NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2134-22
RQ FLOORS CORP.,
Plaintiff-Appellant,
v.
LIBERTY INSURANCE ASSOCIATES, INC. and PHILIP ZITO,
Defendants-Respondents,
and
LIBERTY MUTUAL INSURANCE and EXCELSIOR INSURANCE COMPANY,
Defendants. __________________________
Argued May 21, 2024 – Decided July 14, 2025
Before Judges Gooden Brown and Natali.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-8840-18. Ryan Milun argued the cause for appellant (The Milun Law Firm, LLC, attorneys; Ryan Milun, on the briefs).
Iram P. Valentin argued the cause for respondents (Kaufman Dolowich & Voluck, LLP, attorneys; Iram P. Valentin and Timothy M. Ortolani, of counsel and on the brief).
The opinion of the court was delivered by
GOODEN BROWN, P.J.A.D.
Plaintiff RQ Floors Corp. appeals from a January 20, 2023 Law Division
order granting summary judgment dismissal of its negligence, breach of duty,
and breach of fiduciary relationship claims against its insurance brokers,
defendants Liberty Insurance Associates, Inc. (LIA), and Phillip Zito. 1 The
claims stem from losses plaintiff sustained in a fire at one of its business
locations. Plaintiff also appeals from separate March 3, 2023 orders denying
reconsideration 2 and denying an extension of discovery to submit an expert
1 Plaintiff settled with defendants Liberty Mutual Insurance and Excelsior Insurance Company on January 11, 2023. 2 Nowhere in its merits brief does plaintiff present any legal argument or citation of law on why the trial court erred in denying reconsideration. As a result, plaintiff has effectively waived this argument on appeal. See N.J. Dep't of Env't Prot. v. Alloway Twp., 438 N.J. Super. 501, 505 n.2 (App. Div. 2015) ("An issue that is not briefed is deemed waived upon appeal."). A-2134-22 2 report. Based on our review of the record and the applicable legal principles,
we affirm.
I.
We glean these facts from the motion record, viewed in a light most
favorable to plaintiff as the non-moving party. Brill v. Guardian Life Ins. Co.
of Am., 142 N.J. 520, 540 (1995). Plaintiff, established in 2010, manufactures
and sells wood flooring materials. Leonid Shekhets serves as plaintiff's
president, and his wife, Elina, 3 is employed as plaintiff's "bookkeeper" and
"office manager." Defendant LIA is an insurance brokerage company and serves
as an agent of the "Liberty Mutual Group." Defendant Zito is a licensed
insurance broker, certified insurance counselor, and associate risk manager.
Zito serves as vice president of LIA's Commercial Division and has worked at
LIA for more than thirty years.
Zito maintained a business relationship with plaintiff for years, primarily
through Elina. Zito "procured certain insurance policies" for plaintiff "through
initial placement and annual renewals" with the Excelsior Insurance Company,
doing business as Liberty Mutual Insurance (Excelsior/Liberty Mutual). These
3 We refer to the Shekhets by their first names to avoid any confusion caused by their common surname and intend no disrespect. A-2134-22 3 policies included "commercial property and commercial general liability
coverage." Zito visited plaintiff's offices "two to three times a year" to talk with
the Shekhets, determine plaintiff's property values and sales volumes, and advise
the Shekhets on appropriate insurance coverage types and amounts. Once a
policy was procured, Zito would explain its provisions to Elina.
Plaintiff's business originally operated out of one location in Ridgefield.
The Ridgefield location had $400,000 of business income and extra expense
coverage through Excelsior/Liberty Mutual. In 2014, plaintiff opened a second
location in South Hackensack. Elina notified Zito about the expansion and
inquired about increasing insurance coverage but was not sure what kind of
policy the company needed. To assess the need, Zito asked Elina about the
nature and operation of the expanded business. In response, Elina informed Zito
that both locations were interdependent and any interruption at one facility
would affect the entire business.
In her deposition testimony, Elina asserted that after she explained the
nature of the expansion to Zito, he told her that the coverage "should be blanket
coverage" and that she first "learn[ed] about . . . blanket coverage" during her
conversation with Zito. In a certification submitted in opposition to the
summary judgment motion, Elina certified that Zito stated "he would obtain
A-2134-22 4 [blanket coverage]" for plaintiff and they "discussed the amount of insurance as
$800,000" because he knew plaintiff was "expanding" and "sales and income
would be increasing." Her understanding was that blanket coverage would
afford $800,000 of insurance "for business interruption" in the event of a loss.
Zito testified at his deposition that he never informed Elina about blanket
coverage and the Shekhets never asked him to obtain blanket coverage. Zito
explained that $800,000 in coverage would have been "far too much coverage
for a company that was only grossing $2.6 million" and $400,000 was enough
for a company grossing that amount. According to Zito, an insurance company
would not "overinsure a company" so any request for an increase in coverage
would have to be supported by "sales figures."
On September 26, 2014, Zito contacted an agent of Excelsior/Liberty
Mutual and requested the addition of $400,000 of business income coverage to
plaintiff's existing policy for the new location. Zito also inquired whether it was
possible to "blanket the two locations" since plaintiff's business involved
"moving inventories in different stages of production between locations." He
stated his sole purpose of blanketing coverage was to "reduce the [total]
premium" plaintiff paid by a "small number." Excelsior/Liberty Mutual
declined Zito's request for blanket coverage.
A-2134-22 5 Zito followed up with plaintiff by asking Elina to complete a "business
income worksheet" (worksheet) in order to gather details about plaintiff's
business, including gross sales, inventory, net sales, revenue, and expenses such
as cost of goods and services, payroll, and the like. At his deposition, Zito
explained that he wanted Elina to complete the business income worksheet to
"determine whether or not there was a need to request additional [business
income] coverage from the carrier."
