Court Opinion

ID: 4910168
Source: CourtListenerOpinion
Date Created: 2021-09-10 14:10:59.506478+00
Date Added: 2024-06-11T08:13:05.030885
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
              APPROVAL OF THE APPELLATE DIVISION

                                   SUPERIOR COURT OF NEW JERSEY
                                   APPELLATE DIVISION
                                   DOCKET NO. A-2925-19

27-35 JACKSON AVENUE, LLC,

     Plaintiff-Appellant,
                                     APPROVED FOR PUBLICATION

v.                                         September 10, 2021

                                         APPELLATE DIVISION
SAMSUNG FIRE & MARINE
INSURANCE COMPANY, LTD.,

     Defendant-Respondent.
_____________________________

           Submitted February 22, 2021 – Decided September 10, 2021

           Before Judges Messano, Hoffman and Smith.

           On appeal from the Superior Court of New Jersey,
           Law Division, Bergen County, L-6049-17.

           Varcadipane & Pinnisi, PC, attorneys for appellant
           (Jeffrey William Varcadipane and Samuel S. Saltman,
           on the briefs).

           Fleischner Potash, attorneys for respondent (James P.
           Ricciardi, Jr., on the brief).

     The opinion of the court was delivered by

MESSANO, P.J.A.D.
      Plaintiff 27-35 Jackson Avenue LLC owned commercial property in

Long Island City, New York. For no apparent reason, on January 8, 2015, a

sprinkler head discharged water on the second floor of the premises that

eventually damaged that floor and the one below. Plaintiff's principal tenant at

the time was the United States General Services Administration (GSA), which,

pursuant to a long-term lease, housed offices of the Department of Homeland

Security at the property. Within days, GSA served written notice that it was

terminating the lease because the premises were "untenantable."        Plaintiff

claimed to have lost millions of dollars in rent, including recoupment of the

costs of improvements made to accommodate GSA's occupancy, because of

the flood. It filed suit against the federal government in the United States

Court of Federal Claims alleging breach of contract. 1

      Defendant Samsung Fire & Marine Insurance Co., Ltd., issued a

commercial liability policy to plaintiff that was in effect at the time of the

sprinkler mishap. Plaintiff secured the sprinkler head and made a claim under

1
  The Court of Federal Claims decision granted in part and denied in part the
Government's motion to dismiss plaintiff's complaint. See 27-35 Jackson Ave
LLC v. United States, No. 16-947C, 2017 U.S. Claims LEXIS 1204 (Fed. Cl.
Sept. 28, 2017). We have no further information on any developments in that
lawsuit.

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                                       2
the policy. 2 Defendant's subrogation counsel and claims adjuster engaged a

professional engineer, Alan Fidellow, who inspected the premises and took

possession of the sprinkler head.    On March 2, 2015, subrogation counsel

advised defendant that based on Fidellow's analysis, "there [wa]s no third party

available for subrogation."

      Approximately three weeks later, plaintiff's counsel notified defendant in

writing that it should preserve any items removed from the premises "in their

original condition and that no destructive testing, or any other testing that

would alter these items, be performed." He advised that plaintiff intended to

pursue any claims it might have "to recover for any portions of its loss not

recoverable under the applicable insurance policies," and asked defenda nt "to

preserve those items in their original condition for purposes of future

litigation."

      On May 20, 2015, defendant wrote plaintiff's counsel summarizing

Fidellow's opinions and stating, "The failed sprinkler head was retained by our

[a]djuster. To date no destructive testing was warranted or completed on the

sprinkler head." In October, plaintiff's counsel wrote to defendant advising of

the pending business interruption claim under the policy and requesting

2
   Plaintiff subsequently filed a declaratory judgment suit against defendant
seeking coverage for business interruption losses. That suit settled.

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                                       3
"access to the sprinkler head so that it may be examined by our expert." It was

not until March 2016 that defendant's newly-assigned claims manager

responded, writing that defendant did "not have in its possession any property

that may have been taken from this risk" and specifically did not have the

sprinkler head.

      Plaintiff filed this complaint, alleging defendant intentionally or

negligently lost or destroyed the sprinkler head, and plaintiff suffered damages

as a result.   Defendant filed its answer and discovery ensued, after which

defendant moved for summary judgment. Plaintiff opposed the motion and

cross-moved seeking "an [a]dverse [i]nference based on [d]efendant's

spoliation of evidence."

      After hearing oral argument, the Law Division judge reserved decision.

She subsequently issued a written opinion in support of her order granting

defendant's motion and dismissing plaintiff's complaint with prejudice. The

judge subsequently denied plaintiff's motion for reconsideration, and this

appeal followed.

                                       I.

      When reviewing the grant of summary judgment, we limit our review to

the record before the motion judge, Ji v. Palmer, 333 N.J. Super. 451, 463–64

(App. Div. 2000), and apply the same standard that she did. Globe Motor Co.

