler head, Fidellow eliminated the possibility that the discharge resulted from a fire or "freeze up." He noted that the building manager had not reported any ceiling stains in the area nor accidental impact injuries to the sprinkler head. Fidellow attributed some discoloration of the sprinkler head to its age, but he removed the heads of nearby sprinklers, and they did not exhibit similar discoloration. He said that "the pipe dope3 on the threads that were visible appeared to have aged more than other areas which could mean that the head had been existing or been reused."
Fidellow contacted the manufacturer which had discontinued the product in 2013; there had been no reported recalls. He concluded in a February 28, 2015 email:
When deposed, Fidellow said he "got rid of" the sprinkler head "a little bit later" but did not know the exact date. He had the head "for a couple of days ... maybe [until the] beginning of March [2015] ... when [he was] told to close the case." Fidellow had no protocol for preserving evidence, nor was he was ever notified that "there was an obligation to preserve this evidence."
Defendant's former claims manager testified at deposition that she received plaintiff's counsel's March 2015 letter requesting preservation of the sprinkler head and knew it was with Fidellow. She did not know he had discarded it or when.
Plaintiff retained Klas Haglid, P.E., who rendered his opinions "to a reasonable degree of engineering certainty." Haglid criticized Fidellow's inspection and opinion, noting he "did not consider corrosion." Haglid concluded it was "[m]ore likely than not" the potential cause of the sprinkler head's failure was a manufacturing defect, improper installation, or improper maintenance. However, "without the ... sprinkler for inspection," he was unable to determine the exact cause.
During his deposition, Haglid testified that Fidellow could have performed further evaluations on the sprinkler head, including a "chemical analysis, analysis of rust or debris, spectral analysis of the metallurgy and chemicals left on what would be left of the valve body." Although Haglid would not speculate that these would have led to a specific conclusion, he affirmed "that if [he] had the [sprinkler] valve body and [he] did some of these analyses[, he] would more likely than not reach a conclusion as to what caused it to discharge."4
We focus only on issues that arose during argument on the motion and plaintiff's cross-motion that are germane to the appeal. Defendant argued plaintiff was "unable to make out the proximate cause link that's necessary between [defendant's] conduct and [plaintiff's] supposed inability to prove what would have been viable claims against third parties."5 Plaintiff argued that even though the target of its potential lawsuit was a third-party and not defendant, a "negative inference" was appropriate based on defendant's failure to preserve the evidence. Plaintiff further contended that it had established defendant's spoliation of the sprinkler head proximately caused its inability to pursue a culpable third-party and recoup its losses not covered by defendant's policy.
In addressing count two of the complaint alleging negligent spoliation, the judge cited our analysis in Gilleski v. Community Medical Center, 336 N.J. Super. 646, 652–53, 765 A.2d 1103 (App. Div. 2001), and noted such a claim "require[d] a showing of a causal relationship between the evidence negligently destroyed or lost ... and plaintiff's inability to prove damages in other third-party claims." She concluded that because The judge likened plaintiff's argument to "an attempt to create a strict liability claim." She entered an order dismissing plaintiff's complaint.6
Plaintiff moved for reconsideration, asserting, among other things, that the judge should have held a Rule 104 hearing before concluding Haglid's opinion was a net opinion. It...
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