August 5, 2009
ROBERT DOOLITTLE AND CYNTHIA DOOLITTLE, PLAINTIFFS-APPELLANTS,
NEW JERSEY NATURAL GAS, J.F. KIELY CONSTRUCTION CO., DEFENDANTS-RESPONDENTS, AND SENECA INSURANCE CO., INC.,*FN1 DEFENDANT.
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-4002-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued June 1, 2009
Before Judges Reisner and Sapp-Peterson.
Plaintiffs, Robert and Cynthia Doolittle, appeal from the involuntary dismissal of their complaint against defendants, New Jersey Natural Gas (NJNG) and J.F. Kiely Construction Company (Kiely). In the complaint, plaintiffs alleged that defendants' negligence proximately caused damage to their property. On the eve of trial, defendants filed an in limine motion seeking the dismissal of plaintiffs' complaint on the basis that plaintiffs could not produce, at trial, any admissible evidence of damages they sustained as a result of defendants' negligence. The trial court agreed and dismissed the complaint with prejudice. Because we conclude that expert testimony was required to establish the appropriate measure of damages, and plaintiffs did not intend to produce such expert testimony, the trial court properly dismissed the complaint with prejudice.
The salient facts are largely undisputed. Plaintiffs own property located at 72 Main Street (the property) in Manasquan, which they purchased in 1982. A mixed use, commercial and residential structure was located on the property. In May 2004, Kiely and NJNG performed excavation, repair and installation work on Main Street. According to plaintiffs' engineer, during the course of this work, Kiely cut a drainage pipe in the area near the southeast corner of the property. As a result, "[t]his allowed water from local storm flooding and adjacent building roof drainage to back flow and outfall below the swale slab causing the saturation of the soil against the foundation wall" of plaintiffs' property. Additionally, the expert opined that Kiely improperly replaced a swale slab near the southeast corner of the property. The improper installation of the swale slab allowed "ponding to occur . . . and saturate the soil against the foundation wall."
Several months after this excavation, repair and installation was completed, Manasquan was hit with a torrential rainfall on September 28. The rainfall was believed to be a remnant of Hurricane Jean. On that same date, the eastern basement wall of plaintiffs' property collapsed. Additional damage included buckled floors upstairs, water damage, and partially falling support beams. The next day, borough officials issued a "NOTICE OF IMMINENT HAZARD," ordering plaintiff to "[i]mmediately correct the above noticed imminent hazards so as to render the structure temporarily safe and secure or [d]emolish the above structure by Oct[ober] 15, 2004."
Shortly thereafter, plaintiffs' insurer, Seneca Insurance Company, assigned a representative to inspect the property, along with a representative from an engineering company. Seneca advised plaintiffs that the estimated cost to repair the structure was $22,165, while the replacement cost of the structure was valued at $310,000. It ultimately denied coverage in accordance with the terms of the insurance policy. Plaintiffs demolished and rebuilt the structure.
In granting defendants' in limine motion, Judge Daniel M. Waldman stated:
Diminished value or cost to repair are the two theories advanced as [the] measure of damages in building structure cases. 525 Main Street Corp. v. Equal Roofing [Co.], 34 N.J. 251 (1961). The theories are used to avoid economic windfall to plaintiffs. Correa v. Maggiore, 196 N.J. Super. 273 (App. Div. 4).
As to cost to repair as the measure of damages, the cost to replace is the cost of replacing the damage that occurred to the structure. Costs that exceed the original value would constitute economic waste. Perth Amboy Iron Works v. [Am.] Home [Assurance Co.], 226 [N.J.] Super. 200 (App. Div. 1988)[, aff'd o.b., 118 N.J. 249 (1990).]
Here, however, to be sure, the issue is whether the cost to repair was to repair the foundation, the foundation wall that was damaged, or whether the cost to repair was to demolish the building and rebuild a new structure.
No admissible evidence and surely no expert testimony . . . has been presented in this case or will be presented in this case which will address the need to demolish and rebuild the structure as a matter of damage law. And no testimony can be proffered to prove as to cost to repair the foundation the amount of same. Making the plaintiff whole in this case would be the cost to repair the foundation wall, but no evidence exists as to those costs of repairs.
On appeal, plaintiffs contend the trial court erred when it ruled that "repair cost" required dismissal of the action. Plaintiffs contend the appropriate measure of damages is "replacement cost." We disagree with plaintiffs' reasoning and affirm substantially for the reasons expressed by Judge Waldman in his cogent and well-reasoned oral opinion of September 17, 2008. We add the following brief comments.
We have, in the past, described the appropriate measure of damages for an injury to real property as a "complex subject" that requires a response "in a great variety of ways depending upon the evidence in the particular case." Velop, Inc. v. Kaplan, 301 N.J. Super. 32, 64 (App. Div. 1997), appeal dismissed, 153 N.J. 45 (1998). Ordinarily, either diminution in the value of the property or the reasonable cost of restoring or repairing damage related to a building structure is the proper measure of damages to compensate a plaintiff whose property has been negligently damaged. See 525 Main Street Corp. v. Eagle Roofing Co., Inc., supra, 34 N.J. at 254-55.
Here, plaintiffs chose to demolish and rebuild the structure. Because the purpose of any damage award is to make the injured party whole, the party seeking damages bears the burden of establishing entitlement to the damages sought. Ibid. Defendants contend that plaintiffs were only entitled to recover the cost to repair the partial collapse, while plaintiffs urge that because the notice from the Borough of Manasquan stated their property posed an "imminent hazard," immediate action was demanded, which they contend was demolition and rebuilding.
In our view, plaintiffs were entitled to advance their theory that the cost of demolition and rebuilding the property was the appropriate measure of damages. Upon plaintiffs presenting evidence to support this measure of damages, defendants were entitled to challenge plaintiffs' theory by presenting evidence that plaintiffs' damages were limited to the cost to repair the partial collapse of the foundation wall. See St. Louis, L.L.C. v. Final Touch Glass & Mirror, Inc., 386 N.J. Super. 177, 190 (App. Div. 2006).
The flaw in plaintiffs' case is not their theory of recovery but the absence of any expert testimony to support the theory. Unlike the plaintiff in St. Louis, L.L.C., who presented expert testimony to support its theory of damages, ibid., plaintiffs here had no intention of producing any expert testimony. Although plaintiffs were poised to testify how much they spent in demolishing and rebuilding their home, neither was qualified to give "the why and the wherefore" to support their contention that the cost of demolishing and rebuilding was the appropriate measure of damages. Ibid. Nor is there any dispute that plaintiffs failed to present evidence relevant to the cost of repairs. Under these circumstances, had the matter proceeded to trial, the jury would have engaged in sheer speculation on the question of damages. Thus, the complaint was properly dismissed.