                                                                         A-2925-19
                                       4
v. Igdalev, 225 N.J. 469, 479 (2016). That standard mandates that summary

judgment be granted "if the pleadings, depositions, answers to interrogatories

and admissions on file, together with the affidavits, if any, show that there is

no genuine issue as to any material fact challenged and that the moving party

is entitled to a judgment or order as a matter of law." Templo Fuente De Vida

Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016)

(quoting R. 4:46-2(c)).   We owe no deference to the motion judge's legal

analysis and "review issues of law de novo."        The Palisades At Fort Lee

Condo. Ass'n v. 100 Old Palisade, LLC, 230 N.J. 427, 442 (2017) (citing

Zabilowicz v. Kelsey, 200 N.J. 507, 512 (2009)). Relevant to this appeal is

recognition that "[t]he practical effect of [Rule 4:46-2(c)] is that neither the

motion court nor an appellate court can ignore the elements of the cause of

action or the evidential standard governing the cause of action." Bhagat v.

Bhagat, 217 N.J. 22, 38 (2014).

                                       A.

      The motion record additionally reveals that after inspecting the sprinkler

head, Fidellow eliminated the possibility that the discharge resulted from a fire

or "freeze up."   He noted that the building manager had not reported any

ceiling stains in the area nor accidental impact injuries to the sprinkler head.

Fidellow attributed some discoloration of the sprinkler head to its age, but he

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                                        5
removed the heads of nearby sprinklers, and they did not exhibit similar

discoloration. He said that "the pipe dope 3 on the threads that were visible

appeared to have aged more than other areas which could mean that the head

had been existing or been reused."

      Fidellow contacted the manufacturer which had discontinued the product

in 2013; there had been no reported recalls. He concluded in a February 28,

2015 email:

                     When the head discharges the guts of the head
              are pushed out with the water release. Inspection of
              the head did not show any distortion and therefore
              there is nothing that can be determined from the head.

                    Without any physical evidence we can only
              surmise that there was some weakness in the internal
              elements of the head that eventually let loose allowing
              the water to discharge. There is no way however of
              proving this. The inspection reports of the sprinkler
              system would not be able to locate this type of failure.

When deposed, Fidellow said he "got rid of" the sprinkler head "a little bit

later" but did not know the exact date. He had the head "for a couple of

days . . . maybe [until the] beginning of March [2015] . . . when [he was] told

to close the case." Fidellow had no protocol for preserving evidence, nor was

he was ever notified that "there was an obligation to preserve this evidence."

3
   "Pipe dope" is a solvent-based adhesive that provides a seal between the
sprinkler head and the sprinkler system.

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                                         6
      Defendant's former claims manager testified at deposition that she

received plaintiff's counsel's March 2015 letter requesting preservation of the

sprinkler head and knew it was with Fidellow.       She did not know he had

discarded it or when.

      Plaintiff retained Klas Haglid, P.E., who rendered his opinions "to a

reasonable degree of engineering certainty."      Haglid criticized Fidellow's

inspection and opinion, noting he "did not consider corrosion."          Haglid

concluded it was "[m]ore likely than not" the potential cause of the sprinkler

head's failure was a manufacturing defect, improper installation, or improper

maintenance. However, "without the . . . sprinkler for inspection," he was

unable to determine the exact cause.

      During his deposition, Haglid testified that Fidellow could have

performed further evaluations on the sprinkler head, including a "chemical

analysis, analysis of rust or debris, spectral analysis of the metallurgy and

chemicals left on what would be left of the valve body." Although Haglid

would not speculate that these would have led to a specific conclusion, he

affirmed "that if [he] had the [sprinkler] valve body and [he] did some of these

                                                                         A-2925-19
                                       7
analyses[, he] would more likely than not reach a conclusion as to what caused

it to discharge." 4

                                        B.

      We focus only on issues that arose during argument on the moti on and

plaintiff's cross-motion that are germane to the appeal.       Defendant argued

plaintiff was "unable to make out the proximate cause link that's necessary

between [defendant's] conduct and [plaintiff's] supposed inability to prove

what would have been viable claims against third parties." 5 Plaintiff argued

that even though the target of its potential lawsuit was a third-party and not

defendant, a "negative inference" was appropriate based on defendant's failure

to preserve the evidence. Plaintiff further contended that it had established

defendant's spoliation of the sprinkler head proximately caused its inability to

pursue a culpable third-party and recoup its losses not covered by defendant's

policy.

4
    Plaintiff also retained an attorney who opined that based on Haglid's
opinion, the failure to preserve the sprinkler head resulted in plaintiff's
inability to pursue "one or more parties who were responsible for the failure."
In the attorney's opinion, defendant's failure to preserve the evidence was "a
proximate cause of [plaintiff] losing the ability to bring viable legal claims."
5
   Defense counsel specifically told the judge that defendant was not "moving
on [defendant's] legal obligation" to have preserved the sprinkler head.
Plaintiff conceded that the first count of its complaint, alleging intentional loss
or destruction of evidence, should be dismissed.

