Ross v. Lowitz

Shortly after plaintiff John Ross signed a contract to sell his home, he learned of contamination on his property as a result of a leak that previously existed in an underground oil storage tank located on a neighboring property. The prospective purchaser then cancelled the contract, and plaintiffs commenced suit against the current and former owners of the neighboring property, and their respective insurers. After the insurers remediated the contamination on the property, the lawsuit proceeded on the claims for damages against all defendants on theories of negligence, strict liability, private nuisance and trespass, as well as violations of the Spill Compensation and Control Act. In this appeal, the issue presented for the Supreme Court's review centered on whether plaintiffs' claims were properly dismissed, and whether plaintiffs could maintain claims as third-party beneficiaries against the insurers which provided coverage to the former owner of the neighboring property where the underground storage tank was located. The Court found no basis for the claims of private nuisance or trespass against the homeowner defendants because there was no proof of negligence, recklessness, intentional conduct, or the conduct of an abnormally dangerous activity, by these parties. Additionally, the Court declined to expand these causes of action to impose strict liability upon defendants. Plaintiffs could not proceed with a direct claim against the defendant insurers for breach of the implied covenant of good faith and fair dealing contained in the insurance contracts because they did not hold an assignment of rights from the named insured, and there was no evidence that the named insured or her insurers agreed to recognize plaintiffs as third-party beneficiaries of the insurance contracts. View "Ross v. Lowitz" on Justia Law