Expert Needed to Prove Amount of Property Damage for Fire Loss

Plaintiff V&C Liquors, Inc. made a claim against PSE&G for fire damage to its Newark liquor store. At trial, PSE&G was found 100% liable by the jury and V&C was awarded $200,000 for property damage and $14,700 for lost rent. The trial court judge had permitted V&C’s principal to testify to the amount of the contractor’s $200,000 proposal to repair the fire damage. The issue before the Appellate Division in Van Doimen v. V&C Liquors, Inc., 2018 N.J. Super. Unpub. LEXIS 1894 (App. Div. Aug. 10, 2018) was whether the trial court made a mistake in permitting V&C’s principal to testify to the amount of the damage or whether plaintiff needed an expert to establish the amount of its damages.

V&C owned a three-story wood frame building in Newark, where it operated a liquor store on the first floor and rented out the apartments on the upper floors. In October 2011, its building was damaged by fire. It alleged that the fire occurred because the PSE&G transformer malfunctioned, which caused arcing along cables and wires that ignited the siding on the building. At trial, a jury agreed and found PSE&G’s negligence to be the sole cause of the fire.

The jury awarded $14,700 for lost rent and $200,000 for the fire damage to the building. The amount of the lost rent was not challenged. However, PSE&G challenged the competency of V&C’s proofs for the cost to repair the fire damage. V&C did not have a contractor testify as to the amount of the damage. The plaintiff had hired an engineer who inspected the building and then a contractor gave him a proposal to make the repairs, which cost was $200,000. The court permitted the plaintiff’s principal to testify to the bid, over the objection of defense counsel. PSE&G alleged that the court erred by permitting hearsay evidence, i.e. the contractor’s proposal to repair the fire damage, through the testimony of the plaintiff’s principal.

PS&EG argued that the admission of the contractor’s proposal through the plaintiff’s principal was inadmissible hearsay. Further, because the contractor did not testify, without the admission of this hearsay evidence, the plaintiff failed to meet its burden of proving its damage claim.

The Appellate Division agreed with the trial court’s post-verdict decision that it made a mistake when it permitted the plaintiff’s principal to testify to the amount of the proposal. Instead, an expert witness from the construction company who prepared the estimate should have testified. However, because V&C relied upon the court’s ruling that it could introduce this evidence through the testimony of its principal, the Court found that dismissal was not the appropriate remedy. Rather, the appropriate remedy was the grant of a new trial on the damage issue. Hence, the matter was reversed for a new trial on the issue of compensation to which the plaintiff was entitled as the result of fire damage to its building.

Tags: fire damage