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                                        8
      In addressing count two of the complaint alleging negligent spoliation,

the judge cited our analysis in Gilleski v. Community Medical Center, 336 N.J.

Super. 646, 652–53 (App. Div. 2001), and noted such a claim "require[d] a

showing of a causal relationship between the evidence negligently destroyed or

lost . . . and plaintiff's inability to prove damages in other third-party claims."

She concluded that because "Haglid present[ed] no facts to infer, and much

less, to support, that the event was probably caused by a manufacturing defect,

improper installation, or improper maintenance . . . .            These are bare

conclusions." The judge likened plaintiff's argument to "an attempt to create a

strict liability claim." She entered an order dismissing plaintiff's complaint. 6

      Plaintiff moved for reconsideration, asserting, among other things, that

the judge should have held a Rule 104 hearing before concluding Haglid's

opinion was a net opinion.      It also argued that the judge's analysis of the

proximate cause issue "effectively abolishe[d] negligence -based spoliation

claims." 7 In denying plaintiff's motion, the judge distinguished out-of-state

decisions cited by plaintiff and concluded, "Plaintiff has done nothing to

6
  The judge reasoned plaintiff's cross-motion was moot. There is no order in
the appellate record denying plaintiff's cross-motion.
7
    Plaintiff did not include the motion for reconsideration or defendant's
opposition in its appendix. Defendant's appendix includes the judge's written
statement of reasons denying the reconsideration motion. We rely on that in
recounting the arguments made by the parties.

                                                                            A-2925-19
                                         9
demonstrate . . . a 'reasonable probability of succeeding' in an underlying suit

against the alleged responsible third-parties."

                                        II.

      Plaintiff contends the judge should have considered the cross-motion

"first," because with the benefit of an adverse inference against defendant,

plaintiff met its burden of establishing a prima facie case of negligence.

Plaintiff also argues that the judge misapplied the law regarding proximate

cause in negligence claims based on spoilation of evidence.

      We have considered the arguments in light of the record and applicable

legal standards.    We affirm, albeit in part for reasons other than those

expressed by the motion judge. See Hayes v. Delamotte, 231 N.J. 373, 387

(2018) ("[I]t is well-settled that appeals are taken from orders and judgments

and not from opinions, oral decisions, informal written decisions, or reasons

given for the ultimate conclusion."           (quoting Do-Wop Corp. v. City of

Rahway, 168 N.J. 191, 199 (2001))).

                                        A.

      "Spoliation of evidence in a prospective civil action occurs when

evidence pertinent to the action is destroyed, thereby interfering with the

action's proper administration and disposition." Cockerline v. Menendez, 411

N.J. Super. 596, 620 (App. Div. 2010) (quoting Aetna Life & Cas. Co. v. Imet

                                                                         A-2925-19
                                        10
Mason Contractors, 309 N.J. Super. 358, 364 (App. Div. 1998)). "[T]o a great

extent our traditional approach to spoliation begins with identifying the

spoliator, because that, in and of itself, will impact on the available and

appropriate remedies." Robertet Flavors, Inc. v. Tri-Form Constr., Inc., 203

N.J. 252, 272 (2010) (citing Tartaglia v. UBS PaineWebber, Inc., 197 N.J. 81,

119–20 (2008)). When the spoliator is the defendant in the suit, the court is

empowered to fashion an appropriate remedy. See Cockerline, 411 N.J. Super.

at 620 ("Depending on the circumstances, spoliation can result in dismissal, a

separate tort action for fraudulent concealment, discovery sanctions, or an

adverse trial inference against the party that caused the loss of evidence."

(citing Jerista v. Murray, 185 N.J. 175, 201 (2005))).

      We reject plaintiff's argument that the judge should have granted its

cross-motion and considered the record evidence with a jaundiced eye,

specifically by granting plaintiff an adverse inference. As the Court explained

in Rosenblit v. Zimmerman,

                  The best known civil remedy that has been
            developed is the so-called spoliation inference that
            comes into play where a litigant is made aware of the
            destruction or concealment of evidence during the
            underlying litigation. . . .

                  Courts use the spoliation inference during the
            underlying litigation as a method of evening the
            playing field where evidence has been hidden or
            destroyed.    It essentially allows a jury in the

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                                       11
              underlying case to presume that the evidence the
              spoliator destroyed or otherwise concealed would have
              been unfavorable to him or her.

              [166 N.J. 391, 401–02 (2001) (emphases added)
              (citations omitted).]

In other words, an adverse or spoliation inference may be utilized to address

the intentional or negligent spoliation of evidence by a party to the suit.

"[T]he factfinder is permitted to presume that the evidence the spoliator

destroyed or concealed would have been unfavorable to him or her." Bldg.

