LUZZI v. HUB INTERNATIONAL NORTHEAST LTD et al
Filing
51
OPINION. Signed by Judge Kevin McNulty on 8/21/18. (cm, )
UNITED STATES DISTRICT COURT
FOR TUE DISTRICT OF NEW JERSEY
JUDY LUZZI,
Civ. No. 15-6064
Plaintiff,
V.
OPINION
HUB INTERNATIONAL NORTHEAST
LTD., and FIDELITY AND
GUARANTY INSURANCE
UNDERWRITERS, INC., a subsidiary
of The Travelers Companies, Inc.
Defendants.
The plaintiff, Judy Luzzi, brings this action against HUB International
Northeast Ltd. (“HUB”) and Fidelity and Guaranty Insurance Underwriters, Inc.
(“Fidelity”), an affiliate of The Travelers Companies, Inc. (“Travelers”).’
Defendants now move for summary judgment. As to defendant HUB, the
motion is granted on all Counts. As to defendant Fidelity, it is granted as to
Count I, but denied as to Counts II and III.
In the record, “Travelers” and “Fidelity” are used interchangeably to refer to the
plaintiffs insurer.
In their Answer, Defendants state that Fidelity was incorrectly pled and should
be identified as “Fidelity and Guaranty Insurance Underwriters, Inc.” (Ans. at 1). (See
also Def. Br. 4 n.2j (“Fidelity is an underwriting company within The Travelers
Companies, Inc.”).)
Defendants also state that HUB was incorrectly pled and should be identified as
“HUB International Northeast Limited.” (Ans. at 1).
1
I.
Background
A. Relevant Facts2
In December 2013, at the suggestion of her real estate agent, Ms. Lu2zi
decided to obtain renter’s insurance before moving into a second-floor
apartment of a two-family home in Woodland Park, New Jersey. (DSMF
¶
1; P1.
Dep. 13:12-:23, 38:6-39:17). She testified that she “was seeking coverage for
renter’s insurance, whatever that covered.” (P1. Dep. 44:12-:13). Thereafter, in
mid to late December, she telephoned the same company that she used for her
auto insurance, Travelers of New Jersey. (Id. at 39:24-40:1, 41:1-:2, 43:13-: 14).
Luzzi spoke to an unidentified individual who told her to call HUB (Id. at 40:19:23), an “insurance agency licensed to issue policies of insurance in the State of
New Jersey.” (Compl.
¶
1. See Ans.
¶
1) (admitting that HUB “is authorized to
conduct business in the State of New Jersey and HUB maintains its principal
place of business in the State of New York”).
For purposes of this motion, I consider Defendants’ Statement of Undisputed
Material Facts in support of their motion for summary judgment (“DSMF”) (ECF No.482), Plaintiffs Responsive Statement of Undisputed Material Facts (“PRSMF”) (ECF No.
49 at p. 2-4) pursuant to Local Rule 56.1, as well as the deposition testimony and
documentary evidence. Facts not contested are assumed to be true.
2
Record items cited repeatedly will be abbreviated as follows:
“Compl.”
=
Complaint (ECF No. 1-1, Exh. A)
“Compl. [I, II or III]”
“Ans.”
=
=
First, Second, or Third Count of Complaint
Answer (ECF No. 6)
“Def. Br.” = Brief in Support of Defendants’ Motion for Summary Judgment
(ECF No. 48-1)
“P1. Opp.” = Plaintiff Luzzi’s Memorandum of Law in Opposition to Defendants’
Motion for Summary Judgment (ECF No. 49 at p. 5-7)
“Def. Reply” = Reply Brief in Further Support of Defendants’ Motion for
Summary Judgment (ECF No. 50)
“P1. Dep.” Portions of Plaintiff Luzzi’s September 20, 2016 Deposition
Testimony (ECF No. 48-4, Exh. A)
“Rod. Dep.” Portions of Anna Rodriguez’s March 24, 2017 Deposition
Testimony (ECF No. 48-4, Exh. C)
2
Luzzi telephoned and spoke to Anna Rodriguez, who she believed was a
representative of HUB. (DSMF
¶ 2; PRSMF ¶ 2; P1. Dep. at 42:20-:22, 43: 1-:2).
