In a recent New Jersey case, the Appellate Division upheld a homeowner’s right to sue her neighbor, despite an insurance settlement. In Leonard v. Panitch1 Cheryl Leonard sued her neighbor Pera Panitch for encroaching over the property line and onto Leonard’s property. This dispute arose when Panitch had her stone driveway replenished and installed a new fence.
Leonard made an insurance claim under her title insurance policy, resulting is a monetary settlement. Thereafter, she filed the lawsuit. In defense, Panitch argued that the settlement with the title insurance company was an election of remedy which precluded the lawsuit. The election of remedies doctrine is a type of estoppel wherein a party who has two co-existing but inconsistent remedies elects to pursue one remedy to a conclusion, that party may not sue on the other remedy.
The Court refused to apply the doctrine of election of remedies. The Appellate Division recognized that while the doctrine of election of remedies is recognized in New Jersey, it has long ago been characterized as a harsh and now largely obsolete rule and one to be strictly confined within its reason and spirit.
The Court explained that plaintiff Leonard had brought this suit seeking a remedy that was an alternative to that which she urged against her title insurer. She was not barred from doing so under the doctrine of election of remedies, and it would be unreasonable and contrary to the spirit of that equitable doctrine to transfer ownership of plaintiff’s property to defendant under the circumstances presented.
1 Superior Court Of New Jersey, Appellate Division, Docket No. A-5645-18T1, August 27, 2020
