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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

BANKERS STANDARD INSURANCE COMPANY v. SHARP ELECTRONICS CORPORATION et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
7:14-cv-08107 Search Pacer
ACE Group party(s): 
Court Type: 
Federal
US District Court: 
Southern District of New York
Date Filed: 
Oct 8 2014

The Plaintiff, Bankers Standard Insurance Company as subrogee of Johannes Albeck, by
and through its counsel, Cozen O'Connor, hereby complains of the Defendants and alleges the
following upon information and belief:

THE PARTIES
1. Plaintiff, Bankers Standard Insurance Company as subrogee of Johannes Albeck,
("Plaintiff') is a corporation organized and existing under the laws of the State of Pennsylvania
with its principle place of business located at 436 Walnut Street, Philadelphia, Pennsylvania and
at all times material to this action, was duly authorized to issue policies of insurance in the State
of New York.
2. At all times relevant hereto, Johannes Albeck (hereinafter "Albeck" or the
"Insured") was and is the owner of a residential property located at 126 Beach Avenue,
Larchmont, New York 10538 (the "Subject Premises").
3. Defendant, Sharp Electronics Corporation (hereinafter "Sharp") was and is a
United States subsidiary of Osaka-based Sharp Corporation, and is a New York domestic
business corporation duly authorized to conduct business in the State of New York, with its
principal executive office located, at 1 Sharp Plaza, Mahwah, New Jersey 07495-1123.
4. Sharp is an entity engaged in, inter alia, the business of assembling, designing,
distributing, manufacturing, servicing and/or warranting a variety of electronic technology
products, including air conditioners, heaters, air conditioner and heating products, and/or air
conditioning and heating-related accessories.
5. Defendant, General Electric Company doing business as General Electric
Appliances & Lighting Company (hereinafter "GE") was and is a domestic business corporation
incorporated in the State of New York, duly authorized to conduct business in the State of New
York, with its corporate headquarters located at 3135 Easton Turnpike, Fairfield, Connecticut
06828.
6. GE is an entity engaged in, inter alia, the business of assembling, designing,
distributing, manufacturing,, servicing and/or warranting a variety of electronic technology
products, including air conditioners, heaters, air conditioner and heating products, and/or air
conditioning and heating-related accessories.

JURISDICTION AND VENUE
7. The jurisdiction of this court is invoked pursuant to 28 U.S.C. §1332, as this
action is between citizens of different states and the amount in controversy exceeds $75,000.00,
exclusive of interest and the costs of the action.
8. Venue is proper pursuant to 28 U.S.C. § 1391 in that a substantial part of the
events or omissions giving rise to the claims herein occurred in this district.

FACTUAL ALLEGATIONS
9. Prior to and on December 2,2012, the Insured owned and occupied the Subject
Premises.
10. Prior to December 2,2012, the Insured purchased a Zoneline Air Conditioner and
Heater, (the "Air Conditioner and Heating Unit").
11. The Insured's Air Conditioner and Heating Unit was model number
AZ61H15DABM1, and carried Serial #VT+367407.
12. Defendants Sharp and/or GE designed the Air Conditioner and Heating Unit.
13. Defendants Sharp and/or GE manufactured the Air Conditioner and Heating Unit.
14. Defendants Sharp and/or GE distributed the Air Conditioner and Heating Unit.
15. Defendants Sharp and/or GE had a duty to design, manufacture and distribute Air
Conditioner and Heating Units which are safe and free of defects.
16. Defendants Sharp and/or GE had a duty to warn persons who might reasonably
use the Air Conditioner and Heating Units of latent and/or known dangerous defects.
17. On December 2, 2012, a fire (hereinafter "the Occurrence") occurred at the
Subject Premises causing extensive fire damage, as well as smoke and water damage.
18. The United States Consumer Product Safety Commission announced a voluntary
recall by the Defendants of about 90,600 of the Zoneline Air Conditioner and Heating Units.
19. At the time of the fire, Plaintiff Bankers insured the Subject Premises under an
applicable insurance policy.
20. Following the Occurrence, the Insured submitted a claim to the Plaintiff for, inter
alia, loss and damage to his property and additional expenses.

21. Pursuant to its obligations under its policy of insurance, the Plaintiff has paid and
will pay its Insured and others on his behalf a sum in excess of Eight Hundred Thirty-Four
Thousand Nine Hundred and Sixty-Three Dollars ($834,963.00), for the damages and losses
sustained and is therefore entitled to recover the same amount in this action pursuant to
principles of legal and equitable subrogation.

