New Jersey Court Remands Summary Judgment in Favor of Insurers in Superstorm Sandy Policy Dispute Due to Trial Court’s Failure to Specify Grounds for Decision

In Doerfler v. Federal Ins. Co., the Appellate Division of the New Jersey Superior Court examined lawsuits brought by a policyholder against two insurers with regard to the denial of claims for damage to a residence arising from Superstorm Sandy. In each case, the insurer had denied coverage based upon the policy’s surface water exclusion. The policyholder asserted breach of contract and bad faith claims against the insurers. The bad faith claims were severed pending resolution of the breach of contract claims.

Following discovery, the trial court granted the defendant insurers’ motions for summary judgment and denied the plaintiffs’ cross-motions for summary judgment. The Court did not provide any basis for its order, other than to state that it was entered for the reasons set forth in the defendants’ motions. The Appellate Division held that such language failed to satisfy the requirement under the New Jersey Civil Rules that every order that is appealable as of right be supported by an opinion or memorandum setting forth the court’s findings of facts and conclusions of law. The Court therefore reversed the trial court’s order and remanded for further proceedings.