Sandy Contingent Business Interruption Claim

Trump Entertainment Resorts, Inc. v. Lexington Insurance Company, No.: ATL-L-2458-15 (N.J. Super. Ct., Law Div. March 14, 2018)

The court granted summary judgment against Trump Entertainment Resorts and related companies on a $5.1 million claim for alleged lost gambling profits stemming from Hurricane Sandy. Mound Cotton’s clients, Lexington Insurance Company and Aspen Insurance Company, were Trump’s first-party property insurers.

Trump contended that in the aftermath of Hurricane Sandy, its customers in the New York/New Jersey area were adversely affected by property damage to their homes, keeping them from patronizing the casinos and causing a decline in gambling profits at the Trump Taj Mahal and Trump Plaza casinos. Trump based its insurance claim on the policies’ contingent business interruption coverage, which insured against loss “directly resulting from physical loss or damage of the type insured…to property of the type insured, at any locations of direct suppliers or customers.”

Trump asserted that it could prove its claims by submitting the addresses of its regular customers and correlating those addresses with maps of Sandy flooding. The court agreed with the insurers that Trump’s evidence failed in two respects. First, Trump had “not provided any evidence to support [its] contention that post-storm conditions affected actual gambling customers.” Second, there was “a complete lack of evidence” to identify or quantify what portion of the alleged reduction in profits was caused by hurricane damage to customers’ properties, as opposed to other factors. The court rejected Trump’s case—based on the list of customers’ addresses and Sandy flood maps—as “lacking any quantifiable and specific evidence.”

Lexington Insurance Company and Aspen Insurance Company were represented by partner Wayne R. Glaubinger and of-counsel Scott J. Sheldon.


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