Materials Corp. of Am. v. Allstate Ins. Co., 424 N.J. Super. 448, 472 (App.

Div. 2012) (emphases added) (citing Robertet Flavors, 203 N.J. at 273;

Rosenblit,166 N.J. at 401–02).

       Here, plaintiff complains about the chance it allegedly lost to prove a

third-party was responsible for the sprinkler head's release and resulting flood.

Whatever an inspection of the sprinkler head may have shown would not have

been "unfavorable" to defendant, because defendant played no role in the

happening of the flood. Moreover, the loss of the sprinkler head was irrelevant

to plaintiff's declaratory judgment suit in which it sought coverage from

defendant.    Plaintiff cites no published decision in which an adverse or

spoliation inference was used as a remedy in similar circumstances, and our

research reveals none. The adverse or spoliation inference had no place in this

litigation.

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                                       12
                                       B.

      We address the judge's determination that Haglid's opinion was not

entitled to any consideration because it was essentially a net opinion. In our

review, we apply a "deferential approach to a trial court's decision to admit

expert testimony, reviewing it against an abuse of discretion standard."

Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J. 344, 371–72 (2011)

(citing Kuehn v. Pub Zone, 364 N.J. Super. 301, 319–21 (App. Div. 2003)).

"However, no deference is accorded when the court fails to properly analyze

the admissibility of the proffered evidence." E&H Steel Corp. v. PSEG Fossil,

LLC, 455 N.J. Super. 12, 25 (App. Div. 2018) (citing Konop v. Rosen, 425

N.J. Super. 391, 401 (App. Div. 2012)).

      "The net opinion rule is a 'corollary of [N.J.R.E. 703] . . . which forbids

the admission into evidence of an expert's conclusions that are not supported

by factual evidence or other data.'" Townsend v. Pierre, 221 N.J. 36, 53–54

(2015) (alteration in original) (quoting Polzo v. Cnty. of Essex, 196 N.J. 569,

583 (2008)). "An expert's conclusion 'is excluded if it is "based merely on

unfounded speculation and unquantified possibilities."'"      Id. at 55 (quoting

Grzanka v. Pfeifer, 301 N.J. Super. 563, 580 (App. Div. 1997)).              "The

admissibility rule has been aptly described as requiring that the expert 'give the

                                                                           A-2925-19
                                       13
why and wherefore' that supports the opinion, 'rather than a mere conclusion.'"

Pomerantz Paper Corp., 207 N.J. at 372 (citing Polzo, 196 N.J. at 583).

      Here, Haglid's opinions, as set forth in his report and deposition

testimony, were not net opinions.        He reviewed Fidellow's report and

deposition testimony, including the photos Fidellow took of the sprinkler head

while in his possession. Haglid reviewed other documents regarding the flood.

He explained, however, that the photos and Fidellow's analysis were

inadequate, primarily because Fidellow failed to consider or test for corrosion.

He also considered Fidellow's conclusions that freezing or a mechanical blow

did not cause the sprinkler head to release. Haglid explained the mechanism

and operation of the sprinkler head.   The transcript of Haglid's deposition is

literally hundreds of pages.

      The essential basis for the judge's criticism of Haglid's opinion was not

the lack of explanation supporting his conclusions, i.e., " the why and

wherefore," but rather her determination that Haglid's opinion was "devoid of

any factual support regarding the proximate cause element of" plaintiff's

negligent spoilation claim.    In other words, because Haglid could not say

within a reasonable degree of engineering certainty that the sprinkler head

failure was the result of a product defect, or was caused by faulty installation

or maintenance, his opinion was inadmissible. Of course, this overlooked the

                                                                          A-2925-19
                                       14
obvious — Haglid said he could not reach a definitive conclusion precisely

because he could not examine the sprinkler head.

      We move on to address the adequacy of plaintiff's proximate cause

proofs in the context of a negligent spoilation claim.

                                       C.

      Our courts "have also concluded that a separate claim may be

appropriate if the spoliator is not a party to the litigation." Robertet Flavors,

203 N.J. at 272 (citing Jerista, 185 N.J. at 203). See, e.g., Gilleski, 336 N.J.

Super. at 652 (where alleged spoliator was the defendant-hospital that failed to

preserve chair which collapsed, causing plaintiff's injuries, thereby impeding

his claim against the chair's manufacturer).     Such a claim is "designed to

remediate tortious interference with a prospective economic advantage. The

prospective economic advantage being protected is a plaintiff's opportunity to

bring a cause of action for which damages may be awarded."               Fox v.

Mercedes-Benz Credit Corp., 281 N.J. Super. 476, 482 (App. Div. 1995)

(citations omitted).