Zito's initial request to Elina was contained in an October 6, 2014 email,
stating,
With your business growing, I want to make sure we're adequately covered. The attached form is the perfect guide for determining the limit to use. I'm sure it will be easy for you to complete. Do your best, return it to me, and we'll talk.
Zito then attached the worksheet to the email. When Zito did not receive a
response from Elina, he emailed her again on November 21, 2014, stating he
"need[ed] to get detailed worksheets to look at."
Without responding to Zito's latest request for the completed worksheet,
on November 24, 2014, Elina inquired about the breakdown in cost for the
additional coverage. Zito responded that same day:
A-2134-22 6 We added $2,500,000 of stock and equipment to the new location plus liability and it looks like it will cost around $8,000 per year. That's a good price.
You never completed that income application I sent you. We need to do that to determine how much income coverage you need.
The next day, November 25, 2014, at Zito's request, Excelsior/Liberty
Mutual increased the business income and extra expense coverage limits from
$400,000 at just the Ridgefield location to $400,000 for each location, plus an
additional limit of $50,000 for extra expense coverage. As a result, a loss at one
location would only permit recovery of the coverage limit of the location that
suffered the loss. According to Zito, he wanted "to ensure that [plaintiff] had at
least some immediate coverage for the South Hackensack location."
Zito explained that he used "his standard procedure" to determine the
"initial amount of appropriate business income coverage" as a "temporary
solution" until he received the worksheet to confirm the amount. He calculated
the "projected gross sales" for the year by estimating the gross sales from the
prior year "[b]ased upon his discussions with the Shekhets" and plaintiff's self -
reported income provided to Excelsior to secure general liability insurance
coverage. He then calculated a percentage of that projection, 15% to 20%, to
estimate the appropriate level of business income coverage.
A-2134-22 7 After Zito acquired the initial coverage, he again requested the completed
worksheet from Elina on December 11, 2014, February 5, 2015, August 21,
2015, and August 28, 2015. In the February 5, 2015 email request to Elina, Zito
stated: "Correct me if I'm wrong, but I don't believe you ever sent me the form
I gave you to determine the right limit for income coverage, AND I'm sure we're
underestimating your sales now that things are humming. The form will resolve
everything." Elina replied, "You are right." She explained she "underst[ood
Liberty Mutual] need[ed] preliminary [sales] numbers, but [the numbers could
not] be [a] totally huge difference."
In her deposition, Elina testified she requested Zito's assistance "in filling
out the [worksheet]" but the two did not connect. 4 Zito testified he could not
have provided help because he was not an accountant. Elina confirmed that
plaintiff retained an accountant to file its tax returns and that the accountant
would have had access to financial figures needed to complete the work sheet.
Elina also testified that she understood Zito's requests for her to complete the
worksheet to mean that the existing coverage might not have been high enough
for plaintiff's needs.
4 Elina also provided inconsistent testimony regarding whether or not she even received the worksheet attached to Zito's initial email. However, during discovery exchange, it became apparent that plaintiff received the worksheet. A-2134-22 8 Zito never received a completed worksheet. On February 22, 2015, the
policy renewed for the same coverage through February 22, 2016. On
September 16, 2015, plaintiff's Ridgefield location caught fire. Elina notified
Zito of the fire, and Zito filed a claim with the insurer on plaintiff's behalf. The
insurer paid plaintiff $450,000, $400,000 for business income and an additional
$50,000 for extra expense coverage.
In her opposing certification, Elina averred plaintiff was never told by
defendants "that there was no blanket coverage in place in the amount of
$800,000." Elina testified in her deposition that every time she and her husband
discussed the policy with Zito after their initial conversation, Zito gave them the
impression that he would obtain blanket coverage and confirmed that he had
secured blanket coverage after he added the South Hackensack location. 5
Elina also certified that despite her requests for the policy and "the fact
that in the past, . . . Zito would deliver the policies of insurance to [her] at the
5 In her certification, Elina calculated the ultimate business interruption loss to be "in the area of $1.2 million." At his deposition, Zito testified that Elina sent him an audit form after the fire stating that plaintiff's gross sales from March 2015 to February 2016 were $5 million. However, she later instructed him to disregard that figure and resubmitted the form listing approximately $2.5 million instead. Although plaintiff reported gross sales ranging from about $5.3 million to $6.9 million on its 2013 to 2015 federal income tax returns, it never provided that information to defendants.
A-2134-22 9 office," Zito never provided her with "the policy for the February 2015 through
February 2016 renewal." Instead, in response to her request, Zito said "it was
too complicated for [her] to understand and asked what [she] wanted to know
about."6
The fire resulted in significant damage to plaintiff's machinery at the
Ridgefield location. Plaintiff had two dust collection machines that pre-existed
its lease of the building, 7 but the machines were removable equipment and not
permanent fixtures. Although only one of the dust collection machines and the
connecting duct work was damaged as a result of the fire, the fire department's
inspection of the premises determined that neither machine was up to code.
Neither the Shekhets nor Zito was aware of the code issue.
Although the required code upgrade necessitated the replacement of both
machines, given plaintiff's equipment coverage in the policy, the insurer only
paid to replace the machine that was actually damaged in the fire. Plaintiff
would have needed code upgrade insurance coverage to be reimbursed for the
undamaged machine, but plaintiff never asked Zito to procure that type of
6 Elina admitted in her deposition testimony that she did not read the previous years' policies when Zito sent them due to their length. 7 A woodworking company had previously operated at the Ridgefield location and had left behind the two dust collection systems. A-2134-22 10 insurance coverage. Zito also testified that it would have been impossible to
obtain code upgrade insurance for the machines because such coverage is part
of building coverage, and the machines were not fixtures.