AS AND FOR FIRST CAUSE OF ACTION
NEGLIGENCE
22. Plaintiff folly incorporates by reference all of the allegations contained in
paragraphs one through twenty-one as though more fully set forth at length herein.
23. It was foreseeable by Defendants Sharp and/or GE, that if Sharp and/or GE
designed, manufactured, and/or distributed Air Conditioner/Heat Units with a latent and/or
known defect and/or if Sharp and/or GE failed to warn of such defects, persons or entities using
the Air Conditioner/Heat Units or in proximity to the Air Conditioner/Heat Units could suffer
property damage and related losses.
24. The fire was the result of a malfunction of the Air Conditioner/Heat Unit in the
course of its ordinary use.
25. The malfunction of the Air Conditioner/Heat Unit was due to a defective
condition in the Air Conditioner/Heat Unit, to wit: internal parts and/or components which were
defective.
26. The Air Conditioner/Heat Unit contained the above defect when it was in
Defendants Sharp and/or GE's possession and control.
27. Defendants Sharp and/or GE breached its duties by designing, manufacturing
and/or distributing the Air Conditioner/Heat Unit with a latent and/or known dangerous defect
internal parts and/or components and/or by failing to warn of the defect and/or by failing to adopt
a safer, practical, feasible, or otherwise reasonable alternative design or formulation for the
internal parts and/or components that could then have been reasonably adopted that would have
prevented or substantially reduced the risk of harm without substantially impairing the
usefulness, practicality, or desirability of the Air Conditioner/Heat Unit.
28. The Occurrence and the resulting property damages were directly and proximately
caused by the carelessness, recklessness and/or negligent acts and/or omissions of the
Defendants.
29. As a direct and proximate result of the aforesaid acts of carelessness, recklessness,
and/or negligent acts and/or omissions of Defendants, their respective representatives, agents
and/or employees, Plaintiff s Insured sustained severe and extensive damage to his real personal
property and incurred additional expenses.
WHEREFORE, the Plaintiff, Bankers Standard Insurance Company as subrogee of
Johannes Albeck, demands that judgment be entered in its favor and against Defendants in an
amount in excess of Eight Hundred Thirty-Four Thousand Nine Hundred and Sixty-Three
Dollars ($834,963.00), together with pre-judgment and post-judgment interest, attorney's fees,
the cost of this suit, and such other relief as this Court may deem just and proper.

AS AND FOR A SECOND CAUSE OF ACTION
BREACH OF CONTRACT
30. Plaintiff fully incorporates by reference all of the allegations contained in
paragraphs one through twenty-nine as though more fully set forth at length herein.
31. Defendants Sharp and/or GE manufactured, sold, and/or distributed the Air
Conditioner/Heat Unit to Plaintiff s Insured.
Case 7:14-cv-08107-NSR Document 1 Filed 10/08/14 Page 6 of 9
32. The Insured paid money under the contract for the Air Conditioner/Heat Unit.
33. The Air Conditioner/Heat Unit was defective and unreasonably dangerous in that
it had a tendency to ignite as a result of the conditions which are more fully alleged above.
34. Defendants breached the contract with Plaintiffs Insured.
35. As a result of the unreasonably dangerous condition of the Air Conditioner/Heat
Unit and the breach of contract, as more fully alleged above, Plaintiffs Insured incurred the
damages alleged above.
WHEREFORE, the Plaintiff, Bankers Standard Insurance Company as subrogee of
Johannes Albeck, demands that judgment be entered in its favor and against Defendants in an
amount in excess of Eight Hundred Thirty-Four Thousand Nine Hundred and Sixty-Three
Dollars ($834,963.00), together with pre-judgment and post-judgment interest, attorney's fees,
the cost of this suit, and such other relief as this Court may deem just and proper.

