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Great Northern Insurance Co. v. Spiegel

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


August 7, 2008

GREAT NORTHERN INSURANCE COMPANY, PLAINTIFF,
v.
ISADORE SPIEGEL AND GEORGE LEONTARAKIS, DEFENDANTS, AND ISADORE SPIEGEL, THIRD-PARTY PLAINTIFF-APPELLANT,
v.
GEORGE LEONTARAKIS, THIRD-PARTY DEFENDANT-RESPONDENT, AND ROBERT W. DILL, COLONIAL OAKS CONSTRUCTION, INC., PREFERRED CONSTRUCTION, INC., JOSEPH M. MERCANDANTE, INC., R.A. KLISH, INC., H. SCOTT EXCAVATING, DAVID GUATARZ, THIRD-PARTY DEFENDANTS.

On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-5506-99.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted July 28, 2008

Before Judges Graves and Yannotti.

Third-party plaintiff Isadore Spiegel appeals from an order entered on August 24, 2007, which granted summary judgment in favor of third-party defendant George Leontarakis. For the reasons that follow, we reverse.

Spiegel and Leontarakis are the owners of adjacent properties in Millburn, New Jersey. Spiegel made a claim under a homeowner's insurance policy issued by Great Northern Insurance Company for certain damage to Spiegel's property which allegedly was caused by the loss of lateral support that occurred when excavation work was performed on Leontarakis's property.

It appears that Leontarakis had planned to construct a new home on his property, and he hired architect Robert Dill to design the structure. Dill also served as general contractor for the project. Dill retained Colonial Oaks Construction, Inc. to perform the construction work. Colonial retained Preferred Construction, Inc. to do the masonry work, and Preferred hired David Guatarz to excavate the site. After the excavation was completed, soil supporting a brick privacy wall on Spiegel's property slid into the basement excavation. Although an effort was made to shore up the wall, it collapsed onto Leontarakis's property.

Great Northern filed an action against Spiegel and Leontarakis, seeking a declaratory judgment as to its coverage obligations under the Spiegel's homeowner's insurance policy. Spiegel thereafter filed a third-party claim against Leontarakis, Dill, Colonial, Preferred Construction, and certain other parties, for the property damage caused by the excavation. Prior to trial, Spiegel settled its claim against Great Northern.

Spiegel's claims against Leontarakis, Dill, Colonial Oaks, and Guatarz went to trial.*fn1 Spiegel alleged that the loss of lateral support caused extensive damage to the brick privacy wall, his home, an in-ground swimming pool, the pool patio, the walkways, and the front steps. Spiegel's expert testified that the total cost to repair the damage was $925,874, which included $366,600 to replace the brick privacy wall.

After Spiegel had presented his case, the trial judge entered a directed verdict in favor of Leontarakis, finding that there was no evidence that Leontarakis was negligent and he could not be liable for any negligence on the part of his contractors. Thereafter, Spiegel reached settlements with Dill, Colonial Oaks, and Guatarz and received $112,500.

Spiegel appealed the dismissal of his claims against Leontarakis. While the appeal was pending, Speigel's property was damaged by fire. Spiegel's fire insurance carrier paid him $2,478,787.13 for the structural damage to the home, $1,470,000 for the contents of the home, and $180,000 for the bar, table, and pool.

We held that the trial judge erred by dismissing Spiegel's claims against Leontarakis because Leontarakis had a non-delegable duty under N.J.S.A. 46:10-1 to provide lateral support to Spiegel's property and a reasonable jury could find that he breached that duty. Great Northern Ins. Co. v. Spiegel, 387 N.J. Super. 583, 594-95 (App. Div. 2006). We remanded the matter to the trial court for further proceedings. Id. at 597.

The parties agreed that the only claim remaining on remand was the claim for the damage to the brick privacy wall. Because his expert on damages died while his appeal was pending, Spiegel retained a new expert, who opined that the cost to replace the damaged brick privacy wall was $350,000.

On April 11, 2007, Leontarakis filed a motion for summary judgment. He argued that, because Spiegel had received sufficient monies to cover the cost to replace the brick privacy wall, Spiegel was barred from obtaining a double recovery on his claim.

By letter dated August 17, 2007, the judge asked Spiegel's attorney to identify the property damage items for which Spiegel was seeking recovery and the amount of the claimed damages for each item. The judge also asked Spiegel's counsel to identify the items that had "been compensated for, either in whole or in part, by insurance proceeds."

Spiegel's attorney responded in a letter dated August 22, 2007, in which he stated that Spiegel was only seeking damages regarding the brick privacy wall. He noted that his expert had estimated that it would cost $350,000 to rebuild the wall. Counsel also stated that Spiegel had received a total of $275,000 from the settling defendants and his homeowner's insurance carrier.