After the fire, plaintiff shifted part of its production to the South
Hackensack location and saw a decrease in its production of solid hardwood and
mosaic parquet flooring. In April 2017, plaintiff resumed operations at
Ridgefield and returned to full production.
On December 10, 2018, plaintiff filed a six-count complaint against
defendants LIA, Zito, Liberty Mutual Insurance, and Excelsior Insurance
Company. Counts one and four specifically named defendants LIA and Zito,
collectively, defendants. 8 In count one, plaintiff alleged damages in the amount
of $400,000 resulting from defendants' "negligence, breach of duty, and breach
of fiduciary relationship arising from defendants' position as
producer/broker/agent."
Specifically, plaintiff asserted defendants were negligent in failing "to
obtain the proper coverage." According to the complaint, defendants should
have obtained "$800,000 of business interruption and extra expense coverage
8 Counts two and five demanded reformation of the policy, and counts three and six were against Excelsior/Liberty Mutual only. A-2134-22 11 . . . on a blanket basis," so that the coverage amount would have been available
regardless of where the claim arose. Plaintiff also alleged defendants were
negligent in "fail[ing] to advise plaintiff . . . if the blanket insurance was
unavailable" so that it "could seek coverage[] elsewhere." In count four,
plaintiff alleged defendants negligently failed to acquire proper coverage for
their dust collection machinery and duct work, and also failed to notify plaintiff
it did not have proper coverage "so [it] could obtain such coverage elsewhere."
Defendants filed a contesting answer and separate defenses on March 22,
2019. The discovery end date (DED) was set for January 31, 2022. On March
15, 2022, the trial judge issued a trial notice and advised the parties that trial
was scheduled for June 20, 2022. At plaintiff's request, the judge adjourned the
trial to October 11, 2022. 9 On June 21, 2022, after the DED, the judge conducted
a case management conference during which he informed plaintiff that it had to
submit a motion to extend discovery to provide an expert liability report. On
August 12, 2022, after plaintiff failed to file a motion to extend discovery,
defendants moved for summary judgment, arguing that because there was no
evidence of a special relationship between plaintiff and defendants, the
9 Despite the DED, Zito's deposition was conducted on February 17, 2022, and April 26, 2022. A-2134-22 12 professional negligence claims required expert testimony, which plaintiff failed
to produce.
After multiple adjournments, most of which were requested by plaintiff,
the judge heard oral argument on defendants' motion on January 20, 2023. On
the same date, the judge entered an order granting defendants summary
judgment and dismissing counts one and four with prejudice. In an
accompanying oral opinion, at the outset, the judge found that plaintiff's
opposition to the motion was "procedurally deficient" for failure to comply with
Rule 4:46-2(b) and Rule 4:46-5(a). According to the judge, plaintiff "failed to
cite any portion of the record in its response [to] defendants' statement of facts."
As such, "all defendants' alleged statements [were] deemed admitted for the
purpose of th[e] motion."
Despite the procedural deficiency, the judge "address[ed] the . . . merits[,]
assuming th[at] . . . plaintiff . . . had actually complied with the rule." After
discussing the facts, procedural history, and governing legal principles, the
judge determined there was "no evidence that . . . there was a special
relationship" between Zito and plaintiff. According to the judge,
[p]laintiff alleges nothing more than a typical relationship between the insurance broker and a client. Zito met with the insured, learned about the business, and used his . . . professional expertise and experience
A-2134-22 13 to identify the appropriate types of coverage and the limits.
Plaintiff's contention that because Zito suggested that [$]800,000 was an appropriate level of insurance, he went beyond the duties normally associated with an insurance broker is not persuasive. That's precisely what a broker such as Zito need[s] to do. If . . . there was a special relationship in this case, there would be a special relationship in every broker case. Plainly that's not the law. A . . . special relationship is the exception and it exists only when the broker assumes duties in addition to the normal broker/insured relationship.
The judge stated further that Elina's certification did not support plaintiff's
contention that "Zito made a promise to obtain [blanket coverage]," as " [a]ll
[Elina was] willing to say" was that Zito suggested to her that $800,000 would
be "an appropriate level of insurance" coverage. The judge explained that "a
conversation" was "not a promise" that would give rise to liability under a
special relationship theory if "he failed to do that."
Because the claims "involve[d] professional negligence," the judge then
determined that plaintiff's failure to "advance expert testimony establishing an
accepted standard of ca[re]" was fatal to its case. The judge expounded:
[D]efendants served an interrogatory requesting that plaintiff identify any experts upon which plaintiff intended to rely. . . . Plaintiff responded that any experts would be identified at [a] later date. And plaintiff never identified any experts and does not contend that it did.
A-2134-22 14 This case involves complex insurance issues including the appropriate limits of business income and extra expense coverage that should have been secured after [plaintiff] opened the South Hackensack location. Whether . . . blank[et] coverage should have been obtained, and, if so, the amount of coverage. Whether such coverage . . . could have been obtained based on [plaintiff]'s business at the time. Whether the broker should have identified the potential code and coverage issues relating to the dust collection system in the Ridgefield location. And whether such coverage was available.
. . . [A]ll of these issues are plainly beyond the ken of the average juror, and without expert testimony, the jury would be left speculating about the broker's alleged duties and whether a breach of those duties proximately caused plaintiff's . . . damages.