AS AND FOR A THIRD CAUSE OF ACTION
BREACH OF WARRANTY
36. Plaintiff fully incorporates by reference all of the allegations contained in
paragraphs one through thirty-five as though more fully set forth at length herein.
37. At all times material hereto, the Defendants Sharp and/or GE impliedly and
expressly warranted that the Air Conditioner/Heat Unit was of good and merchantable quality, fit
for its particular purpose and free from defects.
38. The Defendants Sharp and/or GE sold a dangerous Air Conditioner/Heat Unit
which created a dangerous condition that exposed Plaintiffs Insured and her property to an
unreasonable risk of harm.
39. As a result of Defendants Sharp and/or GE's actions and/or omissions, the
Defendants breached its express and implied warranties, including its warranties of
merchantability and fitness for a particular purpose.
40. As a direct and proximate result of Defendants Sharp and/or GE's breaches of the
expressed and implied warranties described above, Plaintiffs Insured incurred the damages
alleged above.
WHEREFORE, the Plaintiff, Bankers Standard Insurance Company as subrogee of
Johannes Albeck, demands that judgment be entered in its favor and against Defendants in an
amount in excess of Eight Hundred Thirty-Four Thousand Nine Hundred and Sixty-Three
Dollars ($834,963.00), together with pre-judgment and post-judgment interest, attorney's fees,
the cost of this suit, and such other relief as this Court may deem just and proper.

AS AND FOR A FOURTH CAUSE OF ACTION
STRICT PRODUCTS LIABILITY
41. Plaintiff fully incorporates by reference all of the allegations contained in
paragraphs one through forty above, as though more fully set forth at length herein.
42. The subject unit's failure and fire and the resulting severe and substantial
damages sustained by Albeck for which Defendants are strictly liable, were directly and
proximately caused by the improper and/or defective design, manufacture, distribution and/or
assembly of the Air Conditioner/Heat Unit manufactured, assembled, sold and/or distributed by
Defendants.
43. The improper and/or defective design, manufacture and/or assembly of the subject
unit, and/or its component parts manufactured, assembled, sold and/or distributed by Defendants,
directly and proximately created a dangerous condition in the Air Conditioner/Heat Unit that
posed an unreasonable risk of harm to the subject premises.
44. The subject Air Conditioner/Heat Unit was designed, manufactured, assembled,
distributed, sold and/or otherwise placed into the stream of commerce by Defendants, as such,
Defendants are strictly liable to Plaintiff Bankers Standard, under the laws of the State of New
York and under the principles set forth in §402 A of the Restatement of Torts, 2d.
45. Upon information and belief, Defendants knew or reasonably should have known
that the aforementioned improper and/or defective design, manufacture, distribution and/or
assembly of the subject Air Conditioner/Heat Unit and/or the component parts manufactured by
Defendants were unreasonably dangerous products which exposed members of the public and the
Albeck's property to an unreasonable risk of harm of damage by failure of the subject Air
Conditioner/Heat Unit and fire.
46. In distributing and/or otherwise placing into the stream of commerce the subject
unit manufactured, the Defendants proximately caused Plaintiffs insured's damages and should
be held strictly liable for the same.
47. As a direct and proximate result of the aforesaid strict liability producing acts and
omissions of Defendants and/or their representatives, agents, servants and/or employees for
which Defendants are strictly liable, Plaintiffs insured has sustained severe and substantial
property damages, including reasonable additional living expenses, the fair and reasonable value
of which is in excess of Eight Hundred Thirty-Four Thousand Nine Hundred and Sixty-Three
Dollars ($834,963.00).
48. Albeck subsequently submitted a claim to Plaintiff, Bankers Standard, for
reimbursement pursuant to the subject policy for the full amount of damages he sustained as a
result of the subject fire damage, as well as smoke and water damage, including the reasonable
costs incurred related to additional living expenses resulting from the subject fire damage.
49. Pursuant to the obligations owed to Albeck under the terms and conditions of the
subject policy, Plaintiff, Bankers Standard, reimbursed Albeck and paid others on his behalf in
an amount in excess of Eight Hundred Thirty-Four Thousand Nine Hundred and Sixty-Three
Dollars ($834,963.00).
50. By virtue of the aforesaid payments and pursuant to the terms of the subj ect
insurance policy, Plaintiff, Bankers Standard, became subrogated, to the full extent of the
payments made, to Albeck's rights of recovery arising out of the subject fire and is entitled to
recover the same amount from the Defendants named in this action.
WHEREFORE, the Plaintiff, Bankers Standard Insurance Company as subrogee of
Johannes Albeck, demands that judgment be entered in its favor and against Defendants in an
amount in excess of Eight Hundred Thirty-Four Thousand Nine Hundred and Sixty-Three
Dollars ($834,963.00), together with pre-judgment and post-judgment interest, attorney's fees,
the cost of this suit, and such other relief as this Court may deem just and proper.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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