      Our courts have not recognized a separate tort for negligent spoliation of

evidence but rather have applied traditional negligence principles. Gilleski,

336 N.J. Super. at 648–50. "[N]egligent destruction of evidence against a third

party may be resolved by applying traditional negligence principles of a duty

                                                                          A-2925-19
                                       15
of care, breach of that duty by defendant, and an injury to plaintiff proximately

caused by defendant's breach."      Swick v. New York Times Co., 357 N.J.

Super. 371, 378 (App. Div. 2003) (citing Gilleski, 336 N.J. Super. at 652). In

Gilleski, we never addressed the issue of proximate cause in a negligence suit

based on spoliation of evidence because our focus was on whether the

defendant owed the plaintiff a duty to preserve the evidence. 336 N.J. Super.

at 654–55.     If we view the proximately caused injury as simply plaintiff's

inability to bring any lawsuit against a potentially liable third-party, without

the need to demonstrate the likelihood of success in such an action, i.e., an

award of actual damages, then plaintiff carried its burden for purposes of

summary judgment.

        However, our decision in Swick implies there is more to the prima facie

case.    There, the plaintiff injured his arm while working on a newspaper

conveyor system for his employer, the New York Times (the Times), and he

sued the successors-in-interest of the manufacturer of the machine and the

company responsible for its maintenance and repair. 357 N.J. Super. at 373 –

74. Despite the plaintiff's repeated requests to inspect the machine, the Times

sold the machine to a newspaper in the Philippines. Id. at 374.

        The trial court concluded the Times had a duty to preserve the machine,

and the matter proceeded to trial against all defendants. Id. at 375. However,

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                                       16
on the first day of trial, the plaintiff dismissed all claims against all other

defendants, except the Times, because "[t]he manufacturer of the machine . . .

had declared bankruptcy . . . and did not have any insurance, and . . . the

remaining defendants had been dismissed allegedly because plaintiff could not

establish a case against them without the opportunity to inspect the conveyor."

Ibid. The Times moved to dismiss the complaint, arguing the plaintiff "could

not establish a prima facie case of spoliation" because he could not prove

damages; the trial court agreed and dismissed the complaint. Id. at 375–76.

      On appeal, the plaintiff argued, among other things, that the judge erred

in dismissing the complaint because any uncertainty regarding his damages

was not a bar to recovery because the Times was responsible for his inability

to proceed against the other defendants. Id. at 376. In writing for our court,

future Justice John Wallace recapped the elements of a negligence claim based

on spoliation of evidence. Id. at 378. Noting that neither party challenged the

trial court's conclusion that the Times owed a duty to the plaintiff to preserve

the conveyor machine, we noted "assuming the Times breached that duty, the

crucial issue is whether plaintiff can demonstrate damages caused by that

breach." Id. at 378–79 (emphasis added). We noted that the plaintiff failed to

first pursue a discovery sanction, such as ordering the Times to pay for the

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                                      17
plaintiff's expert to fly to the Philippines and inspect the machine. Id. at 379.

In affirming the dismissal of the plaintiff's complaint, we said:

                   We turn now to whether plaintiff presented any
            evidence of injury or damages proximately caused by
            the Times's alleged breach of a duty to preserve the
            equipment.     As the trial court noted, plaintiff
            dismissed his complaint against all defendants except
            the Times.     The proofs showed that . . . the
            manufacturer of the machine, was out of business, and
            there was no insurance coverage. Thus, even if the
            machine had been available for plaintiff's expert to
            examine, and even if plaintiff obtained a judgment
            against [the manufacturer], it was not disputed that
            plaintiff could not recover damages from [the
            manufacturer].     Under these circumstances, the
            evidence was clear that plaintiff could not prove that
            the Times's conduct in failing to preserve the machine
            proximately caused any injury to plaintiff.
            Consequently, judgment was properly entered in favor
            of the Times.

            [Ibid.]

      In Swick, therefore, we concluded that the negligence action failed

because the plaintiff could not prove that the injury the plaintiff suffered from

the defendant's negligence, i.e., the loss of evidence, proximately caused the

plaintiff any damage. We have, in other cases, included the requirement of

proximately caused damages to the prima facie elements of negligence in

spoliation cases. See Hewitt v. Allen Canning Co., 321 N.J. Super. 178, 183

(App. Div. 1999) ("[T]he tort action for spoliation affords damages to a

plaintiff where the spoliator knows that litigation exists or is probable, the

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                                        18
spoliator . . . negligently destroys evidence . . . where such disruption is

foreseeable, plaintiff's case is in fact disrupted, and plaintiff suffers damages

proximately caused by the spoliator's acts." (emphasis added) (citing Hirsch v.

Gen. Motors Corp., 266 N.J. Super. 222, 234–37, 242–43 (Law Div. 1993)));

Viviano v. CBS, Inc., 251 N.J. Super. 113, 126 (App. Div. 1991) (including

"damages proximately caused by the defendant's acts" as an element of prima

facie case). Indeed, prima facie proof of actual damages is an element of all

successful negligence actions. See, e.g., Coleman v. Martinez, 247 N.J. 319,

337 (2021) ("The fundamental elements of a negligence claim are a duty of

care owed by the defendant to the plaintiff, a breach of that duty by the

defendant, injury to the plaintiff proximately caused by the breach, and

damages." (emphasis added) (quoting Robinson v. Vivirito, 217 N.J. 199, 208

(2014))).