The judge thus rejected plaintiff's contention that the common knowledge
doctrine applied to obviate the need for expert testimony. He also determined
that plaintiff's affidavit of merit did "not satisfy plaintiff's obligation to identify
an expert for purposes [of] trial" as the affidavit provided expressed a
"conclusory" opinion that defendants' conduct "fell outside accepted
professional standards and practices of an insurance broker," gave "no basis" for
this conclusion, and did not "specify any applicable duty or breach of duty."
On February 8, 2023, plaintiff moved for reconsideration of the order
granting summary judgment. Shortly thereafter, on February 15, 2023, plaintiff
filed a motion to extend discovery to retain an expert. In support of the latter
A-2134-22 15 motion, plaintiff submitted a certification of counsel recounting that "[a]fter
commencement of the action," plaintiff had "filed an [a]ffidavit of [m]erit by
Philip Lieberman of Lieberman Consulting Services, LLC," who, upon receipt
of Zito's deposition transcript, was asked to prepare an expert report regarding
defendants' "professional liability."
According to plaintiff's counsel, while awaiting the report, he received a
letter from Lieberman dated October 19, 2022, indicating that the report would
not be completed for "at least seven to ten more days" because "[Lieberman's]
office had been hacked[,] substantially impairing the use of his computer
system." Thereafter, Lieberman notified plaintiff's counsel in an undated
communication that due to "a combination of age and other factors, he was
retiring from professional consulting duties" and would not be able to complete
"a final report for submission to . . . defendants." In the motion to extend
discovery, plaintiff's counsel sought an order allowing the retention of "a
substitute professional insurance liability expert within thirty days from the date
of the entry of the order," with "[a]ppropriate time . . . for the defense to depose
the proposed expert and submit a report thereafter of its own expert."
On March 2, 2023, the judge heard oral argument on plaintiff's motions.
In separate orders dated March 3, 2023, the judge denied both motions. In
A-2134-22 16 support, the judge placed an oral opinion on the record on March 2, 2023. For
the motion for reconsideration, the judge noted that plaintiff was "simply
rehashing the arguments made on the initial motion."
However, regarding plaintiff's difficulty finding an expert, the judge
stated:
Not only . . . were those arguments not ever made, and, clearly, they could have been made because . . . if . . . plaintiff was having trouble finding an expert, . . . plaintiff had months and months. . . to tell me that [it was] having trouble finding an expert. . . . In fact, the [only] argument that was made [in opposition to the summary judgment motion] was that they didn't need an expert.
Because this argument was a new argument, the judge concluded that it was
barred on a motion for reconsideration. See Medina v. Pitta, 442 N.J. Super. 1,
18 (App. Div. 2015) (explaining that a reconsideration motion "does not provide
the litigant with an opportunity to raise new legal issues that were not presented
to the court in the underlying motion").
The judge continued:
I don't find any basis to . . . reconsider my decision . . . regarding the special relationship. There is nothing unique about this case or unusual about this case. This is a standard . . . broker/client relationship. This is not a special relationship case. . . .
A-2134-22 17 . . . I am not even remotely persuaded that you don't need an expert. . . . [T]his is a complicated insurance brokerage liability case. . . . [P]laintiff has to establish that it was a deviation from the standard of care for . . . Zito not to obtain, in this case plaintiff contends $800,000 in blanket coverage for the business. . . . That would require expert testimony on . . . the issue of . . . whether [$]800,000 was appropriate, and whether failure to obtain $800,000 [in coverage] was a deviation from the standard of care.
Further, the judge again rejected plaintiff's argument that the common
knowledge doctrine abrogated the need for an expert because "[t]here is no
evidence" that defendants "promised to get . . . $800,000 worth of blanket
coverage" for the business. According to the judge, Elina would only "certif[y]
. . . that [she and Zito] discussed [that figure]." Likewise, the judge explained
that "whether the coverage should have included code upgrade coverage" was
"plainly the subject of expert testimony."
As to the motion to extend discovery, the judge found that plaintiff had
"ample time[,] [y]ears, in fact, to obtain an expert" and "chose not to get [one]."
Instead, plaintiff "approach[ed] th[e] case . . . from the standpoint . . . that . . .
plaintiff didn't need an expert." Thus, the judge found "no support" for the
motion and rejected plaintiff's claim that there were "extraordinary
circumstances." This appeal followed.
A-2134-22 18 On appeal, plaintiff argues the judge erred in granting summary judgment
because "[a]n expert is not necessary to establish the special relationship
between [plaintiff] and Zito." Further, according to plaintiff, "under the
common knowledge doctrine," defendants' "carelessness . . . in failing to secure
the coverage promised and failing to inform [plaintiff] of its inability to secure
the coverage[] is readily apparent to anyone of average intelligence," obviating
the need for expert testimony. Plaintiff also asserts that having established that
defendant "had a duty to secure the coverage promised or inform [plaintiff] that
the coverage was not in place," "[g]enuine material disputes of fact exist as to
[defendants'] breach of duty" to withstand summary judgment. Likewise,
plaintiff argues "a material dispute of fact existed" as to Zito's "failure to
recommend code upgrade coverage." Additionally, plaintiff contends it "should
have been given additional time to secure an expert after the abrupt retiremen t
of its expert late in the litigation" and the judge's refusal to find exceptional
circumstances constituted an abuse of discretion.
II.
Our review is guided by established principles of jurisprudence. "[W]e
review the trial court's grant of summary judgment de novo under the same
A-2134-22 19 standard as the trial court." Templo Fuente De Vida Corp. v. Nat'l Union Fire
Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016). That standard is well-settled.
[I]f the evidence of record—the pleadings, depositions, answers to interrogatories, and affidavits—"together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact," then the trial court must deny the motion. On the other hand, when no genuine issue of material fact is at issue and the moving party is entitled to a judgment as a matter of law, summary judgment must be granted.
