Homeowners can seek reimbursement for damages for loss of use and inconvenience due to fire damage caused by third parties

The Appellate Division, in Certain Underwriters at Lloyds Subscribing to Policy PLH-0013397, as subrogee of Laura Lindsey v. Public Service Electric & Gas, A-4128-17T4 (insert link), recently ruled that parties could seek damages beyond repair costs, lodging and other incidental expenses when they are displaced from their homes due to a third-party’s negligence. The matter, which consisted of multiple consolidated cases, involved fire damage caused to homes when a high-voltage power line owned by Defendant Public Service Electric and Gas (“PSE&G”). The falling of the lines was allegedly caused by a winter storm. The plaintiff homeowners were forced from their homes for approximately ten (10) months due to the damage caused by the fires. The homeowners’ insurance companies reimbursed them for their repairs, as well as incidental expenses and lodging. However, they brought suit against PSE&G for the damages related to the loss of use of their homes, emotional distress, and personal injuries.

In a bifurcated trial, PSEG was found liable for the actual occurrence of their lines causing the fire. However, it successfully moved for summary judgment. The trial court agreed with its arguments that that compensation provided by the plaintiffs’ insurance carriers was sufficient, and the plaintiffs did not suffer any damages beyond what was compensated. The plaintiffs disagreed and appealed, arguing that the trial court erred in not considering its damages related to the loss of use of their properties and inconvenience.

The issue before the Appellate Division was whether the plaintiffs’ damages were limited to those previously reimbursed by their carriers, or whether they could pursue additional damages for their loss of use and inconvenience. In agreeing with the plaintiffs’ arguments, the Appellate Division applied its holding in Camaraza v. Bellavia Buick Corp, 216 N.J. Super. 263, 265 (App. Div. 1987), which involved the loss of use of a motor vehicle. In that matter, the Appellate Division held that the motor vehicle owner’s damages were not limited to the cost of renting a replacement. The Carranza Court noted that the motor vehicle owner, “may be prevented from engaging in normal recreational pursuits or his enjoyment of those pursuits may be diminished,” and “that such inconveniences caused by the wrongful conduct of a tortfeasor are compensable.” Id. at 267. It further held the following:

The degree of inconvenience for loss of use of an automobile will vary depending upon the individual circumstances of the plaintiff. Indeed, if a plaintiff were hospitalized for the entire time required to repair his automobile, there very well may be no inconvenience from loss of use of the vehicle. On the other hand, another person may suffer very severe personal deprivations from loss of use of a personal automobile. We conclude that the trier of fact should be permitted to consider the individual circumstances of a plaintiff in determining loss of use damages. Therefore, while the rental value of a substitute vehicle may be admitted as evidence of loss of use damages, it is not conclusive and the trier of fact also may consider other evidence of such damages. Id. at 268.

Considering the theories outlined in Carranza, the Appellate Division in the subject matter, extended them to the loss of real property. It marked that, despite being provided reimbursement for their lodging, repairs and incidental expenses, the plaintiffs “did not foreclose their right to seek other damages resulting from the loss of the use of their homes or any other reasonable damages caused by the inconvenience.” Further citing Carranza, the Court noted that damages, in such a situation, “are not limited to pecuniary losses in such circumstances were not limited to the pecuniary losses which are capable of precise measurement.” Carranza, 216 N.J. Super. at 268. The Court further considered many of the individual plights of the plaintiffs, which included multiple moves, the need for special accommodations for the elderly, and hardships during the holidays, and being without items of sentimental value which could be introduced as evidence of the damages they suffered. In remanding the case back to the trial court, the Appellate Division stated that PSE&G could argue that the damages sought could show “more than fair indemnity" or might be "so extravagant" as to "outrun the bounds of reason." Brooklyn E. Dist. Terminal v. United States, 287 U.S. 170, 176 (1932).

Francis J. Leddy, Jr. Esq.July 20, 2019