      In Kranz v. Tiger, the plaintiff sued his attorneys and the expert doctor

they retained, claiming the attorneys' failure to properly communicate and

schedule the expert's appearance at trial, and the doctor's negligence in

conveying his schedule to the attorneys, resulted in the doctor's failure to

appear at trial and a settlement far below the actual value of plaintiff's injuries.

390 N.J. Super. 135, 140 (App. Div. 2007).          In reversing the trial judge's

directed verdicts in favor of the defendants, we noted that "[t]he most common

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                                        19
way to prove the harm inflicted by malpractice or other misconduct that

adversely affected the outcome in the underlying action is a suit-within-a-suit."

Id. at 145 (emphasis added) (citing Garcia v. Kozlov, Seaton, Romanini, &

Brooks, PC, 179 N.J. 343, 358 (2004)). The plaintiff must demonstrate, at the

least, "he would have recovered a judgment in the action against the main

defendant [and] the amount of that judgment." Ibid. (quoting Garcia, 179 N.J.

at 358). However, proving damages via the suit-within-a-suit method is "not

the only course." Id. at 146 (citing Garcia, 179 N.J. at 358–61). In Kranz, the

plaintiff was able to demonstrate actual damages utilizing the suit -within-a-suit

method even though the critical evidence, i.e., the doctor's testimony, was

absent from the underlying trial.

      We recognize the difficulty in using the suit-within-a-suit method to

prove damages in a negligence case based on spoilation of critical evidence

because the lost evidence impedes the plaintiff's ability to prove both

proximate cause for the underlying event and proximately caused damages.

Other jurisdictions have wrestled with this knotty issue.

      In Boyd v. Travelers Insurance Company, a case cited by plaintiff, a

propane heater exploded causing severe burns to the plaintiff, and the

defendant-insurer failed to preserve the heater.     652 N.E.2d 267, 269 (Ill.

1995).   The court recognized the plaintiff's claim against the insurer for

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                                       20
spoliation of evidence applying traditional negligence principles, stating "in a

negligence action involving the loss or destruction of evidence, a plaintiff must

allege sufficient facts to support a claim that the loss or destruction of the

evidence caused the plaintiff to be unable to prove an underlying lawsuit." Id.

at 270–71. Noting "[a]ctual damages must be alleged as well," the court held:

"Consequently, a plaintiff is required to allege that a defendant's loss or

destruction of the evidence caused the plaintiff to be unable to prove an

otherwise valid, underlying cause of action. A plaintiff must prove this before

the harm has been realized." Id. at 272 (emphasis added).

      In other words, contrary to the argument plaintiff makes in its brief,

Boyd held that the plaintiff must demonstrate likely success in the underlying

case, i.e., the suit-within-a-suit.    See id. at 271 n.2 ("A plaintiff must

demonstrate, however, that but for the defendant's loss or destruction of the

evidence, the plaintiff had a reasonable probability of succeeding in the

underlying suit." (emphasis added)).

      The Supreme Court of Alabama took a different tack in Smith v.

Atkinson, also cited by plaintiff.     771 So.2d 429 (Ala. 2000).     There, the

defendants, an insurance company and its adjuster, failed to preserve a

minivan involved in an accident in which the plaintiff's wife was killed. Id. at

431. On certification from the federal district court, the Supreme Court of

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                                        21
Alabama recognized that the plaintiff had a cause of action under traditional

negligence principles. Id. at 432. The court defined the elements of such a

claim, namely, that the spoliator had knowledge of pending or potential

litigation, owed the plaintiff a duty to preserve the evidence, and "the missing

evidence was vital to the plaintiff's pending or potential action." Ibid. The

Smith court, however, parted company with Boyd on the issue of proximate

causation and damages, concluding the need to prove an "'otherwise valid'

[claim] places too heavy a burden on the plaintiff.        Without the lost or

destroyed evidence, the plaintiff cannot show that the underlying claim was

valid." Id. at 434 (quoting Boyd, 652 N.E.2d at 272).

      The court resolved the proximate cause issues by concluding: "Once all

three . . . elements are established, there arises a rebuttable presumption that

but for the fact of the spoliation of evidence the plaintiff would have recovered

in the pending or potential litigation; the defendant must overcome that

rebuttable presumption or else be liable for damages." Id. at 432–33. "The

third party can overcome the presumption by producing evidence showing that

the plaintiff would not have prevailed in the underlying action even if the lost

or destroyed evidence had been available." Id. at 435.