According to Luzzi, during that call, Ms. Rodriguez asked her only the following
questions: 1) if she had a fire extinguisher, 2) where the extinguisher was, 3) if
she had a deadlock on the door, and 4) how many rooms were in the
apartment. (Id. at 45:22-:25, 55: 1-:2). Luzzi testified that although she thought
that the renter’s insurance would cover her personal property, no one ever
explained to her what the renter’s insurance would cover. (Id. at 44:14-45:2).
Luzzi testified that Ms. Rodriguez did not ask her about her personal property
or the value of that property. (Id. at 46:10-: 11, 54: 14-:20). According to Luzzi,
Ms. Rodriguez also did not discuss, or ask her about, the dollar limits of
coverage. (Id. at 47:3-:4). See (Id. at 46:10-:17, 50:21-:22). Luzzi testified that
she “trusted” Rodriguez and believed that the questions Rodriguez asked “were
the only questions that needed to be asked.” (Id. at 46:4-:7). See (Id. at 51:1-:4,
54:9-: 13). Because she was not asked, Luzzi did not provide any information
about her personal property.4 (Id. at 54:14-:20).
Ms. Rodriguez had a different recollection of the telephone conversation.
After reviewing her notes of the conversation, Rodriguez testified that she
specifically asked Luzzi about personal property; specifically, she asked about
furs, fine china, jewelry, or other valuable items. (Rod. Dep. 26:16-: 17, 27:8:10). Based on her notes, Rodriguez testified that she explained valuable-item
coverage to Luzzi, who ultimately “declined” such coverage. (Id. at 27:1-:25).
Rodriguez also recalled that she asked Luzzi if she wanted a “platinum
package,” which provided coverage for valuable items on an all-risk basis. (Id.
at 34:8-: 17). Rodriguez’s notes indicate that Luzzi “declined” that package. (Id.
Rodriguez’s notes indicate that the call occurred on December 26, 2013. (Rod.
Dep., Exh. AR-3).
4
Plaintiff Luzzi was also never asked to provide any additional written
information, provide photos of her personal property, or allow an inspection of that
property. (P1. Dep. at 47:25, 51:5-:11).
3
3
at 34:18-: 19. See Rod. Dep., Exh. AR-3 (providing a copy of Rodriguez’s
notes)).5
Thereafter, Luzzi moved into the apartment. She received a letter from
Travelers dated December 30, 2013, which enclosed a copy of a Travelers
renter’s insurance Declarations Page and Homeowners Policy Booklet.6 (P1.
Dep., Exh. A, P-4). The letter identified the policy period as December 26, 2013
through December 26, 2014, and stated, in part:
You will find important documents related to your Travelers policy
and coverage:
Your New Insurance Policy, which includes your Declarations,7
policy form and endorsements. Please take a moment to review
these important materials, especially your Declarations Page, which
shows the coveragcs and limits that you have selected.
(Id.) (emphasis in original). The Declarations Page set a total policy premium of
$126, (ECF No. 48-4, Exh. B at 1). Section I of the form, entitled “Property
Coverages,” set a $15,000 limit for personal property. (Id.) As for the
Rodriguez also testified to her general practices. She stated that with “each and
every customer” for whom she wrote a renter’s policy, she “always” asked “is [$]15,000
sufficient or do we need to increase that?”’ (Rod. Dep. at 13:3-:7). If a customer
responded that $15,000 was sufficient, Ms. Rodriguez would not ask any follow-up
questions regarding personal property. (Id. at 14:24-15:2). However, if a customer
stated that S 15,000 was not sufficient but did not know the specific amount of
coverage that he or she needed, Ms. Rodriguez would ask follow-up questions such as
how many bedrooms there were, etc. (Id. at 15:23-:25). On the other hand, if a
customer stated that $15,000 was not sufficient but provided a specific value that was
sufficient, Ms. Rodriguez would use that value and not ask additional questions. (Id. at
15:21-:22).
6
The letter included a Travelers logo in its letterhead and stated, in part, “Thank
you for choosing Travelers for your homeowners insurance.” (P1. Dep., Exh. A, P-4).
The last sentence in the letter stated: “On behalf of HUB INT’L NORTHEAST LTD, we
look forward to serving you!” (Id.)
