United States District Court, D. New Jersey
MD RETAIL CORP. d/b/a/ MONMOUTH BEACH SUPERMARKET and MS RETAIL CORP. d/b/a SEA BRIGHT SUPERMARKET Plaintiffs,
GUARD INSURANCE GROUP, Defendant.
Brian Ponziano, Esq. Attorney for Plaintiffs
Brandon L. Sipple, Esq. Jeremiah L. O'Leary, Esq.
Jonathan M. Zagha, Esq. Finazzo, Cossolini, o'leary,
meola & hager, Llc Attorneys for Defendant
HONORABLE JEROME B. SIMANDLE JUDGE
insurance coverage action, Plaintiffs MD Retail Corp.
(hereinafter, “MD Retail”) and MS Retail Corp.
(hereinafter, “MS Retail”)(together
“Plaintiffs”) allege that Defendant AmGuard
Insurance Company (hereinafter, “AmGuard” or
“Defendant”) breached its contractual obligation
to pay benefits under a commercial property insurance policy
by denying coverage after Hurricane Sandy caused damage to
Plaintiffs' buildings and loss of business income.
Defendant moves for summary judgement because it argues that
Plaintiffs lack evidence that any damage occurred and that
even if it did occur, such damage was not caused by a covered
loss. Whether various opinions offered by Plaintiffs to
support their claimed losses are admissible as expert
opinions under Rule 702 of the Federal Rules of Evidence must
also be addressed, and the Court convened a Daubert
hearing on those issues, as discussed herein.
reasons that follow, Defendant's motion for summary
judgment will be granted in part and denied in part.
Factual Background 
MD Retail and MS Retail, located in Monmouth Beach, New
Jersey, are co-owned by Dhiren Amin and Suresh Patel.
Defendant issued Policy No. MDBP303727 to MD Retail for the
period from March 9, 2012 to March 9, 2013, which provided
coverage to MD Retail for direct physical loss of or damage
to their supermarket located at 73 Riverdale Road, Monmouth
Beach, New Jersey 07750. (Def.'s Statement of Material
Facts at ¶ 1.) Defendant also issued Policy No.
MSBP304540 to MS Retail for the period from July 7, 2012 to
July 7, 2013 which provided coverage to MS Retail for direct
physical loss of or damage to their supermarket located at
1160 Ocean Avenue, Sea Bright, N.J. 07760. (Id. at
¶ 2.) The MD and MS Retail policies both state, in
Section 1 - Property 1
We will pay for direct physical loss of or damage to Covered
Property at the premises described in the Declarations caused
by or resulting from any Covered Cause of Loss.
1. Covered Property
Covered Property includes Buildings as described under
Paragraph a. below, Business Personal Property as described
under Paragraph b. below, or both, depending on whether a
Limit of Insurance is shown in the Declarations for that type
of property. Regardless of whether coverage is shown in the
Declarations for Buildings, Business Personal Property, or
both, there is no coverage for property described under
Paragraph 2. Property Not Covered.
(Prislupsky Decl., Exs. 1-2.) The Declarations in the MD
Retail policy contained a Limit of Insurance of $650, 000 for
“Business Personal Property Coverage, ” and in
May 2012, Defendant issued an endorsement that added a
“Building Coverage Limit” of $1, 600, 000.
(Id. at Ex. 1; Zagha Cert., Ex. 1.) As a result, at
the time of Hurricane Sandy, the MD Retail policy insured
both “Buildings” and “Business Personal
Property” as Covered Property.
other hand, the Declarations for the MS Retail Policy
included a Limit of Insurance of $650, 000 for
“Business Personal Property, ” but no further
endorsement for “Buildings” coverage. (Prislupsky
Decl. Ex. 2.) So at the time of Hurricane Sandy, the MS
Retail policy insured only “Business Personal
Property” as Covered Property.
policies contain the following definitions for
“Buildings” and “Business Personal
Buildings, meaning the buildings and structures at the
premises described in the Declarations, including:
(1) Completed additions;
Fixtures, including outdoor fixtures;
(3) Permanently installed:
Your personal property in apartments, rooms or common areas
furnished by you as landlord;
(5) Personal property owned by you that is used to
maintain or service the buildings or structures or the
Fire extinguishing equipment;
(b) Outdoor furniture;
Floor coverings; and
(d) Appliances used for refrigerating, ventilating,
cooking, dishwashing or laundering;
If not covered by other insurance:
(a) Additions under construction, alterations, and
repairs to the buildings or structures;
Materials, equipment, supplies and temporary structures, on
or within 100 feet of the described premises, used for
making additions, alternations or repairs to the buildings
b. Business Personal Property located in or on the
buildings at the described premises or in the open (or in a
vehicle) within 100 feet of the described premises,
Property you own that is used in your
(2) Property of others that is in your care, custody or
control, except as otherwise provided in Loss Payment
Property Loss Conditions Paragraph E.5.d. (3)(b);
(3) Tenant's improvements and betterments.
Improvements and betterments are fixtures, alterations,
installations or additions(a) Made a part of the
building or structure you occupy but do not own; and
You acquired or made at your expense but cannot legally
(4) Leased personal property which you have a contractual
responsibility to insure, unless otherwise provided for under
Paragraph 1.b. (2); and
Exterior building glass, if you are a tenant and no Limit
of Insurance is shown in the Declarations for Building
property. The glass must be owned by you or in your care,
custody or control.
(Prislupsky Decl., Exs. 1 and 2.)(emphasis added) Both
policies also contain an exclusion for loss or damage caused
1. We will not pay for loss or damage caused directly or
indirectly by any of the following. Such loss or damage is
excluded regardless of any other cause or event that
contributes concurrently or in any sequence to the loss.
These exclusions apply whether or not the loss event results
in widespread damage or affects a substantial area.
. . . g. Water
(1) Flood, surface water, waves (including tidal wave and
tsunami), tides, tidal water, overflow of any body of water,
or spray from any of these, all whether or not driven by wind
(including storm surge);
(2) Mudslide or mudflow;
(3) Water that bucks up or overflows or is otherwise
discharged from a sewer, drain, sump, sump pump or related
(4) Water under the ground surface pressing on, or flowing or
(a) Foundations, walls, floors or paved surfaces;
(b) Basements, whether paved or not; or
(c) Doors, windows or other openings; or
(5) Waterborne material carried or otherwise moved by any of
the water referred to in Paragraph (1), (3) or (4), or
material carried or otherwise moved by mudslide or mudflow.
(Id.) Relatedly, both policies also contained a
limitation of coverage for loss or damage to the interior of
the buildings caused by certain types of water:
will not pay for loss or damage to:
. . .
(5) The interior of any building or structure caused by or
resulting from rain, snow, sleet, ice, sand or dust, whether
driven by wind or not, unless:
(a) The building or structure first sustains damage by a
Covered Cause of Loss to its roof or walls through which the
rain, snow, ...