The judge considered the motion on August 24, 2007. The judge found that Spiegel failed to present sufficient evidence to show that he would not be receiving a double recovery for the damage to the brick privacy wall. The judge noted that Spiegel had received $275,000 from the other defendants and the homeowner's insurance carrier and more than $2.4 million for structural damage as a result of the fire. The judge stated: a claimant is not entitled to a double recovery and [it is] incumbent on the claimant to demonstrate albeit by inference or by competent evidence on this motion that its present cause of action as it pertains to the so-called privacy wall has not been encompassed by, allocated by, or reimbursed by any of the proceeds of the insurance . . . [that Spiegel has received].

Clearly, [Leontarakis] is unable to . . . provide the Court with that rather significant information that would defeat what might otherwise be deemed to be a cause of action in which there may be a double recovery for the same harm caused to the . . . privacy wall.

The judge concluded that Spiegel failed to present sufficient evidence to raise a genuine issue of material fact as to his entitlement to recover damages for the privacy wall and therefore granted Leontarakis's motion for summary judgment. The judge entered an order dated August 24, 2007, which memorialized his decision. This appeal followed.

Spiegel argues that the trial judge erred by granting summary judgment in favor of Leontarakis. Spiegel asserts that there is a genuine issue of material fact as to whether he has been compensated for the brick privacy wall, either by way of the settlements with the other defendants or the fire insurance carrier.

In response, Leontarakis argues that, wholly aside from the fire insurance proceeds, Spiegel has already been paid more than the $350,000 that Spiegel's expert estimates is required to replace the privacy wall. Leontarakis asserts that an award of additional compensation would be a double recovery for the damage to the privacy wall. Leontarakis also asserts that the fire insurance proceeds represents a double recovery for damage to the privacy wall.

In reviewing an order granting summary judgment, we apply the same standard that is applied by the trial court. Prudential Prop. Ins. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Summary judgment may issue when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. R. 4:46-2(c). In deciding whether a genuine issue of material fact exists, the court must determine "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

We are convinced that the trial judge erred by granting Leontarakis's motion for summary judgment. Here, the undisputed facts are that Spiegel had asserted claims at trial for $925,874, which included $366,600 for the damage to the brick privacy wall. After the appeal, the only claim remaining was the claim for the damage to the privacy wall, which was then estimated to be $350,000. It is undisputed that Spiegel received $275,000 from his homeowner's insurance carrier and the other defendants.

Thus, contrary to Leontarakis's assertion, Spiegel did not receive in this litigation sufficient monies to fully address his claim for the damage to the privacy wall. Moreover, based on the undisputed facts, it is reasonable to infer that the monies paid by the homeowner's insurance carrier and the settling defendants were to resolve all of Spiegel's claims, not simply his claim for damage to the privacy wall.

Therefore, on this record, there is no basis for allocating the entire $275,000 that Spiegel received in the litigation to his privacy wall claim. In the absence of some evidence to the contrary, it is fair to assume that about 40% of the $275,000 received by Spiegel was for the damage to the privacy wall since, at the time those monies were paid, the claim for the privacy wall was about 40% of his entire claim.

Moreover, even if we assume that the entire $275,000 received by Spiegel was for the damage to the privacy wall, that amount is not sufficient to cover the $350,000 in damages claimed by Spiegel. At the very least, Spiegel would still have a claim against Leontarakis for $75,000.

The record also does not provide a basis for allocating any of the proceeds from the fire insurance policy to Spiegel's claim for damage to the privacy wall. As we stated previously, the fire insurance carrier paid $2,478,787.13 for structural damage to the premises. That amount was based on the report of adjuster Jason Lombardo, dated January 12, 2005.*fn2 However, according to Lombardo's report, the $2,478,787.13 does not include any damage to the privacy wall.

Furthermore, although the fire insurance carrier paid Spiegel an additional $180,000 for certain other structural damage, Lombardo states that these monies were paid to Spiegel for damages to his decorative bar, table, and in-ground pool. Based on this evidence, an inference could be drawn that none of the fire insurance proceeds were paid for damage to the privacy wall or its replacement.

In addition, it is undisputed that the fire damage was an event separate and apart from the excavation damage. We must assume that the fire insurance proceeds would be paid to cover damages caused by fire, not damages caused by the excavation on Leontarakis's property. In any event, there is no evidence that the fire insurance carrier paid for fire damage to the brick privacy wall, nor is there any evidence that the fire insurance proceeds included any monies to re-build the wall.

Because there are genuine issues of material fact as to whether Spiegel had been fully compensated for the damage to the brick privacy wall, and because Leontarakis failed to show that he was entitled to judgment as a matter of law, the order granting Leontarakis's motion for summary judgment must be reversed.

Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.


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