The Declarations Page also included a Travelers logo, and identified “HUB INT’L
NORTHEAST LTD” as the agent and “Fidelity and Guaranty Insurance Underwriters,
Inc.” as the insurer. (ECF No. 48-4, Exh. B at 1).
7
4
Homeowners Policy Booklet,8 Section I addressed “Property Coverages,”
including coverage for personal property. (Id. at 13-14).
Luzzi did not read the policy because she “wouldn’t have understood it.”
(P1. Dep. 65:14). She explained: “I don’t understand these policies. They’re
written way above my head.” (Id. at 65:15-:16). She also testified that she was
unaware that the policy had limits of coverage for certain types of personal
property, and never read that section of the policy because she “wouldn’t have
understood it, anyway.” (Id. at 73:2-: 11). She stated: “I had the policy and I
figured I was covered.” (Id. at 65:20). Plaintiff placed her copy of the policy in a
filing cabinet. (Id. at 65:19, 71:1-:5).
Nearly
two
months later, on Febmaiy 17, 2014, a flre occurred at Luzzi’s
apartment. (Compl.
¶ 9). After the fire, Luzzi reported the loss to HUB and
Fidelity, and submitted a claim for the loss of her personal property. (PSMF
19; Compl.
¶
¶ 10). Specifically, she submitted “Inventory Submission”
spreadsheets in which she identified the items that were lost in the fire. (P1.
Dep., Exh. P-7) (listing 354 items and the
“quantity
lost” for each of those
items)). These included two decorative figurines each of which had a $750
replacement cost, 475 pairs of shoes with a total replacement cost of $56,350,
an $8,000 full-length mink coat, a $6,000 three-quarter length mink coat, a
$4,500 mid-length mink coat, a $4,000 full-length Persian lamb coat, a $3,000
Persian lamb jacket with a mink collar, four diamond bracelets each of which
had a $2,125 replacement cost, and seven gold bracelets each of which had a
replacement cost of $857.14. According to Luzzi, her actual damages on a
replacement cost basis were $270,000, plus additional living expenses. Fidelity
paid $15,000, the policy’s personal property limit. (PSMF
¶ 20; Compl. ¶ 10).
The cover page for the Booklet includes a Travelers logo and states:
“Homeowners Policy Booklet from Fidelity and Guaranty Insurance Underwriters, Inc.
Waukesha, MR (A Stock Insurance Company).” (Id. at 7. See Ans. ¶ 5 (stating that
Fidelity issued the policy).)
8
B. Procedural History
On June 24, 2015, Luzzi filed a Complaint against HUB and Fidelity in
the Superior Court of New Jersey, Law Division, Passaic County. (Compi.) She
asserts three claims against HUB and Fidelity based on the theory that “[i]n
obtaining a policy of insurance from Fidelity,” HUB was acting as the agent,
servant, workman or employee of Fidelity for the purpose of providing a policy
of insurance issued by Fidelity.” (Id. at
¶
6).
Count I of the Complaint asserts breach of contract. “In obtaining the
policy of insurance for Plaintiff,” HUB, as agent for Fidelity, “either negligently
failed to obtain the correct information from Plaintiff concerning the proposed
insured property” or “failed to transmit the correct information to Fidelity,”
thereby causing Fidelity to limit Plaintiffs recovery “to only $15,000.” (Comp., I
¶
H).
By failing to obtain the proper information in order to obtain
appropriate insurance coverage for [her] premises or, alternatively
in failing to transmit the proper information necessary to obtain
insurance coverage for [her] property, HUB breached its agreement
to obtain reasonable, necessary and proper insurance coverage for
[her] property thereby becoming liable for the resulting damage
caused by Fidelity’s limitation of [her] claim.
(Id. at I
¶
12) (emphasis added).
Count II of the Complaint alleges negligence:
The direct and factual cause of the uncovered losses was the
negligence and carelessness of HUB in failing to obtain the
reasonable, necessary and proper insurance coverage for [her]
property and/or in failing to properly transmit the necessary’
information in order to obtain insurance coverage for [her] property.
(Id. at II
¶
2).