[Steinberg v. Sahara Sam's Oasis, LLC, 226 N.J. 344, 366 (2016) (citations omitted) (quoting R. 4:46-2(c)).]
Whether a genuine issue of material fact exists depends on "whether the
competent evidential materials presented, when viewed in the light most
favorable to the non-moving party in consideration of the applicable evidentiary
standard, are sufficient to permit a rational factfinder to resolve the alleged
disputed issue in favor of the non-moving party." Brill, 142 N.J. at 523.
However, "Rule 4:46-2(c)'s 'genuine issue [of] material fact' standard mandates
that the opposing party do more than 'point[] to any fact in dispute' in order to
defeat summary judgment." Globe Motor Co. v. Igdalev, 225 N.J. 469, 479
(2016) (alterations in original) (quoting Brill, 142 N.J. at 529).
"If there is no genuine issue of material fact, we must then 'decide whether
the trial court correctly interpreted the law.'" DepoLink Ct. Reporting & Litig.
A-2134-22 20 Support Servs. v. Rochman, 430 N.J. Super. 325, 333 (App. Div. 2013) (quoting
Massachi v. AHL Servs., Inc., 396 N.J. Super. 486, 494 (App. Div. 2007)). "We
review issues of law de novo and accord no deference to the trial judge's [legal]
conclusions . . . ." MTK Food Servs., Inc. v. Sirius Am. Ins. Co., 455 N.J. Super.
307, 312 (App. Div. 2018).
"[S]ummary judgment cannot be defeated if the non-moving party does
not 'offer[] any concrete evidence from which a reasonable juror could return a
verdict in [that party's] favor[.]'" Housel v. Theodoridis, 314 N.J. Super. 597,
604 (App. Div. 1998) (second and fourth alterations in original) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986)). As such,
"[s]ummary judgment should be granted, in particular, 'after adequate time for
discovery and upon motion, against a party who fails to make a showing
sufficient to establish the existence of an element essential to that party's case,
and on which that party will bear the burden of proof at trial.'" Friedman v.
Martinez, 242 N.J. 449, 472 (2020) (quoting Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986)). Thus, the non-moving party "has the 'burden of
producing . . . evidence that would support a jury verdict[,]' and must 'set forth
specific facts showing that there is a genuine issue for trial.'" Housel, 314 N.J.
Super. at 604 (alteration in original) (quoting Anderson, 477 U.S. at 256).
A-2134-22 21 Procedurally, a "party opposing [a summary judgment] motion shall file a
responding statement either admitting or disputing each of the facts in the
movant's statement." R. 4:46-2(b). Pursuant to Rule 4:46-2, a trial court must
decide a motion for summary judgment based only upon the "factual assertions
. . . that were . . . properly included in the motion [for] and [opposition to] . . .
summary judgment." Kenney v. Meadowview Nursing & Convalescent Ctr.,
308 N.J. Super. 565, 573 (App. Div. 1998). Reviewing courts should also only
consider "those [properly included] factual assertions" on appeal. Ibid.; see also
Est. of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 378 n.3 (2010)
("[We are] bound by the summary judgment factual record developed before the
trial court . . . .").
While a non-moving party is entitled to the benefit of all favorable
inferences in opposing summary judgment, R. 4:46-2(c), a non-moving party's
bare conclusions without factual support by way of a proper certification or
affidavit shall not defeat a summary judgment motion, R. 4:46-5(a). Affidavits
or certifications submitted by the non-moving party must either cite to the record
as required by Rule 4:46-2(b) or meet the personal knowledge requirements of
Rule 1:6-6. R. 4:46-5(a).
A-2134-22 22 Here, we agree with the judge that plaintiff's opposition to the summary
judgment motion was procedurally deficient for failure to comply with Rule
4:46-2(b) and Rule 4:46-5(a). Nonetheless, turning to the merits,
[n]egligence is conduct which falls below a standard recognized by the law as essential to the protection of others from unreasonable risks of harm. In the usual negligence case, it is not necessary for the plaintiff to prove the standard of conduct violated by the defendant. It is sufficient for plaintiff to show what the defendant did and what the circumstances were. The applicable standard of conduct is then supplied by the jury which is competent to determine what precautions a reasonably prudent [person] in the position of the defendant would have taken.
[Fantini v. Alexander, 172 N.J. Super. 105, 108-09 (App. Div. 1980) (quoting Sanzari v. Rosenfeld, 34 N.J. 128, 134 (1961)).]
However, in an ordinary professional negligence case, "the jury is not
competent to supply the standard by which to measure the defendant's conduct,"
and the applicable standard of practice "must be established by expert
testimony." Sanzari, 34 N.J. at 134-35. "In such cases, if the plaintiff does not
advance expert testimony establishing an accepted standard of care," dismissal
is appropriate. Id. at 135. Expert testimony is also required in a professional
negligence case to establish that a deviation from the standard of care
proximately caused the damage. Gardner v. Pawliw, 150 N.J. 359, 375 (1997).
A-2134-22 23 The standard of care encompasses a duty of reasonable care. "It is settled
that to render a person liable on the theory of negligence there must be some
breach of duty, by action or inaction, on the part of the defendant to the
individual complaining, the observance of which duty would have averted or
avoided the injury." Brody v. Albert Lifson & Sons, Inc., 17 N.J. 383, 389
(1955). Determination of whether a duty exists "turns on whether the imposition
of such a duty satisfies an abiding sense of basic fairness under all of the
circumstances in light of considerations of public policy." Hopkins v. Fox &
Lazo Realtors, 132 N.J. 426, 439 (1993). "Th[is] inquiry involves a weighing
of the relationship of the parties, the nature of the risk, and the public interest in
the proposed solutions." Wang v. Allstate Ins. Co., 125 N.J. 2, 15 (1991)
(quoting Kelly v. Gwinnell, 96 N.J. 538, 544 (1984)). "The question of whether
a duty exists is a matter of law properly decided by the court, not the jury . . . ."
