BUILD. MATERIALS v. Allstate Ins.
38 A.3d 644
| N.J. Super. Ct. App. Div. | 2012Background
- GAF seeks indemnification under National Union's policy, which excludes coverage for property damage to GAF's own products and contains an own-product exclusion.
- Underlying Coleman class action (Alabama 1996) alleged defects in GAF shingles, with claims of property damage and other misrepresentations; settlement occurred in 1998 for about $63 million.
- Settlement defined damage to GAF shingles and distinguished consequential damages, limiting recovery to damages beyond labor and shingles and allowing separate recovery for certain non-shingle components under the settlement terms.
- GAF informed National Union of the suit, defended it under reservation of rights, and later pursued declaratory relief for defense/indemnity; discovery and trial stretched over more than a decade.
- Jury returned a verdict of no cause of action; the trial court rejected GAF's bad-faith claim and dismissed the complaint and counterclaim; National Union cross-appealed on IFPA grounds.
- Issues on appeal focus on whether GAF can prove a covered loss by showing third-party property damage or an inclusion of such damages in the Coleman settlement, and on numerous evidentiary and procedural challenges raised by GAF.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Burden to prove covered loss | GAF contends it proves coverage if Coleman claims alleged third-party damage or if settlement paid for such damages. | National Union argues GAF must prove actual third-party property damage payments within the settlement to trigger coverage. | GAF must prove actual settlement payment for third-party damages. |
| Law of the case | GAF asserts the trial court departed from the law of the case by imposing the third-party damage payment prerequisite. | National Union asserts the governing rule shifted over time and the final instruction followed correct law. | Final charge aligned with proper law; no departure from law of the case. |
| Spoliation and adverse inference | GAF challenges the spoliation adverse-inference instruction as unwarranted and prejudicial. | National Union defends the instruction as a proper sanction for altered claim-file data that affected damages. | Adverse-inference instruction upheld; sanction deemed appropriate under the circumstances. |
| Expert discovery and rebuttal | GAF argues that allowing National Union to designate Neumann shortly before trial unfairly curtailed rebuttal time. | National Union asserts discovery rulings were discretionary and not abusing the process; good-cause extensions were properly denied. | Trial court did not abuse discretion in allowing Neumann; no reversible error in discovery rulings. |
Key Cases Cited
- Weedo v. Stone-E-Brick, Inc., 81 N.J. 233 (1979) (burden shifts to insurer after prima facie covered loss)
- Heldor Indus., Inc. v. Atl. Mut. Ins. Co., 229 N.J. Super. 390 (App. Div. 1988) (duty to indemnify requires proof of coverage before applying exclusion)
- Acupac Packaging, Inc. v. Newark Ins. Co., 328 N.J. Super. 385 (App. Div. 2000) (clarifies that third-party property damage must be established for coverage)
- Firemen's Ins. Co. of Newark v. Nat'l Union Fire Ins. Co., 387 N.J. Super. 434 (App. Div. 2006) (coverage and exclusions interplay in complex claims)
- Wakefern Food Corp. v. Liberty Mut. Fire Ins. Co., 406 N.J. Super. 524 (App. Div. 2006) (burden-shifting framework in coverage disputes with exclusions)
- Kopp v. Newark Ins. Co., 204 N.J. Super. 415 (App. Div. 1985) (burden shifts to insurer once prima facie covered loss is shown)
- Ply Gem Indus., Inc. v. National Union Fire Ins. Co., 343 N.J. Super. 430 (App. Div. 2001) (continuous-trigger and coverage analysis in occurrence policies)