{"id":885991,"date":"2015-12-09T12:07:39","date_gmt":"2015-12-09T19:07:39","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=885991"},"modified":"2015-12-09T12:07:39","modified_gmt":"2015-12-09T19:07:39","slug":"new-jersey-court-rejects-theory-of-spoliation-by-encouragement","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/new-jersey-court-rejects-theory-of-spoliation-by-encouragement\/","title":{"rendered":"New Jersey Court Rejects Theory of Spoliation by Encouragement"},"content":{"rendered":"<p>Richard C. Bennett | Cozen O&#8217;Connor | November 24, 2015<\/p>\n<p>Three years out, Superstorm Sandy litigation continues to wend its way through New Jersey\u2019s courts.\u00a0 Last weekend, a federal judge in the state handed a victory to the insurer in\u00a0<em>Stiso v. State Farm Fire &amp; Cas. Co.<\/em>, 2015 U.S. Dist. LEXIS 155762, 2015 WL 7296081 (D.N.J., Nov. 18, 2015).\u00a0 In doing so, the court reaffirmed the enforceability of what it called anti-concurrent causation (ACC) \u201clead-in\u201d language.\u00a0 It also rejected the doctrine of \u201c<a href=\"https:\/\/www.myconstructionexpert.com\/blog\/hurricane-sandys-impact-on-construction-defects-and-the-transition-process\/\" target=\"_blank\">spoliation based on encouragement<\/a>\u201d \u2013 the policyholders had argued that they could not meet the burden of showing that all of their loss was caused by a covered peril because the carrier had \u201cactively encouraged\u201d them to begin repair early on and thereby \u201cpersuaded\u201d them to destroy evidence that they subsequently needed.<\/p>\n<p>The insureds owned a split-level home in Point Pleasant Beach.\u00a0 The structure was two-and-one-half blocks from the Atlantic, and it was inundated when Superstorm Sandy struck on October 29, 2012; water lines inside the home were four-and-one-half feet high on the lower level and 12\u201d high on the upper story\u2019s walls.\u00a0 The policyholder made clam for $154,186.<\/p>\n<p>The contract of insurance excluded <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/reasonable-investigation-water-loss-requires-using-tools-find-damage\/\" target=\"_blank\">water damage<\/a> if it was the result of an external flood or water or sewage entering through sewers or drains outside of the building, and that provision was prefaced by an ACC clause.\u00a0 There was coverage, however, if the water damage was occasioned by water from the plumbing system inside of the home\u2019s interior or by overflow from a system designed to remove subsurface water around the foundation.\u00a0 The insurer and its expert determined that no more than 6\u201d of the water was backup from the lower level bathroom drains, and it refused to pay more than $47,709.\u00a0 The insureds argued that all of the flooding was caused by \u201ca massive backup of sewer and flood waters within the [p]roperty,\u201d and they filed suit.<\/p>\n<p>On November 18th, Judge Freda Wolfson granted the carrier\u2019s motion for <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/federal-court-in-texas-grants-insurers-summary-judgment-on-water-damage-exclusion\/\" target=\"_blank\">summary judgment<\/a>.\u00a0 The court held that under New Jersey law, the ACC language meant that the policyholders had to demonstrate that the covered peril of sewer backup \u201cdirectly, and solely, caused the damage.\u201d\u00a0 If the loss was \u201cconcurrently caused by both flooding and overflow water from the premises\u2019 drainage system,\u201d there was no coverage, and the court held that the insureds had not met their burden of showing that there was a genuine issue of material fact that all of the damages were indeed occasioned by sewer backup.<\/p>\n<p>In an effort to salvage their case&#8230;<\/p>\n<p><a href=\"http:\/\/www.lexology.com\/library\/detail.aspx?g=e82cda64-d8cb-40d9-b316-90b71b3d210f&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+General+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2015-11-27&amp;utm_term=\" target=\"_blank\">To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Richard C. Bennett | Cozen O&#8217;Connor | November 24, 2015 Three years out, Superstorm Sandy litigation continues to wend its way through New Jersey\u2019s courts.\u00a0 Last weekend, a federal judge in the state handed a victory to the insurer in\u00a0Stiso v. State Farm Fire &amp; Cas. Co., 2015 U.S. Dist. LEXIS 155762, 2015 WL 7296081&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/new-jersey-court-rejects-theory-of-spoliation-by-encouragement\/\">Continue reading <span class=\"screen-reader-text\">New Jersey Court Rejects Theory of Spoliation by Encouragement<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[3],"tags":[8968,8901,496],"class_list":["post-885991","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-spoliation","tag-summary-judgment","tag-water-damage","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>New Jersey Court Rejects Theory of Spoliation by Encouragement - Advise &amp; Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/new-jersey-court-rejects-theory-of-spoliation-by-encouragement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New Jersey Court Rejects Theory of Spoliation by Encouragement - Advise &amp; Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Richard C. Bennett | Cozen O&#8217;Connor | November 24, 2015 Three years out, Superstorm Sandy litigation continues to wend its way through New Jersey\u2019s courts.\u00a0 Last weekend, a federal judge in the state handed a victory to the insurer in\u00a0Stiso v. State Farm Fire &amp; Cas. Co., 2015 U.S. Dist. 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Bennett | Cozen O&#8217;Connor | November 24, 2015 Three years out, Superstorm Sandy litigation continues to wend its way through New Jersey\u2019s courts.\u00a0 Last weekend, a federal judge in the state handed a victory to the insurer in\u00a0Stiso v. State Farm Fire &amp; Cas. Co., 2015 U.S. Dist. 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