United States District Court, D. New Jersey
KIMBERLY PELKEY SDEO PAUL J. MASELLI SHAWN DAVID EDWARDS
MASELLI WARREN PC JOSHUA L. MALLIN WEG AND MYERS, P.C. On
behalf of Plaintiff
CHRISTOPHER S. FINAZZO FINAZZO COSSOLINI O'LEARY MEOLA
& HAGER, LLC On behalf of Defendant
L. HILLMAN, U.S.D.J.
matter concerns whether an electrical outage at
Plaintiff's business caused by Superstorm Sandy is
covered under an insurance policy issued by Defendant.
Presently before the Court is the motion of Defendant for
summary judgment on Plaintiff's claim that Defendant
breached the parties' insurance contract by not
indemnifying Plaintiff for its covered losses. For the
reasons expressed below, Defendant's motion will be
Liberty Mutual Fire Insurance Company issued an All Risk
Policy of Insurance, effective August 1, 2012 through August
1, 2013, to Plaintiff Howard Berger Co., LCC,  and that policy
was in effect on October 29, 2012 when Superstorm Sandy
impacted the Cranbury, New Jersey area where Plaintiff is
located. The storm caused Plaintiff to be without electrical
power, supplied by Jersey Central Power & Light Company,
from October 29, 2012 until November 4, 2012.
is produced at the electric company's generating plant,
which transmits high-voltage electric power downstream
through transmission lines to transmission substations and
then to distribution substations that connect the electricity
to customers. The Cranbury substation delivers electricity to
Plaintiff on Circuit 4783. The Cranbury substation receives
electricity from the D82 transmission line. The D82
transmission line is supported by utility poles, including a
65' wooden pole which broke as a result of Sandy's
strong winds. That failure of the D82 transmission line
caused the Cranbury substation to de-energize, and become
unable to provide electricity to Circuit 4783 which supplied
Plaintiff with its electricity. The distribution line that
directly provided electricity to Plaintiff was also impacted
by the storm.
result, Plaintiff claims that it suffered business income
losses in excess of $1, 900, 000.00. Plaintiff submitted a
claim to Defendant detailing its losses and costs associated
with the damages it suffered, but Defendant denied
Plaintiff's claim on the basis that the electric service
was interrupted due to the failure of overhead transmission
and distribution lines, which is a non-covered cause of loss
of utilities under the policy.
filed a one-count breach of contact complaint against
Defendant, claiming that its damages are covered losses under
the policy. Defendant has moved for summary judgment in its
favor, taking the same position as its claim denial.
Plaintiff has opposed Defendant's motion.
Subject matter jurisdiction
Court has jurisdiction over this matter pursuant to 28 U.S.C.
§ 1332 because there is complete diversity of
citizenship between the parties and the amount in controversy
exceeds $75, 000. The citizenship of the parties is as
follows: Plaintiff's sole member is also an LLC, Main,
LLC (“Main”). Main's members are four
corporations and an LLC, Walker Lake Holdings, LLC.
Accounting for each of the members of the sole member of
Plaintiff LLC, including the corporations and the members of
Walker Lake, Plaintiff is a citizen of New York, New Jersey,
Delaware, and Connecticut. (Docket No. 45). Defendant is a
corporation duly organized and existing under and by virtue
of the laws of Wisconsin, having its principal place of
business in Massachusetts. (Id.)
Standard for Summary Judgment
judgment is appropriate where the Court is satisfied that the
materials in the record, including depositions, documents,
electronically stored information, affidavits or
declarations, stipulations, admissions, or interrogatory
answers, demonstrate that there is no genuine issue as to any
material fact and that the moving party is entitled to a
judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 330 (1986); Fed.R.Civ.P. 56(a).
issue is “genuine” if it is supported by evidence
such that a reasonable jury could return a verdict in the
nonmoving party's favor. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A fact is
“material” if, under the governing substantive
law, a dispute about the fact might affect the outcome of the
suit. Id. In considering a motion for summary
judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence;
instead, the non-moving party's evidence “is to be
believed and all justifiable inferences are to be drawn in
his favor.” Marino v. Industrial Crating Co.,
358 F.3d 241, 247 (3d Cir. 2004)(quoting Anderson,
477 U.S. at 255).
the moving party has the burden of demonstrating the absence
of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). Once the moving party
has met this burden, the nonmoving party must identify, by
affidavits or otherwise, specific facts showing that there is
a genuine issue for trial. Id. Thus, to withstand a
properly supported motion for summary judgment, the nonmoving
party must identify specific facts and affirmative evidence
that contradict those offered by the moving party.
Anderson, 477 U.S. at 256-57. A party opposing
summary judgment must do more than just rest upon mere
allegations, general denials, or vague statements.
Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir.
Third Circuit has summarized New Jersey law governing the
interpretation of insurance contracts:
Generally, “when interpreting an insurance policy,
courts should give the policy's words their plain,
ordinary meaning.” Nav-Its, Inc. v. Selective Ins.
Co. of Am., 183 N.J. 110, 869 A.2d 929, 933 (2005)
(internal quotation marks and citation omitted). “If
the policy language is clear, the policy should be
interpreted as written, [but][i]f the policy is ambiguous,
the policy will be construed in favor of the insured.”
Id. (internal citations omitted). Exclusions in an
insurance policy should be narrowly construed. Id.
at 934 (citing Princeton Ins. Co. v. Chunmuang, 151
N.J. 80, 698 A.2d 9, 16 (1997)). The insurer has the burden
of bringing the claim within the exclusion. Princeton
Ins., 698 A.2d at 16-17. Nonetheless, “exclusions
are presumptively valid and will be given effect if
‘specific, plain, clear, prominent, and not contrary to
public policy.'” Id. at 17 (quoting
Doto v. Russo, 140 N.J. 544, 659 A.2d 1371, 1378
(1995)); see also Am. Motorists Ins. Co. v. L-C -A Sales
Co., 155 N.J. 29, 713 A.2d 1007, 1013-14 (1998) (finding
that a policy exclusion precluded coverage because it was
“clear and unambiguous” and not contrary to
public policy). New Jersey courts also “endeavor to
interpret insurance contracts to accord with the objectively
reasonable expectations of the insured.” See
Nav-Its, 869 A.2d at 934 (internal quotation marks ...