Opinion
DOCKET NO. A-4161-13T2
11-20-2015
DOUBLE EAGLE COIN & CURRENCY, a New Jersey Limited Liability Company, d/b/a BERGEN COIN EXCHANGE, Plaintiff-Appellant, v. CLELAND & ASSOCIATES INSURANCE, INC., a Texas Corporation, Defendant-Respondent, and THE TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Defendant.
William J. Rush argued the cause for appellant. Harry D. McEnroe argued the cause for respondent (Tompkins, McGuire, Wachenfeld & Barry LLP, attorneys; Mr. McEnroe, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Messano and Simonelli. On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-7719-12. William J. Rush argued the cause for appellant. Harry D. McEnroe argued the cause for respondent (Tompkins, McGuire, Wachenfeld & Barry LLP, attorneys; Mr. McEnroe, of counsel and on the brief). PER CURIAM
In this insurance broker malpractice case, plaintiff Double Eagle Coin & Currency appeals from the April 3, 2014 Law Division order, which granted summary judgment to the broker, defendant Cleland & Associates Insurance, and dismissed the complaint with prejudice for failure to serve an affidavit of merit. We affirm.
We derive the following facts from evidence submitted by the parties in support of, and in opposition to, the summary judgment motion, viewed in the light most favorable to plaintiff. Angland v. Mountain Creek Resort, Inc., 213 N.J. 573, 577 (2013) (citing Brill v. Guardian Life Ins. Co., 142 N.J. 520, 523 (1995)).
Plaintiff purchased an existing coin business that was then-insured by The Travelers Property Casualty Company of America (Travelers) under a "Coin Dealers Coverage Policy" procured through defendant. When the policy was about to expire, plaintiff's principle, Daniel Williams, contacted defendant and requested coverage for trade shows and transportation of coins to and from trade shows. Defendant advised that the policy would provide this type of coverage, but that coverage was subject to the exclusions and warranties contained in the policy.
According to Williams, he placed approximately $66,000 worth of coins in a locked case into the back seat of his car in preparation for a trade show the next day. He drove to his home, parked his car in his attached garage, locked the car and garage door, and activated the alarm system for the garage. At approximately 11:30 p.m., he awoke from the sound of his car and garage alarms. He discovered that thieves had broken into the garage and car and stole the coins.
Plaintiff reported the theft to the police and defendant and submitted a claim for the stolen coins. Travelers disclaimed coverage based on the following policy provisions:
PERILS EXCLUDED
This policy does not insure against:
D. Loss while the insured property is in or upon any automobile, motorcycle or any other vehicle, unless at the time the loss occurs there is actually in or upon such vehicle the Insured or a permanent employee of the Insured; but this exclusion shall not apply to property in the custody of common carriers specified elsewhere in this policy.
WARRANTIES
It is warranted:
C. That while goods are not in transit, at exhibitions, conventions, shows and off-premises auctions or while not at the Insured's premises, they will be stored within a hotel safe, bank vault or safety deposit box.
BREACH OF WARRANTY CLAUSETravelers stated that the policy did not insure against a loss while the property was in an unattended vehicle or unattended room, and concluded that since the stolen property was located in an unattended vehicle at the time of the loss, there was no coverage under the policy.
If a breach of any warranty or condition in any form or endorsement attached to or made a part of this insurance should occur, which breach, by the terms of such warranty or condition, shall operate to suspend or void this insurance, it is agreed that such suspension or voidance due to such breach shall be effective only during the continuance of such breach, and then only as to the Property therein or other separate locations to which such warranty or condition has reference and in respect of which such breach occurs.
In correspondence to Travelers, plaintiff apparently implied that defendant misrepresented that the policy provided coverage for this type of loss. Defendant responded that at no time did any representative of defendant advise Williams that the policy covered storage of coins in a home or anywhere else. Defendant also indicated that this type of coverage did not exist "within the scope of the program that [it] manage[d] or any other program that [it was] aware of."
Plaintiff filed a complaint against defendant alleging that defendant deliberately and willfully breached its fiduciary duty. Plaintiff asserted claims for declaratory relief, breach of contract, breach of the duty of good faith and fair dealing, and common law fraud.
Plaintiff named Travelers as a defendant. The court dismissed the complaint as to Travelers with prejudice pursuant to Rule 4:6-2(e). Plaintiff does not challenge that dismissal in this appeal.