Count III of the Complaint alleges negligence/respondeat superior
liability:
The failure of Fidelity’s agent HUB, acting within the course and
scope of its authority and on the business of Fidelity in failing to
obtain and/or transmit the necessary information is negligence and
such negligence is imputed to Fidelity under the Doctrine of
Respondeat Superior.
6
(Id. at HI
¶ 4).
The Complaint seeks compensatory damages, attorney’s fees, costs of
suit, and “such other relief as the Court may deem equitable and just.” (Id. at
text following I
¶ 12, 119 2, III ¶ 4. See Camp. ¶ 10 (stating that “actual
damages were approximately $270,000.00, plus additional living expenses”).
On August 7, 2015, Defendants removed the case to this federal court
based on diversity jurisdiction under 28 U.S.C.
§ 1332(a). (ECF No. 1). Plaintiff
then filed a Demand for a Jury Trial. (ECF No. 5). On August 25, 2015,
Defendants filed an Answer, Affirmative Defenses, and Jury Demand. fAns.) On
October 14, 2015, Plaintiff filed an Affidavit from Jerome L. Glickman, a New
Jersey-licensed property and casualty resident broker. (ECF No. 7 at
¶ 2).
On January 19, 2018, Defendants filed a motion for summary judgment
(ECF No. 48) and a brief in support of that motion (P1. Br.) On February 6,
2018, Plaintiff filed a brief in opposition to Defendants’ motion. (P1. Br.) On
February 12, 2018, Defendants filed a reply brief. (Def. Reply). The matter is
therefore fully briefed and ripe for decision.
II.
Summary Judgment Standard
Federal Rule of Civil Procedure 56(a) provides that the court should grant
summary judgment “if the movant shows that there is no genuine dispute as to
any material fact and that the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986); Kreschollek v. S. Stevedoriny Co., 223 F.3d 202, 204 (3d Cir.
2000). In deciding a motion for summary judgment, a court must construe all
facts and inferences in the light most favorable to the nonmoving party. See
Hayes v. Harvey, 874 F.3d 98, 103 (3d Cir. 2017). The moving party bears the
burden of establishing that no genuine issue of material fact remains. See
Celotex Corp. v. Catrett, 477 U.S. 317, 322—23 (1986). “[Wjith respect to an
issue on which the nonmoving party bears the burden of proof.
.
.
the burden
on the moving party may be discharged by ‘showing’—that is, pointing out to
7
the district court—that there is an absence of evidence supporting the nonmoving party’s case.” Celotex, 477 U.S. at 325.
Once the moving party has met that threshold burden, the non-moving
party “must do more than simply show that there is some metaphysical doubt
as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). The opposing party must present actual evidence
that creates a genuine issue as to a material fact for trial. Anderson, 477 U.s.
at 248; see also Fed. I?. Civ. P. 56(c) (setting forth types of evidence on which
nonmoving party must rely to support its assertion that genuine issues of
material fact exist), “lUjnsupported allegations
.
.
.
and pleadings are
insufficient to repel summary judgment.” Schoch v. First Fid. Bancorporation,
912 F.2d 654, 657 (3d Cir. 1990); see also Gleason u. Norwest Morty., Inc., 243
F.3d 130, 138 (3d Cir. 2001) (“A nonmoving party has created a genuine issue
of material fact if it has provided sufficient evidence to allow a july to find in its
favor at trial.”). If the nonmoving party has failed “to make a showing sufficient
to establish the existence of an element essential to that party’s cases, and on
which that party will bear the burden of proof at trial,
.
.
.
there can be ‘no
genuine issue of material fact,’ since a complete failure of proof concerning an
essential element of the nonmoving party’s case necessarily renders all other
facts immaterial.” Katz v. Aetna Cas. & Stir. Co., 972 F.2d 53, 55 (3d Cir. 1992)
(quoting Celotex, 477 U.S. at 322—23).
In deciding a motion for summary judgment, the court’s role is not to
evaluate the evidence and decide the truth of the matter but to determine
whether there is a genuine issue for trial. Anderson, 477 U.S. at 249.
Credibility determinations are the province of the fact finder. Big Apple BMW
Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992).
III.
