TRIAL JUDGE GAVE THE WRONG JURY INSTRUCTION CONCERNING THE LIABILITY OF AN INSURANCE COMPANY FOR DAMAGE WHEN THERE IS EVIDENCE THAT THE CAUSE OF THE DAMAGE COULD EITHER BE A CAUSE COVERED BY THE POLICY OR A CAUSE NOT COVERED BY THE POLICY, THE OVER $1.8 MILLION VERDICT REVERSED AND NEW TRIAL ORDERED (SECOND DEPT).

The Second Department, reversing the over $1.8 million verdict in this property damage case, determined that the trial judge did not give the proper jury instruction. There was evidence that the water damage during Hurricane Sandy could have been caused by  water which backed up in the sewers, which was covered by the police, or surface water, which was not covered by the policy:

“A trial court is required to state the law relevant to the particular facts in issue, and a set of instructions that confuses or incompletely conveys the germane legal principles to be applied in a case requires a new trial” … . Under an all-risk property damage policy, where multiple perils work together to cause the same loss, and one or more of those perils is covered under the policy, New York follows the majority rule such that the loss will be covered if the “proximate, efficient and dominant cause” of the loss is covered by the policy … . By contrast, a minority of jurisdictions adhere to the broader “concurrent cause” rule, under which a loss will be covered “if any one of multiple non-remote causes of the same loss is a non-excluded peril” … .

Here, the Supreme Court’s instruction to the jury misstated the law in that it permitted the jury to find coverage for the plaintiffs’ loss if one or more covered perils acted together with a noncovered peril to cause the same loss, without regard to whether the efficient or dominant cause of the loss was a covered peril under the policy. Since the error may have prejudiced the defendant, a new trial is warranted … . Greenberg v Privilege Underwriters Reciprocal Exch., 2019 NY Slip Op 01202, Second Dept 2-20-19