STATE OF NEW JERSEY VS. RIANNA L. DRINKS(15-05-0679, HUDSON COUNTY AND STATEWIDE)(RECORD IMPOUNDED)
A-2812-15T1
| N.J. Super. Ct. App. Div. | Aug 18, 2017Background
- C.S. Osborne & Co. (plaintiff) purchased a commercial insurance program through broker Bollinger from 2001–2012; the Travelers policy provided Broad Form Flood coverage limited to $1,000,000 for Harrison, NJ properties.
- Bollinger’s March 2012 renewal proposal stated higher flood limits "may be available" and asked plaintiff to advise if it wanted Bollinger to secure quotations.
- Superstorm Sandy (Oct. 29, 2012) caused flood damage well in excess of the $1,000,000 flood limit; plaintiff alleged it never received quotes for higher limits for the Harrison location.
- Plaintiff sued Bollinger for broker malpractice, negligence, breach of contract and related claims; Bollinger moved for summary judgment and the trial court granted it, dismissing plaintiff’s claims with prejudice.
- The trial court concluded Bollinger did not owe a duty to proactively obtain higher-limit flood quotes absent a special relationship showing reliance; the Appellate Division affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bollinger had a duty to solicit and provide higher flood-limit quotes for plaintiff's Harrison property | Bollinger had a fiduciary/special relationship with plaintiff after 12 years of exclusive brokerage and regular contact, creating a duty to obtain and present higher-limit quotes | Absent a special relationship showing reliance, brokers have no common-law duty to advise insureds to increase policy limits; Bollinger offered to obtain quotes if asked | Held for Bollinger: no duty to provide unsolicited higher-limit quotes; no special relationship shown |
| Whether factual disputes precluded summary judgment on whether a special relationship existed | Plaintiff: the long, intimate account management, site visits, and board-level personal contact created disputed facts about reliance | Bollinger: the record shows invitations to request higher limits and no history of Bollinger proactively providing such quotes; no evidence of plaintiff's reliance | Held for Bollinger: no genuine dispute of material fact; court properly determined no special relationship as a matter permitting summary judgment |
| Whether alternative claims (breach of implied good faith, breach of contract, conflict/claims advocacy) survive summary judgment | Plaintiff: Bollinger acted as claims advocate and had a conflict of interest with Travelers, so alternative claims should proceed | Bollinger: record fails to support these claims and plaintiff cannot show proximate causation | Held for Bollinger: alternative claims dismissed for lack of proximate cause and evidentiary support |
| Whether venue rulings are reviewable on appeal | Plaintiff: trial judge erred by not transferring venue to Essex County | Bollinger: proper procedures for changing venue were not followed; no ruling to review | Held: Appellate court declines to reach venue issue because no timely adjudicated transfer order was presented for appeal |
Key Cases Cited
- Rider v. Lynch, 42 N.J. 465 (broker liable for procuring materially deficient policy)
- Wang v. Allstate Ins. Co., 125 N.J. 2 (no common-law duty to advise insureds to increase policy limits absent a special relationship)
- Aden v. Fortsh, 169 N.J. 64 (insurance intermediaries owe fiduciary duties to clients to act in good faith and with reasonable skill)
- President v. Jenkins, 180 N.J. 550 (broker duties: procure insurance, secure a policy that is not materially deficient, provide the coverage undertaken)
- Carter Lincoln-Mercury, Inc. v. EMAR Group, Inc., 135 N.J. 182 (broker duty is not unlimited)