Discussion
The defendants, HUB and Fidelity, move for summary judgment on all
Counts in the Complaint. In particular, Defendants argue that 1) summary
judgment should be granted in favor of Fidelity because Luzzi has not met her
8
burden of proving that Rodriguez breached the standard of care applicable to
insurance agents when placing coverage, and 2) summary judgment should
additionally be granted in favor of HUB because it played no role in the
issuance of the policy. (Def. Br. 11-20).
For the reasons discussed below, as to defendant HUB, the motion for
summary judgment is granted on all Counts. As to defendant Fidelity, the
motion for summary judgment is granted as to Count I, but denied as to
Counts II and III.
A. HUB
-
Counts I, II, and III
Luzzi alleges that she was directed to HUB, an insurance agency, and
that she spoke on the telephone to Rodriguez. Luzzi seems to have inferred that
Rodriguez was employed by HUB. On this record, however, there is no
documentary evidence or testamentary evidence from a person with knowledge
that Rodriguez was in fact employed by HUB.
Defendants admit that in general, “an agency relationship existed
between Fidelity and HUB for the purpose of soliciting, binding, executing, and
servicing insurance policies and endorsements.” (Ans.
1
6). The Declarations
page of the policy lists HUB as agent. This, however, could merely signify that
HUB would be servicing the policy; it does not imply that Rodriguez was
working for HUB at the time of the phone call.
Defendants identify Rodriguez as “a Fidelity telephone sales
representative and order-taker.” (DSMF
¶
2). Luzzi responds, ambiguously, that
Rodriguez was “acting on behalf of Fidelity.” (PRSMF
¶
2). She does not
forthrightly respond to the defendants’ contention that Rodriguez worked
directly for Fidelity, and was not employed by HUB, which did not participate
in the telephone call at issue.
At her deposition, Luzzi did not remember the name of the person to
whom she spoke. (P1. Dep. 43:6-:9). When asked if she knew “that HUB was an
agent for Travelers” she responded “no.” (Id. at 43:24-44:1).
For her own part, Rodriguez testified that she was not employed by HUB,
but directly by Travelers:
9
At the time of her communication with plaintiff, Ms. Rodriguez was
employed by Travelers as a licensed sales agent. Ms. Rodriguez is
now employed in defendant’s claim department in Atlanta, Georgia.
Is what counsel wrote accurate?
Answer: Yes.
(Rod. Dep. 24: 1-:9). Thus Rodriguez, who (unlike Luzzi) has direct knowledge of
the facts, stated clearly that at the time of her communication with Luzzi, she
was employed not by HUB but by Travelers as a licensed sales agent. (Id. at
24:3-:5).
There is no sufficient evidence from which a jury could find that
Rodriguez was acting on behalf of HUB (or held herself out as doing so) when
she engaged in the December 2013 telephone call with Luzzi. The motion for
summary judgment will therefore be granted as to all counts with respect to
HUB.
There is no dispute, however, that Rodriguez acted within the scope of
her employment by Travelers/Fidelity. The remainder of the opinion discusses
the liability of Fidelity for the alleged actions of Rodriguez.
B. Fidelity
-
Counts H and III (Negilgence/respondeat superior)
Counts II and III allege that Fidelity is liable for negligence. Count TI
alleges that Fidelity breached a duty to Luzzi by failing to “obtain the
reasonable, necessary and proper insurance coverage for [herj property and/or
in failing to properly transmit the necessary information in order to obtain
insurance coverage for [her] property.” (Compl. II ¶ 2). That breach, in turn, led
to “uncovered losses.” (Id.) Count III attributes that liability to Fidelity via
respondeat superior. (Compl. III
¶jJ
1-4),
Defendants argue that summary judgment should be granted in their
favor because “[g]iven the utter lack of information provided by [Luzzi]” and
“the absence of any special relationship” between Luzzi and Rodriguez, “there is
absolutely no support” for a claim that Fidelity failed to exercise its duties or
10
that Fidelity owed Luzzi “any duty to provide her with anything more than what
she agreed to purchase.” (Def. Br. 16).
I disagree and find that summary judgment is not appropriate. Whatever
the merits of the defendants’ arguments, I cannot rule on them because there
is a genuine issue of material fact as to the conversation between Luzzi and
Rodriguez that led to the issuance of the renter’s insurance policy.