Ibid.
"The import of the fiduciary relationship between the professional and the
client is no more evident than in the area of insurance coverage." Aden v.
Fortsh, 169 N.J. 64, 78 (2001). The requirement to act in a "fiduciary capacity"
stems not only from "'the increasing complexity of the insurance industry and
the specialized knowledge required to understand all of its intricacies,'" but also
A-2134-22 24 from the theory that an insurance broker "'ordinarily invites [clients] to rely upon
[the broker's] expertise in procuring insurance that best suits their
requirements.'" Id. at 78-79 (first alteration in original) (first quoting Walker v.
Atl. Chrysler Plymouth, Inc., 216 N.J. Super. 255, 260 (App. Div. 1987); and
then quoting Rider v. Lynch, 42 N.J. 465, 477 (1964)). As such, a broker owes
a common law duty "to exercise good faith and reasonable skill in advising
insureds." Id. at 79 (quoting Weinisch v. Sawyer, 123 N.J. 333, 340 (1991),
superseded on other grounds by statute, N.J.S.A. 17:28-1.9).
As our Supreme Court recently explained:
An insurance broker "is expected to possess reasonable knowledge of the types of policies, their different terms, and the coverage available in the area in which [a] principal seeks to be protected." Aden, 169 N.J. at 79 (quoting Rider, 42 N.J. at 476). The broker's duties are . . . "(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 v. Jenkins, 180 N.J. 550, 569 (2004). "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." Ibid.; accord George J. Kenny & Frank A. Lattal, New Jersey Insurance Law § 10-8, at 316 (2022) ("If the broker neglects to procure the appropriate insurance coverage or if the policy obtained is void or materially deficient or does not provide the coverage the broker undertook to obtain, then the broker becomes liable to the principal for the resulting loss."). As we have observed, "insurance companies
A-2134-22 25 and brokers have a duty to advise insureds of their coverage needs where the insurer is aware of a particular peril." Sears Mortg. Corp. v. Rose, 134 N.J. 326, 349 (1993). "The concept is essentially one of professional malpractice." Aden, 169 N.J. at 79.
[Holm v. Purdy, 252 N.J. 384, 404-05 (2022) (citations reformatted).]
"Ordinarily, insurance brokerage is a field beyond the ken of the average
juror," thereby requiring expert testimony. Satec, Inc. v. Hanover Ins. Grp.,
Inc., 450 N.J. Super. 319, 334-35, (App. Div. 2017). However, under the
common knowledge doctrine, a plaintiff need not use an expert to prove
"'obvious' cases of negligence where a broker's conduct does not comport with
[the common law standards referenced in] Rider, 42 N.J. at 476." Satec, 450
N.J. Super. at 335 (citation reformatted). Still, in such cases, the common
knowledge doctrine "is to be construed narrowly." Id. at 334 (citing Hubbard
ex rel. Hubbard v. Reed, 168 N.J. 387, 395-96 (2001), superseded on other
grounds by statute, N.J.S.A. 2A:53A-27).
Alternatively, the "special relationship" theory of liability is "not one
based on [an] insurance agent's professional training or standards." Triarsi v.
BSC Grp. Servs., LLC, 422 N.J. Super. 104, 117 (App. Div. 2011). "Instead,
the basis of the claim is that the insurance agent 'assume[d] duties in addition to
those normally associated with the agent-insured relationship' [through] conduct
A-2134-22 26 that invited [the insured's] detrimental reliance." Ibid. (first alteration in
original) (quoting Glezerman v. Columbian Mut. Life Ins. Co., 944 F.2d 146,
150 (3d Cir. 1991)). This claim "depends on proof of the parties' conduct" as
opposed to "'a deviation from a professional standard of care.'" Ibid. (quoting
Syndicate 1245 at Lloyd's v. Walnut Advisory Corp., 721 F. Supp. 2d 307, 315
(D.N.J. 2010)). As such, the claim "does not require expert testimony to
establish the existence of a professional standard of care pertaining to insurance
professionals." Ibid.
In evaluating such claims, courts examine the record for evidence of
greater responsibilities taken on by a broker, such as the broker "expressly
contract[ing] to assume additional duties," Sobotor v. Prudential Prop. & Cas.
Ins. Co., 200 N.J. Super. 333, 339 (App. Div. 1984), superseded on other
grounds by statute, N.J.S.A. 17:28-1.9, or the presence of an "arrangement,
custom or course of dealing between [the] plaintiff[] and [broker] other than the
ordinary insurer-insured relationship," Citta v. Camden Fire Ins. Ass'n, Inc., 152
N.J. Super. 76, 78 (App. Div. 1977). The length of the parties' relationship and
their relative expertise can also be relevant. See Glezerman, 944 F.2d at 151;
Sobotor, 200 N.J. Super. at. 340-42.
