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Batten Down the Hatches! NJ Appellate Court to Examine Fortuity Question (NJ)

November 15, 2019

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<p class="x_MsoNormal" style="text-align: justify;"><b><u><span></span></u></b>A New Jersey couple, the Inganamorts, recently filed an appeal to the 3rd U.S. Circuit Court of Appeals after losing to their insurer, Chartis, in a coverage battle that truly rocked the lower court’s boat. The original dispute arose after the Inganamorts sought coverage with Chartis when their yacht partially sank while docked at a marina in Boca Raton, Florida. Chartis denied coverage for the incident and filed suit, seeking a declaratory judgment that it owed no coverage for the couple's claim because the policy only covers a loss that is proven to be the result of a fortuitous event.</p>
<p class="x_MsoNormal" style="text-align: justify;">U.S. District Judge WIlliam H. Walls of the District of New Jersey granted Chartis' motion for summary judgment (<a href="https://www.wcmlaw.com/2019/03/cloudy-with-a-chance-of-no-coverage/">which we reported on earlier this year</a>) on the basis the Inganamorts failed to show that the amount of rainfall on the days in question was sufficiently fortuitous to have caused the yachts partial sinking. Chartis argued that the vessel's damage was not fortuitous because they stemmed from a hole in the boat that we brought about by years of lack of upkeep. Conversely, the Inganamorts contend that the heavy rainstorms had overwhelmed the vessel and caused it to partially sink.</p>
<p class="x_MsoNormal" style="text-align: justify;">The lower court’s decision serves as a useful illustration of how courts apply the fortuity rule. Generally, the insured need only prove that a loss or damage to property occurred while the policy was in force and that the loss arose from a cause that is not excluded under the policy. Interestingly enough, Chartis asserts in their reply brief that even if the Inganamorts were able to demonstrate a fortuitous loss in the case at hand, coverage would nevertheless still be barred by several policy exclusions. The Inganamorts may inevitably be cornered into two dangerous alternatives, or as the harbor master may say, be stuck between the devil and the blue sea.</p>
<p class="x_MsoNormal" style="text-align: justify;">Thanks to James Papadakis for his contribution to this post.  Please email <a href="mailto:BGibbons@wcmlaw.com">Brian Gibbons</a> with any questions.</p>
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