      Additionally, the court noted that "[t]he appropriate measure of damages

is difficult to determine in spoliation cases because, without the missing

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evidence, the likelihood of the plaintiff's prevailing on the merits cannot be

precisely determined." Id. at 436. The court rejected a method adopted by

another court, where the "measure of damages . . . could be the damages that

would have been obtained in the underlying lawsuit, multiplied by the

probability that the plaintiff would have won the suit had he had the spoliated

evidence." Id. at 437 (quoting Petrik v. Monarch Printing Corp., 501 N.E.2d

1312, 1320 (Ill. App. 1986)). Ultimately, the Smith court concluded,

            without the spoliated evidence, the plaintiff's
            probability of success is too tenuous a measure to be
            consistently applied and that any attempt to apply it
            would constitute pure speculation. Therefore, in
            determining damages, we reject the use of probability
            of success as a benchmark, in favor of the use of
            compensatory damages that would have been awarded
            on the underlying cause of action, if the defendant
            cannot overcome the rebuttable presumption.

            [Id. at 438.]

Other jurisdictions have adopted the Smith court's use of a rebuttable

presumption on the issue of proximately caused injury and damages in

spoliation litigation. See Rizzuto v. Davidson Ladders, Inc., 905 A.2d 1165,

1178–82 (Conn. 2006) (applying presumption as to proximate cause and

damages while recognizing independent tort of intentional spoliation of

evidence); Hannah v. Heeter, 584 S.E.2d 560, 569–71 (W.Va. 2003) (applying

Smith standards to negligent spoliation claim).

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      Other courts have rejected the creation of any presumption in the

proximate cause analysis and followed some modification of Boyd's

"reasonable probability of succeeding" burden. For example, in Holmes v.

Amerex Rent-A-Car, the District of Columbia Court of Appeals, in

recognizing a separate tort for negligent spoliation of evidence, concluded a

plaintiff must demonstrate in addition to the existence of a duty and breach of

that duty, "the underlying lawsuit was significantly impaired, that the spoliated

evidence was material to that impairment and that the plaintiff enjoye d a

significant possibility of success in the underlying claim." 710 A.2d 846, 850

(D.C. Cir. 1998) (emphasis added).       The court explained the difficulty in

defining the plaintiff's proximate cause burden:

                   These countervailing interests — the plaintiff's
            interest in recovery for lack of ability to prove the
            underlying case, and the defendant's interest in only
            compensating plaintiff for defendant's harmful
            negligence or recklessness — must be balanced in
            determining the standard of proof for causation in an
            independent action for negligent or reckless spoliation
            of evidence.
                   This adds a unique characteristic to the tort.
            Not only must the plaintiff show that an expectancy of
            recovery was harmed, but also that such an expectancy
            realistically existed. Specifically, proximate cause
            must include two showings. First, it must be shown
            that the defendant's actions proximately caused some
            level of impairment in the plaintiff's ability to prove
            an existing underlying civil claim. Second, in order to
            show that defendant's actions proximately caused any

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                                       24
            damages, it must be shown that plaintiff's underlying
            claim was, at some threshold level, meritorious.

            [Id. at 850–51.]

After surveying decisions from other jurisdictions applying diverse standards

for determining proximate cause in spoliation litigation, the court held

            in order to demonstrate causation, a plaintiff must
            demonstrate that (1) the underlying claim was
            significantly impaired due to the spoliation of
            evidence; (2) a proximate relationship exists between
            the projected failure of success in the underlying
            action and the unavailability of the destroyed
            evidence; and (3) that the underlying lawsuit would
            enjoy a significant possibility of success if the
            spoliated evidence were still in existence.

            [Id. at 852 (emphasis added).]

Interestingly, the Holmes court nonetheless applied the discount method for

determining damages, where the total damages are multiplied by the

probability of success in the underlying lawsuit. Id. at 853.

      The Supreme Court of Montana adopted the same "significant possibility

of success" causation standard. Oliver v. Stimson Lumber Co., 993 P.2d 11,

20–21 (Mont. 1999) (adopting Holmes' analysis). That standard was "lower

than the standard of 'preponderance of the evidence.' . . . [A] plaintiff must

demonstrate a substantial and realistic possibility of succeeding, but need not

demonstrate that such success was more likely than not." Id. at 21. The court

in Oliver also applied a discount formula to the calculation of damages. Ibid.

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                                       25
      Plaintiff contends the motion judge should not have required that it

demonstrate a likelihood of success in an underlying suit against the sprinkler

manufacturer,   installer,   or   maintenance   company.     It   argues,    quite

descriptively, that adopting such a standard means "the damages element is

thus pit against the proximate cause element."       Although not specifically

urging adoption of the Smith presumption in spoliation situations, plaintiff

contends it sufficiently demonstrated defendant's negligence pr oximately

caused its injury and damages to permit the case to proceed to a jury.