To prevail on a negligence claim, a plaintiff must prove: “(1) that the
defendant owed a duty of care; (2) that the defendant breached that duty; (3)
actual and proximate causation; and (4) damages.” Femandes v. DAR Da,’.
Corp., 222 N.J. 390, 403—04 (2015). The first element, the existence of a duty,
is “a matter of law to be decided by the court.” Wang v. Allstate Ins. Co., 125
N.J. 2, 15 (1991). The existence of a duty “is largely a question of fairness or
policy,” and “‘[t]he inquiry involves the weighing of the relationship of the
parties, the nature of the risk and the public interest in the proposed
solutions.”’ Id. (quoting Kelly v. Gwinnell, 96 N.J. 538, 544 (1984)). “[T]he legal
determination of the existence of a duty may differ, depending on the facts of
the case.” Id.
“At common law both [insurance] agents and brokers, when acting on
behalf of an insured, owe the insured a duty of due care.” Carter LincolnMercury, Inc., Leasing Div. v. EIYMR Gip., Inc., 135 N.J. 182, 189 (1994). See
President v. Jenkins, 180 N.J. 550, 568 (2004) (internal citations omitted)
(“Brokers and agents generally owe the same duties to an insured
.
.
.
‘Agents,
like brokers, are obligated to exercise good faith and reasonable skill in
advising insureds’ and in informing them of available coverage.”). In Rider v.
Lynch, 42 N.J. 465, 476 (1964), the New Jersey Supreme Court addressed the
scope of the duty that an insurance broker owes to an insured or prospective
insured. Rider recognized that a broker engaged to obtain insurance must
As discussed above, HUB, according to Defendants, “simply played no role
whatsoever in Plaintiffs procurement” of the policy. (Def. Br. at 21). Moreover, HUB
had no speciai relationship with Luzzi and therefore had no duty to provide her with
advice regarding the appropriate limits of insurance coverage. (Id.)
11
exercise “good faith and reasonable skill, care and diligence in the execution of
the commission.” Id. In particular, the broker “is expected to possess
reasonable knowledge of the types of policies, their different terms, and the
coverage available in the area in which his principal seeks to be protected.” Id.
Furthermore, “{a}n insurance agent may assume duties in addition to those
normally associated with the agent-insured relationship” if there is evidence of
greater responsibilities, i.e. a “special relationship.” Glezennan
i.’.
Columbian
Miit. Life Ins. Co., 944 F.2d 146, 150—51 (3d Cir. 1991).’°
Rider “defined the obligations of a broker as (1) to procure the insurance;
(2) to secure a policy that is neither void nor materially deficient; and (3) to
provide the coverage he or she undertook to supply.” President, 180 N.J. at 569
(citing Rider, 42 N.J. at 476). “If an agent or broker fails to exercise the
requisite skill and diligence when fulfilling those obligations, then there is a
breach in the duty of care, and liability arises.” Id. (citing Rider, 42 N.J. at
476). The New Jersey Supreme Court has cautioned, however, that Rider does
not “limit[] the establishing of a broker’s liability to th[o]se three
circumstances.” Bates v. Qambino, 72 N.J. 219, 225 n,2 (1977)).
Here, the alleged liability arises from Rodriguez’s alleged failure to
ascertain Luzzi’s needs and recommend appropriate coverage. “Liability
resulting from the negligent procurement of insurance is premised on the
theory that a broker ‘ordinarily invites [clients] to rely upon his expertise in
procuring insurance that best suits their requirements.”’ Aden ii. Fortsh, 169
N.J. 64, 79 (2001) (quoting Rider, 42 N.J. at 477); see also Carter LincolnMercury, Inc., Leasing Div., 135 N.J. at 189—90 (citations omitted) (identifying
cases where courts have addressed the scope of the duty owed by insurance
“Absent a special relationship, ‘there is no common law duty of a carrier or its
agents to advise an insured concerning the possible need for higher policy limits upon
renewal of a policy.”’ C.S. Osborne & Co. u. Charter Oak Fire Ins. Co., No. A-2182-15T4,
2017 WL 1548796, at *5 (N.J. Super. Ct. App. Div. May 1, 2017) (quoting Wang, 125
N.J. at 11-12). The renewal context, however, assumes that the necessary diligence
was performed earlier, when the policy was written; it is common for policies to be
renewed on similar terms without much ado.
