Ira Trocki v. Penn National Mutual Casualty Insurance Co
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Opinion
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ______________
No. 22-1483 ______________
IRA TROCKI, trading as Jack Trocki Development, LLC, Appellant
v.
PENN NATIONAL MUTUAL CASUALTY INSURANCE COMPANY ______________
On Appeal from the United States District Court for the District of New Jersey (Civil Action No. 1-19-cv-13638) U.S. District Judge: Honorable Noel L. Hillman _________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a) on March 30, 2023
Before: MATEY, FREEMAN, and FUENTES, Circuit Judges.
(Filed: September 13, 2023) ______________
OPINION* ______________
* This disposition is not an opinion of the full Court and under I.O.P. 5.7 does not constitute binding precedent. FUENTES, Circuit Judge.
Appellant Ira Trocki sued Pennsylvania National Mutual Casualty Insurance
Company (“Penn National”) for fraud related to certain insurance policies. The District
Court granted summary judgment for Penn National. We will affirm the District Court’s
order.
I.
Ira Trocki, the owner of a real estate development and management company,
purchased and renewed commercial insurance policies with Penn National through an
insurance broker from 2006 to 2014. Prior to each annual renewal, Penn National provided
Trocki’s agent with the renewal policy limit and premium to review.
Trocki sued Penn National in federal court, bringing two claims for fraud, one for
common law fraud and one for consumer fraud under the New Jersey Consumer Fraud Act
(“NJCFA”).1 Trocki alleged that Penn National annually increased his coverage limits and
insurance premiums without notice and that it was doing so to account for inflation. Trocki
initially referred to this practice as “Inflation Guard,” but now contends that he meant to
refer to the practice of applying an automatic inflationary increase. The parties agree that
“Inflation Guard,” an optional coverage benefit that an insured must purchase separately,
was not applied to Trocki’s policies.
The District Court treated Trocki’s change in nomenclature as an “entirely new legal
theory,” and rejected it on that basis.2 The Court then explained why this “new” theory
1 N.J. Stat. Ann. § 56:8-1, et seq. 2 JA10.
2 lacked merit in any event, concluding that Trocki fell short of making a prima facie case
for either fraud claim. Trocki now appeals. Because we agree with the District Court’s
holding as to the merits of Trocki’s claims, we will affirm on that basis.
II.
The District Court had jurisdiction under 28 U.S.C. § 1332. We have jurisdiction
under 28 U.S.C. § 1291. We review the District Court’s grant of summary judgment de
novo.3 Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”4
There is a genuine factual dispute “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.”5 All facts are to be viewed in the light most
favorable to the nonmoving party.6
III.
Trocki argues that the District Court improperly granted judgment for Penn National
on his claims under the NJCFA and for common law fraud. The NJCFA prohibits certain
deceptive commercial behavior:
The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such
3 Dondero v. Lower Milford Twp., 5 F.4th 355, 358 (3d Cir. 2021). 4 Fed. R. Civ. P. 56(a). 5 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 6 Jutrowski v. Twp. of Riverdale, 904 F.3d 280, 288 (3d Cir. 2018).
3 person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice . . . .7
For a claim under the NJCFA, a plaintiff must demonstrate (1) unlawful conduct by a
defendant, (2) an ascertainable loss, and (3) a causal relationship between the defendant’s
unlawful conduct and the plaintiff’s loss.8 A cause of action for common law fraud in New
Jersey has five elements: “‘(1) a material misrepresentation of a presently existing or past
fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other
person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting
damages.’”9
Trocki’s argument is that “Penn [National] applied some undisclosed inflation factor
to increase the values of the properties covered by the Penn [National] policies.”10 Trocki
argues that “[t]he increase in building limit due to an automatic inflation increase is
misleading and unclear in that it does not apprise the insured of why the building limit (and
the premium) is being increased.”11 The District Court correctly concluded that Trocki
could not make a prima facie claim of common law fraud or consumer fraud under the
NJCFA. To start, prior to the renewal of each policy, Penn National presented Trocki with
what the new policy limit and premium would be, and Trocki had the opportunity to review.
7 N.J. Stat. Ann. § 56:8-2 (1976) (amended 2022). 8 Zaman v. Felton, 98 A.3d 503, 516 (N.J. 2014) (internal quotation marks and citation omitted). 9 Allstate N.J. Ins. Co. v. Lajara, 117 A.3d 1221, 1231 (N.J. 2015) (quoting Banco Popular N. Am. v. Gandi, 876 A.2d 253, 260 (N.J. 2005)); Williams v. BASF Catalysts LLC, 765 F.3d 306, 317 (3d Cir. 2014). 10 Opening Br. 6. 11 Opening Br. 7.
4 Trocki appears to argue that Penn National had an affirmative duty to disclose its formulas
for calculating its policy limits and premiums, including how it calculated inflation
increases. However, under New Jersey law, there is no “duty to disclose” in a business
transaction absent certain circumstances not present here.12 Trocki was fully informed of
the price and policy limits, and Penn National is not required to disclose precisely how it
reached those numbers. Trocki has therefore failed to show, at a minimum, either a material
misrepresentation, as required for a claim of common law fraud, or unlawful conduct, as
required by the NJCFA.13
IV.
For the reasons stated, we will affirm the decision of the District Court.
12 See Est. of Maglione v. Gulf Oil Corp., 2007 WL 527940, at *5 (N.J. Super. Ct. App. Div. Feb.
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