      We would not presume to adopt such a far-reaching approach as that

endorsed by the Alabama Supreme Court in Smith.             "[O]ur role as an

intermediate appellate court is to follow the dictates of the Supreme Court

. . . ." RSB Lab'y Servs., Inc. v. BSI, Corp., 368 N.J. Super. 540, 560 (App.

Div. 2004) (citing Nixon v. Lawhon, 32 N.J. Super. 351, 355 (App. Div.

1954)). Our restraint is particularly warranted when it comes to expansion of

"established law." Rodriguez v. Cordasco, 279 N.J. Super. 396, 405 (App.

Div. 1995).     Nor, for the same reasons, do we specifically adopt the

"significant possibility of success" standard adopted by the court in Holmes.

      Although the Court has yet to speak directly to the proximate cause issue

in negligence cases based on spoliated evidence, for purposes of avoiding

summary judgment, the well-established elements of a negligence claim

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                                        26
required plaintiff to marshal sufficient proof to have avoided dismissal at trial

under Rule 4:37-2(b). Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520,

536 (1995). Dismissal under Rule 4:37-2(b) is only appropriate "where no

rational juror could conclude that the plaintiff marshaled sufficient evidence to

satisfy each prima facie element of a cause of action."      Smith v. Millville

Rescue Squad, 225 N.J. 373, 397 (2016) (quoting Godfrey v. Princeton

Theological Seminary, 196 N.J. 178, 197 (2008)). Plaintiff's burden included

proof of proximately caused damages. Robinson, 217 N.J. at 208; see also

Model Jury Charges (Civil), 1.12O, "Damages" (approved Nov. 1998)

(explaining that plaintiff has the burden of showing "the damages were the

natural and probable consequences of the defendant's negligence. . . .

Damages may not be based on conjecture or speculation.").

      Plaintiff may have presented a prima facie case that it suffered an

"injury" proximately caused by defendant's negligence beca use it could not

initiate a lawsuit against a potential third-party without the ability to inspect

the sprinkler head; however, Haglid's opinions did no more than point a finger

at three possible defendants potentially responsible for the untimely sprinkle r

discharge. The opinions did not explain why any one of those defendants'

product, installation, or maintenance caused plaintiff's damages.

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                                       27
      One possible defendant was the manufacturer of the sprinkler head, who

advised Fidellow the product was no longer produced and never recalled.

Fidellow, who actually examined the sprinkler head, explained "that there was

some weakness in the internal elements of the head that eventually let loose"

when the sprinkler head discharged.     That seemingly pointed to a possible

product defect, yet the record is devoid of any further attempts by plaintiff to

develop through discovery or otherwise additional information about the

device from the manufacturer. Nor did Haglid explain why Fidellow's opinion,

albeit insufficient in his mind to prove a product defect, was not significant

enough to help Haglid limit the likely cause of the discharge.

      Another candidate was the installer of the system, which plaintiff itself

engaged as part of the improvements done for the GSA lease. The installer

had actually started suit against plaintiff in New York courts to recover monies

it claimed were owed by plaintiff. However, the record lacks any information

demonstrating plaintiff took additional steps to discover whether the general

contractor or subcontractor it engaged were potentially responsible, or at least

provide Haglid with additional information in that regard.

      The third candidate was the inspection/maintenance service plaintiff

hired to routinely inspect and service the sprinkler system.        The record

includes the contract with that company and some of its inspection reports.

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There is nothing else demonstrating plaintiff's efforts to obtain further

information for Haglid's consideration, nor did Haglid rebut Fidellow's

conclusion that the inspection reports were not helpful in determining the

cause of the discharge.

      We hasten to add that plaintiff's failure was not as to the amount of

damages it allegedly sustained by being unable to litigate its claims against

any of the three potential third parties Haglid identified.     Our courts have

permitted "considerable speculation" by the fact finder in that regard. V.A.L.

Floors, Inc. v. Westminster Cmtys., Inc., 355 N.J. Super. 416, 424 (App. Div.

2002). However, "[t]he rule relating to the uncertainty of damages applies to

the uncertainty as to the fact of damage and not as to its amount." Tessmar v.

Grosner, 23 N.J. 193, 203 (1957) (emphasis added) (citing Oliver v.

Autographic Reg. Co., 126 N.J. Eq. 18, 25 (Ch. 1939)).

      Plaintiff was required to demonstrate not only the lost opportunity to

pursue a case against the manufacturer, installer, or maintenance provider

because of defendant's spoliation of the sprinkler head, but also that it suffered

actual damages because of defendant's negligence. As to this second aspect of

the proximate cause element, plaintiff was not required to demonstrate the

underlying suit would have succeeded, but it needed to marshal more than

simply an expert's opinion that there could have been three reasons for the

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                                       29
sprinkler head's failure and, hence, three possible target defendants. Plaintiff

failed to do so, and, as a result, the judge properly granted summary judgment.

      Affirmed.

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