Plaintiff also asserted a claim for consumer fraud, which was voluntarily dismissed. --------
Defendant filed a motion for summary judgment based on plaintiff's failure to serve an affidavit of merit. In opposition, plaintiff argued there was a genuine issue of material fact as to whether defendant lied about the type of coverage the policy provided, which required a jury's assessment of credibility. Plaintiff also argued that it did not rely on defendant's expertise, knowledge and skill as a professional, but rather, relied on defendant not misrepresenting the coverage provided by the policy. Plaintiff, thus, concluded that this case fell within the common knowledge exception to the affidavit of merit statute.
The trial judge granted summary judgment to defendant. In an oral opinion, the judge found that this case required an expert because the underlying factual allegation in all claims in the complaint required proof of a duty of care and deviation from an accepted professional standard of care for insurance brokers regarding the type of coverage the policy provided. The judge also found that the common knowledge exception did not apply because the policy was a unique commercial policy involving coins that required an expert to determine whether the policy covered coins while in transit, the meaning of the word "transit" in the context in this unique type of coverage, and specifics about policy coverage, limits and exclusions. On appeal, plaintiff reiterates the arguments made before the trial judge.
We review a ruling on a motion for summary judgment de novo, applying the same standard governing the trial court. Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 405 (2014) (citations and internal quotation marks omitted). Thus, we consider, as the motion judge did, "'whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.'" Id. at 406 (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)). If there is no genuine issue of material fact, we must then "decide whether the trial court correctly interpreted the law." DepoLink Court Reporting & Litig. Servs. v. Rochman, 430 N.J. Super. 325, 333 (App. Div. 2013). We review issues of law de novo and accord no deference to the trial judge's legal conclusions. Nicholas v. Mynster, 213 N.J. 463, 478 (2013). Applying these standards, we discern no reason to disturb the judge's ruling.
The New Jersey Affidavit of Merit Statute requires as follows, in pertinent part:
In any action for damages for personal injuries, wrongful death or property damage resulting from an alleged act of malpractice or negligence by a licensed person in his profession or occupation, the plaintiff shall, within 60 days following the date of filing of the answer to the complaint by the defendant, provide each defendant with an affidavit of an appropriate licensed person that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice or work that is the subject of the complaint, fell outside acceptable professional or occupational standards or treatment practices. The court may grant no more than one additional period, not to exceed 60 days, to file the affidavit pursuant to this section, upon a finding of good cause.The statute includes an insurance producer in its definition of "licensed person." N.J.S.A. 2A:53A-26(o).
[N.J.S.A. 2A:53A-27.]
The primary purpose of the affidavit of merit statute is to require plaintiffs to make a showing that their claim is meritorious at an early stage of litigation. Hubbard v. Reed, 168 N.J. 387, 394 (2001). The statute seeks to "weed out frivolous lawsuits early in the litigation while, at the same time, ensuring that plaintiffs with meritorious claims will have their day in court." Id. at 395; see In re Hall, 147 N.J. 379, 391 (1997) (stating that the purpose of the statute is to ensure that a plaintiff's case is meritorious, at an early stage of litigation).
In determining whether the affidavit of merit statute applies to a cause of action, courts have considered three factors:
(1) whether the action is for damages for personal injuries, wrongful death or property damage (nature of the injury);In evaluating the second factor, "courts must look to the underlying factual allegations, and not how the claim is captioned in the complaint[.]" Id. at 114 (citation and internal quotation marks omitted). Notwithstanding the label applied to the cause of action in a complaint, or whether the words "negligence" or "malpractice" are used, an affidavit of merit is required if the underlying factual allegations require proof of a deviation from the professional standard of care. Ibid.
(2) whether the action is for malpractice or negligence (cause of action); and
(3) whether the care, skill or knowledge exercised or exhibited in the treatment, practice or work that is the subject of the complaint [] fell outside acceptable professional or occupation standards or treatment practices (standard of care).
[Triarsi v. BSC Group Servs., LLC, 422 N.J. Super. 104, 114 (App. Div. 2011) (quoting Couri v. Gardner, 173 N.J. 328, 334 (2002)) (internal quotations omitted).]
The common knowledge exception does not apply where the factual allegations require proof of a deviation from the professional standard of care for insurance brokers in the procurement of an insurance policy. Ibid. Whether an insurance broker failed to procure insurance coverage the client requested is an issue of professional duty, and hence, a professional malpractice claim. Rider v. Lynch, 42 N.J. 465, 476 (1964).
Here, the underlying factual allegations in the complaint require proof of a deviation from the professional standard of care for insurance brokers in procuring insurance coverage the client requested. Accordingly, the common knowledge exception does not apply and an affidavit of merit was required to determine whether defendant deviated from the applicable standard of care. Summary judgment was properly granted for plaintiff's failure to serve an affidavit of merit.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION