On January 13, 2020, Partners, Adam P. Stark and James P. Ricciardi, obtained summary judgment, dismissing claims asserted by an insured against our insurer client, for intentional and negligent spoliation of evidence. The claim arose out of a first-party property loss, wherein a fire suppression sprinkler discharged and caused damage to Plaintiff’s property. The first-party property claim was adjusted, in part, and proceeded to litigation, in part, which ultimately resulted in a favorable settlement to our client at the time of trial. Shortly before settlement of the first-party property litigation, Plaintiff filed suit against the insurer, alleging that it had taken possession of and later discarded the subject sprinkler head and, as a result, Plaintiff was unable to pursue “viable” claims against third-parties whose negligence caused the sprinkler discharge and, consequently, left Plaintiff unable to recoup damages for losses not covered under the first-party insurance policy. Specifically, Plaintiff alleged that it’s largest tenant vacated the property following the loss, with several years remaining on its lease with Plaintiff, and sought to recover damages in the form of unrealized rental income in excess of $5 million.
Fleischner Potash defended the claims against its client, which were filed in 2017, through several years of voluminous document discovery and multiple depositions, the latter of which was key to establishing a right to summary judgment. Plaintiff relied on the opinions of its professional engineering expert, who opined that there were three “potential” causes of the sprinkler loss but, without being able to examine the lost sprinkler head he could not establish which of those causes actually caused the sprinkler discharge. Relying thereon, Plaintiff alleged that the loss of the sprinkler head left it unable to pursue claims against third-parties responsible for those “potential causes.” The Court’s grant of summary judgment found that Plaintiff failed to produce proof, either through facts, data or specific methodologies to support its expert’s conclusions, or to support a causal connection between the loss of the sprinkler head and Plaintiff’s inability to prove its alleged claims against third-parties. On March 16, 2020, the Court denied Plaintiff’s motion for reconsideration.