VINCE A. SICARI, ESQ., ETC. VS. THE HARTFORD INSURANCE COMPANY OF THE MIDWEST(C-00243-14, BERGEN COUNTY AND STATEWIDE), A-0492-15T1

Background

Sicari (an attorney) had Hartford insurance covering lawyers' professional liability in the 2010 policy; premium was $2,728.
On May 31, 2011 Hartford mailed notice that it would no longer provide lawyers' professional liability as an endorsement; plaintiff says he never received the notice but it was addressed to his office and Hartford produced a certificate of mailing.
Plaintiff submitted a June 21, 2011 renewal application for malpractice coverage via his broker; Hartford received but did not respond and ultimately issued a 2011 policy (and 2012 renewal) omitting lawyers' professional liability and reflecting a large premium drop (~$2,079).
Plaintiff discovered his malpractice coverage had lapsed in mid-2013 after receiving solicitations and learning of a potential malpractice claim, then sued Hartford seeking retroactive malpractice coverage and indemnification from his broker.
The trial court granted Hartford summary judgment and denied Sicari's summary judgment; it found Hartford’s May 31, 2011 notice complied with regulatory nonrenewal requirements and that Sicari was chargeable with knowledge of the policy change (including the premium drop and declarations page).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Validity/effect of nonrenewal notice	Sicari never received the May 31, 2011 notice; thus he was not effectively notified of coverage reduction	Hartford mailed a compliant nonrenewal notice and produced proof of mailing; statutory/regulatory requirements satisfied	Court held the notice complied with regulatory nonrenewal rules; Sicari was bound despite claiming he did not read it
Whether renewal application created coverage	Sicari argues his June 2011 renewal application was accepted and created a contract for malpractice coverage	Hartford contends it no longer offered malpractice endorsement; application did not bind Hartford or create a contract	Court held application did not obligate Hartford to provide coverage it no longer offered; no contract formed
Insurer's duty to communicate re: application handling	Sicari faults Hartford for not responding to broker and failing to process application	Hartford had no obligation to renew a line it had discontinued; better practice to respond, but not dispositive	Court acknowledged Hartford should have responded but absence of response did not obligate renewal or create coverage
Whether plaintiff was chargeable with constructive knowledge	Sicari contends he reasonably believed he had coverage	Hartford points to certificate of mailing, declarations omission, and dramatic premium drop as constructive notice	Court held Sicari was chargeable with knowledge of policy contents and should have noticed absence of malpractice coverage and premium reduction

Key Cases Cited

Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995) (summary judgment standard and viewing evidence in favor of nonmoving party)
Merchants Indem. Corp. v. Eggleston, 37 N.J. 114 (1962) (insurer must alert insured to coverage changes when feasible)
Bauman v. Royal Indem. Co., 36 N.J. 12 (1961) (insured not bound by reduction in renewal policy if insurer fails to notify)
Trs. of First Presbyterian Church v. Howard Co. Jewelers, 12 N.J. 410 (1953) (offer and acceptance principles for contract formation)
Prather v. Am. Motorists Ins. Co., 2 N.J. 496 (1949) (premium can inform interpretation of coverage)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (standards for summary judgment and genuine issue of material fact)
Lehrhoff v. Aetna Cas. & Sur. Co., 271 N.J. Super. 340 (App. Div. 1994) (insured chargeable with knowledge of policy contents)
Morrison v. Am. Int'l Ins. Co. of Am., 381 N.J. Super. 532 (App. Div. 2005) (insured expected to read original policy; constructive knowledge)