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The Appellate Division, reversing a trial court's decision, has ruled that the scope of available damages when a defendant's negligence caused homeowners to be displaced was not necessarily limited to the cost of alternate shelter covered by insurance but that the homeowners also could seek additional damages for “inconvenience.”

The Case

In February 2014, a winter storm caused a high-voltage power line in Willingboro belonging to Public Service Electric and Gas (“PSE&G”) to fall and ignite fires in a number of homes. The homeowners were displaced from their homes for 10 months.

The homeowners' insurance carriers reimbursed them for the repair costs and the incidental expenses generated by their extended stays in motels during their displacement, but they sued PSE&G, seeking damages for the loss of use of their homes, as well as emotional distress, and personal injuries. 

A jury found PSE&G liable for the occurrence. A month later, PSE&G moved for summary judgment, arguing that the homeowners were undamaged beyond the compensation provided by their insurers.

The trial court entered judgment for PSE&G and the homeowners appealed, arguing that the trial court erred in concluding that they were not entitled to damages for the loss of use of their property or their inconvenience.

The Appellate Court's Decision

The appellate court reversed.

In its decision, the appellate court ruled that the fact that the homeowners had been provided motel rooms and reimbursed meal and transportation costs by their insurance carriers “did not foreclose their right to seek other damages resulting from the loss of the use of their homes or any other reasonable damages caused by the inconvenience.” Damages in such circumstances, the appellate court added, were “not limited to pecuniary losses” capable of “precise measurement.”

The appellate court rejected PSE&G's argument that the homeowners' inconvenience claims were not adequately supported, finding that they elaborated on the impact of displacement at their depositions. It noted, for example, that one family testified that they had to move on multiple occasions due to insurance issues. They said that their inconvenience included the moving of oxygen tanks for a 78-year-old family member who suffered from chronic obstructive pulmonary disease and who was without personal items of sentimental value to her when she died, before trial.

The appellate court added that the family was motel-bound over the Thanksgiving holiday, that the adult daughter had to share a motel room with her fiancé and seven-year-old son, and that she prematurely gave birth to another child during the time of displacement, generating further inconvenience during the infant's lengthy hospitalization.

The appellate court also pointed out that another family described how they were stuck depending on fast-food chains for most meals because their motel lacked a full-service kitchen and that one member of the family attempted to replicate their prior existence and bought several kitchen appliances to make some meals in the motel but that she claimed that “it wasn't the same.”

Moreover, because she was displaced, this woman could not have her mother, then residing in a nursing home, visit her residence; her mother died before the family could return to their home.

The appellate court observed that another member of this family alleged that his sleep was affected. He claimed the motel bed was not the same quality as his at home, and that the sounds of trucks, kids running in hallways, and motel doors slamming at all hours – compared to his peaceful home on a cul-de-sac – disrupted his normal routine.

Finally, the appellate court pointed out that all of the homeowners claimed that they had expended time and had incurred additional expenses not covered by insurance when periodically traveling to check on their homes.

The appellate court concluded that PS&G was not precluded from arguing that some or all of these damages represented “more than fair indemnity” or were “so extravagant” as to “outrun the bounds of reason.” The appellate court said that it expressed “no view on the compensability” of the homeowners' inconvenience damage claims. “That's for a jury to decide.”

The case is Certain Underwriters at Lloyds Subscribing to Policy PLH-0013397 v. Public Service Electric and Gas, No.  A-4128-17T4 (N.J. Ct. App. June 17, 2019). Attorneys involved include: Robert F. Rupinski argued the cause for appellants. Robert T. Gunning argued the cause for respondent (Morrison Mahoney LLP, attorneys; Robert T. Gunning, on the brief).

Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. Mr. Meyerowitz is the Director of the Insurance Coverage Law Center and editor-in-chief of journals on insurance law, banking law, bankruptcy law, energy law, government contracting law, and privacy and cybersecurity law, among other subjects. He may be contacted at [email protected].