USA – NEW JERSEY Trends and Developments Contributed by: William (Bill) Wilson and Craig R. Rygiel, Mound Cotton Wollan & Greengrass
insured argued “that his submission of replacement cost estimates is sufficient and permits a jury to deter- mine ACV under the broad evidence rule” ( Kimmel , 787 F. Supp. 3d at 21). The trial court squarely rejected this argument, explaining “a plaintiff cannot simply present a replace- ment cost figure and expect a factfinder to somehow extrapolate ACV without more” (id at 24). Instead, the trial court said that an insured “must provide a devel- oped evidentiary foundation—such as depreciation calculations, market value comparisons, or other reli- able valuation metrics—from which ACV may reason- ably be determined under the broad evidence rule” (id). A similar result was reached in Johnson. As discussed above, the parties in that case agreed that the plain- tiffs’ home sustained damage during a hailstorm but disagreed over whether the roof sustained any cov- ered damage. As in Kimmel , the insurer moved for summary judgment, arguing that the insureds were limited to recovering the ACV of the roof damage (if any covered damage even existed) and that they failed to produce evidence to establish that amount. The trial court agreed, observing “courts in [the District of New Jersey] have repeatedly held that plaintiffs cannot proceed to trial on breach of contract claims armed only with evidence of the RC-based value of their alleged loss” ( Johnson , 2025 WL 1527444, at *5). The insureds’ failure to adduce evidence of the ACV of the roof damage was particularly egregious as the RC estimate prepared by their roofer “include[d] columns for calculating ACV, including depreciation, [but] the roof[er] neither identified any depreciation nor assigned an ACV to the claimed damage” (id). In addition, the trial court rejected the insureds’ reli- ance on the equitable doctrine of impossibility of performance to argue that they were entitled to ACV because the insurer’s refusal to pay RC upfront pre- vented them from completing the repairs. The trial court found the insureds’ position was based on cir- cular reasoning, explaining that “[a]s a matter of logic, a party cannot be excused from meeting a condition precedent simply because they have not received the benefit that depends on satisfying it” (id). And, in any event, the court noted the insureds failed to present
any evidence of “financial hardship that would have made repairs impossible without those funds [the ACV of the roof damage]” (id). These decisions emphasise the need to develop evi- dence during discovery regarding ACV as well as RC. Absent evidence of both measures, an insured’s claim might never reach a jury. The New Jersey Appellate Division Clarifies a Risk Purchasing Group’s Standing To Bring Suit on Behalf of One of Its Members In WCPP Risk Purchasing Group, Inc. v Lexington Insurance Co ., No A-0928-23, 2025 WL 1672272 (N.J. Super. Ct. App. Div. June 13, 2025), the Appellate Divi- sion addressed whether a risk purchasing group (RPG) has standing to bring suit on behalf of its members. “In the context of insurance law, a ”‘[p]urchasing group’ means any group which: has as one of its purposes the purchase of liability insurance on a group basis; purchases such insurance only for its group members and only to cover their similar or related liability expo- sure; is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar or common business, trade, prod- uct, services, premises or operations; and is domiciled in this or any other state” (id at *5) (quoting N.J.S.A. 17:47A-2). The plaintiff in WCPP was an RPG that purchased commercial general liability insurance coverage from Lexington on behalf of a group engaged in com- mercial real estate. One of the members of the RPG, Bleznak Organization, purchased insurance coverage on behalf of an apartment complex known as the Vil- lage of Stoney Run. After Stoney Run was sued for wrongful death by the estate of one of its former ten- ants, Lexington rejected the tender of coverage on its behalf. The RPG subsequently sued Lexington, argu- ing it had a duty to defend and indemnify Stoney Run. On appeal, Lexington challenged the trial court’s find- ing that the RPG had standing to bring suit on behalf of Stoney Run. Lexington argued that “the record contained no evidence that [the RPG] was a desig- nated agent of Bleznak or Stoney Run, that Bleznak or Stoney Run authorized [the RPG] to initiate an action,
554 CHAMBERS.COM
Powered by FlippingBook