Court Dismisses All Claims as to Contractor in Fire Loss Subrogation Action

In a decision dated June 9, 2022, the Hon. Diccia T. Pineda-Kirwan of Nassau County Supreme Court granted the motion for summary judgment brought by our client, Haugland Energy Group, LLC (“Haugland”), seeking dismissal of the plaintiff’s negligence claim against it and dismissal of all of co-defendant PSEG Long Island, LLC’s (“PSEG”) cross-claims. This subrogation action arises out of a fire that occurred on November 25, 2018 at a residence in East Hampton, New York. It is undisputed that the fire was caused by an energized neutral on the utility lines near the home which caused an electrical overload which in turn caused the wiring in the basement of the home to ignite. Prior to the date of the fire, PSEG had hired Haugland to perform storm hardening work across Long Island, including on the circuit servicing the home of plaintiff’s subrogee. Haugland last performed work on the pole at issue 16 days before the fire. The plaintiff alleged that Haugland either negligently performed its work, which lead the insulation around the neutral to break, or that it negligently failed to detect that the insulation was deteriorated. PSEG alleged that it was entitled to either common law or contractual indemnity from Haugland since Haugland deviated from prudent utility practices by failing to replace the damaged portion of wire. PSEG also claimed that it was entitled to coverage as an additional insured under Haugland’s insurance policies pursuant to the terms of the relevant contract.

The Court agreed with our argument that Haugland, having contracted with PSEG, did not owe the plaintiff’s subrogor a duty of care. Further, the Court found that, even if Haugland did owe the plaintiff a duty of care, Haugland could not be held liable for the fire inasmuch as any argument that Haugland was negligent was purely speculative. In terms of PSEG’s cross-claims, the Court agreed with our argument that Haugland did not owe PSEG indemnification either pursuant to the terms of the contract or under the common law given that Haugland was not negligent. Further, the Court rejected PSEG’s arguments with respect to ‘prudent utility practices’ given that Haugland was not hired to inspect the utility lines and performed its work pursuant to the plans generated by PSEG.

Nat’l Gen. Ins. Co. a/s/o Kevin Bishop v. PSEG Long Island, LLC et al., Index No. 615442/2019 (Sup. Ct. Nassau Co., June 9, 2022)

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