10
12
agents and brokers to the insured, and noting that courts have found that the
duty includes claims alleging that the agent or broker “failed to advise a client
of insurance options” and claims alleging that the agent or broker “failed to
obtained insurance that failed to meet the insureds needs”).
I find that, as a general matter, Fidelity had a duty to ascertain the
customer’s needs and recommend appropriate coverage. There is a genuine
issue, however, as to the scope of that duty under the circumstances, and
whether Fidelity breached that duty.
Defendants assert that “[ajil of the credible evidence compels the
conclusion that Plaintiff accepted the offered coverage of $15,000 for loss of
personal property and specifically declined the option of purchasing additional
coverage.” (Def. Br. 17). They point out that Luzzi paid a low premium for a low
level of coverage, and without objection received the declarations page, which
clearly stated the coverage limits. The jury, they say, could not accept Luzzi’s
position in light of 1) her incredible claim that she did not see or understand
the prominently displayed policy limit of $15,000; 2) her lack of concern about
it until after she sustained a claimed loss of $270,000; or 3) her apparent belief
that she had purchased unlimited coverage for a premium of $126. Defendants
stress that the jury could and should choose instead to credit Rodriguez’s
testimony, corroborated by her contemporaneous notes and the natural
tendency of any sales person to offer more extensive coverage for a higher
premium.
My role here, however, is not to accept the “credible” evidence and
discard the evidence that is less “credible.” On summary judgment, the court’s
job is to determine whether relevant facts are in issue. Anderson, 477 U.S. at
248—49. Viewing the record and drawing all reasonable inferences in the light
most favorable to the plaintiff, I find there is a genuine issue of material fact.
Under such cases as AcIen and Carter Lincoln-Mercury, supra, a broker or
agent selling insurance has some duty to ascertain the customer’s needs and
recommend the appropriate coverage. Rodriguez says she did; Luzzi says she
didn’t. According to Luzzi, Rodriguez simply signed her up for the minimum
13
coverage and made no inquiry whatever as to the value of her personal
property and other relevant matters. I will therefore deny Defendants’ summary
judgment motion as to Plaintiffs negligence claims against Fidelity in Counts II
and III.
C. Fidelity
-
Count I (Breach of Contract)
The parties do not address much attention to Count I of the Complaint, a
claim of breach of contract. I discuss it briefly.
To establish a breach of contract claim, a plaintiff must demonstrate (1)
the existence of “a valid contract between the parties”; (2) the defendant’s
“failure to perform a defined obligation under the contract”; and (3) that the
plaintiff “sustained damages” as a result. EnuiroFinance Qrp., LLC v. Enutl.
Barrier Co., LLC, 440 N.J. Super. 325, 345 (App. Div. 2015) (citing Murphy v.
Implicito, 392 N.J. Super. 245, 265 (App. Div. 2007)).
New Jersey does not recognize a breach of contract claim in connection
with the procurement of insurance. See Carter Lincoln-Mercury, mc, 135 N.J. at
190 (quoting Rider, 42 N.J. at 477) (internal citations omitted) (“Although the
relationship of broker to insured may be described as contractual, our cases
have recognized that the insured ‘does not sue on a contract of insurance.’ The
claim asserted is based on the broker’s negligent failure to procure the
appropriate coverage.”); see also Call u. Czaplicki, No. CIV. 09-656 1, 2010 WL
3724275, at *12 (D.N.J. Sept. 16, 2010) (dismissing breach-of-contract claim
on the basis that “New Jersey does not recognize a breach of contract claim for
conduct that constitutes the negligent procurement of life insurance, and
Plaintiffs fail to allege that Defendants breached any provision of the written life
insurance policy”).
I therefore grant Fidelity’s motion for summary judgment as to Count I.
IV.
Conclusion
As to HUB, the motion for summary judgment is granted as to all
Counts. As to Fidelity, the motion for summary judgment is granted as to
Count I, but denied as to Counts II and III.
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An Order will be entered in accordance with this Opinion.
Dated: August 21, 2018
Hon. Kevin McNulty
United States District Judge
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