Homeowners Displaced Due to Fire May Seek Damages Based Upon Inconvenience Due to Loss of Use of Home

In the published decision of Certain Underwriters at Lloyds Subscribing to Policy PLH-0013397, as subrogee of Laura Lindsey v. Public Service Electric & Gas, 2019 N.J. Super. LEXIS 88 (App. Div. June 17, 2019), the Appellate Division decided whether homeowners who were displaced due to a fire caused by Public Service Electric & Gas were limited to the cost of alternate shelter or whether the homeowners may also seek additional damages based upon their inconvenience due to the loss.  There were seven consolidated cases, all brought against Public Service Electric & Gas (“PSE&G”), in which a jury found PSE&G liable for the occurrence that caused the loss.  Thereafter, the issue remained whether the homeowners were entitled to any additional damages for the loss of use of their property or their inconvenience beyond the cost of alternate shelter during their period of displacement.

These claims arose from a winter storm in February 2014 when a high voltage powerline in Willingboro belonging to PSE&G fell and ignited fires in plaintiffs’ homes.  As a result, they were displaced from their homes for 10 months. The plaintiffs all filed suit against PSE&G.  While their homeowners’ insurance companies reimbursed the plaintiffs for their repair costs and the incidental expenses generated by their extended stays in motels during their displacement, they were not paid for damages due to the loss of use of their homes, emotional distress, and personal injuries. The plaintiffs did consent to a dismissal of all but the loss of use claim.

The trial court bifurcated the issues and, first, PSE&G’s liability was considered. After a jury found PSE&G liable for the occurrence, PSE&G then moved for summary judgment.  It argued that the plaintiffs were undamaged beyond the compensation provided by their insurers. The trial court judge agreed and granted PSE&G’s motion, dismissing the complaints. 

Thereafter, this appeal ensued.  The plaintiffs argued that the trial court judge erred in concluding that they were not entitled to damages for the loss of use of their property or their inconvenience.  In this published Appellate Division decision, the Court agreed with the plaintiffs that they were entitled to further pursue these claims.

The Court concluded that the mere fact that plaintiffs were provided motel rooms and reimbursed meal and transportation costs by their homeowner insurance companies “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.”  The Court noted that damages in such circumstances were not limited to the pecuniary losses which are capable of precise measurement.

The Appellate Division rejected PSE&G’s argument that the plaintiffs’ inconvenience claims were not adequately supported.  The Appellate Division noted some of the plaintiffs’ claims included having to move on multiple occasions, being without personal items of sentimental value for one of the plaintiffs who died prior to trial, having to give birth prematurely to a child during the time of the displacement, generating further inconvenience during the baby’s lengthy hospitalization.

Other plaintiffs described how they were stuck depending on fast food chains for meals because their motel lacked a full service kitchen.  Another plaintiff attempted to replicate her prior existence by buying kitchen appliances but claimed it was not the same.  One of the homeowners claimed that his sleep was affected.  All of the plaintiffs “claimed that they expended time and incurred additional expenses uncovered by insurance when periodically traveling to check on their homes.”

The Court noted that PSE&G could argue that all of these damages may represent “more than fair indemnity” and may be “so extravagant” that they would be beyond the bounds of reason.  However, the Appellate Division held that the plaintiffs would be able to pursue their claims but expressed no view on the compensability of their damages.  The Court stated that would be for a jury to decide.             

Hence, the Appellate Division reversed the summary judgment in favor of PSE&G and the matter was remanded for trial for a jury to decide how much additional damages the plaintiffs may be entitled for such claims.