Judge sides with auto dealership in Sandy suit

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A State Supreme Court judge has ruled that Five Towns Nissan is entitled to insurance coverage for loss of business due to damage by superstorm Sandy, the Inwood dealership's lawyer said Friday.

However, the insurer, Tower National Insurance Co. of Manhattan, can appeal the bench ruling Thursday by Justice Jeffrey K. Oing in Manhattan, which came on a pretrial motion from Five Towns.

Five Towns' building was damaged and its inventory devastated by the storm Oct. 29, 2012. In April the dealership sued Tower and Schaumburg, Ill.-based Zurich American Insurance claiming they wrongly denied it between $4 million and $5 million in payouts.

The specific amount for loss of business has not yet been calculated, said Five Towns attorney Anthony Bartell, based in New Jersey for McCarter & English, LLP.

Many of the arguments in the single lawsuit against both insurers center around the issue of whether a "storm surge" that did most of the damage should be considered "flood" damage, which carries either lower coverage amounts than a surge or no coverage at all. Tower, which has refused to comment on the case and did not immediately respond to another request for comment Friday, had argued that a flood exclusion in its Five Towns policy precluded coverage for business losses.

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"We said 'no,' and the judge agreed with us," Bartell said. He doesn't expect the Five Towns suit to go to trial until early next year, he said.

Thursday's ruling does not affect another issue in the case -- whether a $2,500 or $5,000 deductible per car should have been applied to the Zurich payout for the more than 450 cars destroyed by the storm surge. Five Towns argues in court papers that it should have been $2,500.

Zurich applied the higher amount. If the loss is considered flood damage, the deductible is higher, meaning the dealer gets a smaller insurance payout.

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