A-2134-22 27 In Wang, our Supreme Court addressed the foundation for the duty found
in Sobotor, where this court ordered the reformation of an automobile insurance
policy to increase the coverage based on the special relationship between the
agent and the insured and the agent's failure to provide the insured with the "best
available" package of insurance as the insured had requested. Wang, 125 N.J.
at 13 (citing Sobotor, 200 N.J. Super. at 336-38, 341-43). While acknowledging
that a "special relationship" showing an insured's reliance upon a broker could
trigger liability, the Wang Court rejected the plaintiff's request to impose such
a duty upon insurers that would "require[] them 'to periodically and regularly
advise [the insureds] of a need to increase the limits of [their] insurance
coverage" because there were "no allegations of [a] special relationship." Id. at
15-17 (second and third alterations in original). The Court determined "the
obligation to inform homeowners renewing their policies to consider higher
liability limits was not encompassed by the recognized duty of care owed by
agents to their insureds and, therefore, should be imposed, if at all, by the
Legislature." Carter Lincoln-Mercury, Inc. v. EMAR Grp., Inc., 135 N.J. 182,
190 (1994) (citing Wang, 125 N.J. at 18-19).
Here, we agree with the judge that an expert was needed for plaintiff to
prove its professional negligence claims against defendants, and we reject
A-2134-22 28 plaintiff's argument that either a special relationship with Zito or the common
knowledge doctrine obviated the need for an expert report. In its attempt to
establish a special relationship, plaintiff alleges Zito acted not just as a broker
but as a "risk manager" by inspecting plaintiff's premises and equipment over
the years, making recommendations on coverage type and amount, and inducing
plaintiff's reliance on his expertise. Relying on this special relationship,
plaintiff asserts defendants are liable for Zito's failure to obtain appropriate
business income coverage and to secure code upgrade coverage that would have
reimbursed plaintiff for replacing the dust collection machine that was not
damaged in the fire.
We are unpersuaded by plaintiff's "special relationship" argument and
agree with the judge that Zito's actions were within the normal scope of a
broker's duties. "An insurance broker 'is expected to possess reasonable
knowledge of the types of policies, their different terms, and the coverage
available in the area in which [a] principal seeks to be protected.'" Holm, 252
N.J. at 404-05 (quoting Aden, 169 N.J. at 79). Although the parties dispute
whether Zito told Elina about blanket coverage prior to the fire, the record is
clear that there was no express undertaking or promise by Zito to obtain
$800,000 in blanket coverage.
A-2134-22 29 Elina informed Zito about the expansion, the need for the new location to
be added to the policy, and the interdependent nature of both locations.
Although Zito's preliminary attempt to obtain blanket coverage failed, he added
the second location to plaintiff's policy at $400,000 of business income coverage
as a temporary measure while he attempted to acquire financial information from
Elina to justify an increase in coverage with the insurer. Despite persistent
efforts, it is undisputed that Elina failed to complete the worksheet to facilitate
such a request. Thus, if plaintiff was underinsured, it was the direct result of its
own inaction. See President v. Jenkins, 357 N.J. Super. 288, 308 (App. Div.
2003) ("[A]bsent notice or a specific initiating inquiry from the client, it has
been held that an insurance broker has no affirmative duty to advise an insured
of gaps in . . . insurance coverage."), aff'd in part, rev'd in part on other grounds,
180 N.J. 550 (2004).
Similarly, as to the dust collection machinery, Zito never held himself out
to plaintiff as an expert in code upgrade coverage, nor did he expressly contract
to provide such a service. Plaintiff never requested the coverage, and both
plaintiff and Zito were entirely unaware of the "particular peril" of the machines
not being up to code. See Sears, 134 N.J. at 349. Critically, plaintiff presented
no evidence to counter Zito's testimony that it would have been impossible to
A-2134-22 30 procure code upgrade coverage anyway, since the machines were not fixtures.
See Clohesy v. Food Circus Supermarkets, 149 N.J. 496, 503 (1997)
("Foreseeability that affects proximate cause . . . relates to 'the question of
whether the specific act or omission of the defendant was such that the ultimate
injury to the plaintiff' reasonably flowed from defendant's breach of duty."
(quoting Hill v. Yaskin, 75 N.J. 139, 143 (1977))).
We also reject plaintiff's claim under the common knowledge doctrine
because Zito's actions in securing only $400,000 of business income coverage
is far afield from the narrow class of "obvious" negligence cases that do not
require expert testimony. Satec, 450 N.J. Super. at 334-35. As the judge stated,
this coverage was "only materially deficient if . . . Zito did not obtain the level
of coverage . . . that a diligent broker should have obtained." Without an expert,
plaintiff cannot demonstrate whether Zito's actions constituted a deviation from
the accepted standard of care of a New Jersey insurance producer.
Plaintiff contends that Zito's alleged promise to obtain $800,000 of
blanket coverage supports its theory of negligence under the common
knowledge doctrine. Indeed, "[a]n insurance broker may be held liable for his
[or her] failure to exercise the requisite skill or diligence [by failing] to issue the
insurance policy he [or she had] promised to procure." Bates v. Gambino, 72
A-2134-22 31 N.J. 219, 225 n.2 (1977) (quoting Cox v. Santoro, 98 N.J. Super. 360, 365 (App.
Div. 1967), disapproved of on other grounds by Harr v. Allstate Ins. Co., 54 N.J.
287 (1969)).
However, under the circumstances, Zito obtaining $400,000 of
"unblanketed" coverage for the second location does not rise to the level of
"obvious" negligent conduct. Satec, 450 N.J. Super. at 335; see Biunno,
Weissbard & Zegas, Current N.J. Rules of Evidence, cmt. 2.3 on N.J.R.E. 702,
at 771 (2025-2026) ("[A] jury should not be allowed to speculate without the
aid of expert testimony in an area where laypersons could not be expected to
have sufficient knowledge or experience.").
Indeed, cases applying the common knowledge doctrine in the insurance
brokerage context have only done so where a broker lacked the knowledge
required by law or the plaintiff remained uninsured or had complete exclusions
in coverage, none of which occurred here. See, e.g., Bates, 72 N.J. at 222-23,
225 (finding broker negligent for ignorance of regulation that would have
provided temporary coverage to client); DiMarino v. Wishkin, 195 N.J. Super.
390, 393-94 (App. Div. 1984) (affirming finding that broker was liable where
he failed to produce coverage or promptly warn client that coverage could not
be obtained); Marano v. Sabbio, 26 N.J. Super. 201, 204, 207-08 (App. Div.
A-2134-22 32 1953) (same); Rider, 42 N.J. at 480-82 (reversing dismissal of claims for same
reasons) Barton v. Marlow, 47 N.J. Super. 255, 260-61 (App. Div. 1957) (same);
cf. Satec, 450 N.J. Super. at 324-27, 334-35 (declining to apply the doctrine
even where an exclusion for flood insurance rendered plaintiff without
reimbursement). Accordingly, expert testimony was required to assist the jury
relative to the intricacies of the fiduciary relationship between Zito and plaintif f
and any breach of duty that may have occurred. See Triarsi, 422 N.J. Super. at
115-16.
In sum, because neither the special relationship nor common knowledge
doctrine applied, summary judgment dismissal of counts one and four was
properly granted due to plaintiff's failure to provide an expert report. In the
absence of expert testimony, plaintiff could not prove as a matter of law its
professional negligence claims.
We now turn to the denial of plaintiff's motion to extend discovery to
allow for the submission of an expert report. "Our scope of review of this
procedural ruling is a narrow one." Quail v. Shop-Rite Supermarkets, Inc., 455
N.J. Super. 118, 133 (App. Div 2018). We review a trial court's discovery
rulings for abuse of discretion. Pomerantz Paper Corp. v. New Cmty. Corp.,
207 N.J. 344, 371 (2011). An abuse of discretion "arises when a decision [was]
A-2134-22 33 'made without a rational explanation, inexplicably departed from established
policies, or rested on an impermissible basis.'" Flagg v. Essex Cnty. Prosecutor,
171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez v. I.N.S., 779 F.2d 1260,
1265 (7th Cir. 1985)). That said, "appellate courts are not to
intervene . . . absent an abuse of discretion or a judge's misunderstanding or
misapplication of the law." Cap. Health Sys., Inc. v. Horizon Healthcare Servs.,
Inc., 230 N.J. 73, 79-80 (2017) (citing Pomerantz, 207 N.J. at 371).
Motions to extend discovery after trial has been scheduled are governed
by the "exceptional circumstances" standard. "[T]he 'exceptional circumstances'
standard . . . applies when the court has fixed an arbitration or trial date" after
discovery has closed. Tynes v. St. Peter's Univ. Med. Ctr., 408 N.J. Super. 159,
169 (App. Div. 2009); accord R. 4:24-1(c) ("No extension of the discovery
period may be permitted after an arbitration or trial date is fixed, unless
exceptional circumstances are shown.").
Under the "exceptional circumstances" standard, a movant must "satisfy
four inquiries" to warrant relief by demonstrating:
(1) why discovery has not been completed within time and counsel's diligence in pursuing discovery during that time; (2) the additional discovery or disclosure sought is essential; (3) an explanation for counsel's failure to request an extension of the time for discovery within the original time period; and (4) the
A-2134-22 34 circumstances presented were clearly beyond the control of the attorney and litigant seeking the extension of time.
[Rivers v. LSC P'ship, 378 N.J. Super. 68, 79 (App. Div. 2005).]
Applying these principles, we discern no abuse of discretion in the judge's
denial of plaintiff's motion to extend discovery to retain an expert. To support
its contention that exceptional circumstances justified the extension, plaintiff
points to the "abrupt retirement of its expert" and medical issues experienced by
plaintiff's counsel, counsel's family, and those in counsel's office. However,
plaintiff never identified an expert until the judge granted the summary
judgment motion on January 20, 2023, a year after the DED, and never filed its
motion for an extension of discovery until over a year past the DED. 10 Under
these circumstances, plaintiff cannot demonstrate that it acted diligently or that
the judge abused his discretion in declining to reopen discovery to allow plaintiff
to serve a yet-to-be-obtained expert report after summary judgment dismissal of
the claims had already been granted.
10 Defendants' point that plaintiff should have cross-moved to extend discovery in response to their summary judgment motion or raised the issue purportedly encountered by its expert while the summary judgment motion was pending, instead of waiting until well after the claims were dismissed with prejudice, is well taken. A-2134-22 35 Although we are sympathetic to the medical issues encountered by
plaintiff's counsel, his family, and his staff, there is no evidence in the record on
appeal that counsel brought these issues to the judge's attention in relation to
counsel's ability to obtain an expert report or that the medical issues factored
into the non-procurement of an expert report. See Zaman v. Felton, 219 N.J.
199, 226-27 (2014) (declining to consider arguments not raised before the trial
court when an opportunity to do so is available unless the questions "go to the
jurisdiction of the trial court or concern matters of great public interest."
(quoting State v. Robinson, 200 N.J. 1, 20 (2009))).
As the judge explained, plaintiff refrained from even securing an expert
until the judge's ruling made it clear that an expert was required to advance
plaintiff's claims. Under the circumstances, plaintiff simply waited too long and
failed to demonstrate exceptional circumstances. See Quail, 455 N.J. Super. at
125, 135-36 (affirming the trial court's orders granting summary judgment
dismissal of the plaintiff's wrongful death claim and survival action and denying
the plaintiff's request to reopen discovery because no exceptional circumstances
existed where the plaintiff had made a "conscious, strategic decision" to rely on
a death certificate to prove causation rather than an expert report).
Affirmed.
A-2134-22 36