MAURICE ISSA, ETC. VS. LLOYDS OF LONDON (L-4937-17, BERGEN COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE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-1346-19T2
MAURICE ISSA, individually,
and d/b/a VENICIA
DIAMONDS & JEWELRY,
Plaintiff-Appellant,
v.
LLOYDS OF LONDON, ALL
POINT INSURANCE AGENCY,
GPV HOLDINGS, LLC, and
PREFERRED MUTUAL,
Defendants,
and
INTERNATIONAL JEWELERS
UNDERWRITERS AGENCY,
LTD, ANTONIO ACOSTA,
and MICHAEL NEMAN,
Defendants-Respondents.
_____________________________
Argued October 20, 2020 — Decided November 4, 2020
Before Judges Yannotti, Haas, and Mawla.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-4937-17.
Peter J. Koulikourdis argued the cause for appellant
(Koulikourdis & Associates, attorneys; Peter J.
Koulikourdis and Joseph Takach, on the briefs).
Charles F. Kellett argued the cause for respondents
International Jewelers Underwriters Agency, Ltd.,
Antonio Acosta, and Michael Neman (Kaufman
Dolowich & Voluck, LLP, attorneys; Robert A. Berns
and Charles F. Kellett, of counsel and on the brief).
PER CURIAM
Plaintiff Maurice Issa, individually and doing business as Venicia
Diamonds & Jewelry, appeals from an October 25, 2019 order granting summary
judgment to defendants International Jewelers Underwriters Agency, Ltd. (IJU),
Antonio Acosta (Acosta), and Michael Neman (Neman). IJU, an insurance
producer; Acosta, its sole shareholder; and Neman, an independent contractor
of IJU; collectively procured plaintiff's insurance policy from Lloyds of London
(Lloyds)1.
In August 2015, an unidentified individual entered plaintiff's store,
assaulted and bound plaintiff, and removed jewelry from the store. Plaintiff
1
We utilize "Lloyds" as opposed to "Lloyd's," which we understand is the actual
name of the company, to be consistent with the record.
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alleged losses in excess of $1 million. He submitted claims for compensation
under his insurance policy, which Lloyds denied following an investigation.
The declination letter, cited the "Stock Records Clause" in the policy,
which stated:
It is a condition under this [i]nsurance that in the event
of a claim being made under this [i]nsurance, the
[i]nsured shall provide [Lloyds] or their representatives
with all available [i]nformation including documentary
evidence, whether these be official or unofficial, of all
purchases, sales and other transactions of insured stock.
This information will be utilized by [Lloyds] or their
representatives to assist in quantifying the amount of
loss claimed.
In the event that the information provided does not
satisfactorily substantiate the quantum claimed,
[Lloyds] shall be liable only for the amount of claim
accounted for. Any settlement beyond this figure shall
be solely at the discretion of [Lloyds] unless otherwise
endorsed herein.
The letter also cited the "Conditions" provision of the policy, which echoed
plaintiff's obligation to produce his stock records, "inventory," "book[] of
account, bills, invoices and other vouchers" requested by Lloyds, and submit to
a deposition if necessary. Notably, the letter cited a paragraph from the
conditions provision, which stated: "If the [i]nsured shall make any claim
knowing the same to be false or fraudulent, as regards amount or otherwise, this
[i]nsurance shall become void and all claims hereunder shall be forfeited."
A-1346-19T2
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The letter concluded as follows:
[Lloyds] claim investigation revealed that Venicia did
not suffer a fortuitous loss recoverable under the
[p]olicy and that you made false or fraudulent
statements regarding the loss details and the amount of
the claim. [Lloyds has] also determined that you failed
to produce requested materials and information that
were material to [Lloyds'] investigation; that Venicia
violated the recordkeeping conditions of the [p]olicy;
and that the violations of the [p]olicy conditions
appreciably and significantly prejudiced [Lloyds]. As
such, [Lloyds does] not owe any coverage under the
[p]olicy for this loss.
In 2017, plaintiff filed a complaint, naming defendants. The complaint
alleged breach of contract against Lloyds; and breach of contract, breach of the
covenant of good faith and fair dealing, fraud, violations of the New Jersey
Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, misrepresentation, unjust
enrichment, and professional malpractice against IJU, Acosta, and Neman.
These claims were premised on plaintiff's allegation that IJU, Acosta, and
Neman falsely represented that the Lloyds policy protected plaintiff against
losses from robbery and that defendants failed to advise plaintiff on the extent
of the policy's coverage. Specifically, plaintiff alleged defendants told him the
policy would contain a "Private Books and Records" endorsement, but instead
it contained the "Stock Records Clause." Plaintiff alleged after discussing the
policy with Neman, plaintiff believed the private books and records endorsement
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would allow him to file a claim without producing tax returns. Plaintiff also
received a letter from Acosta stating the private books and records endorsement
applied to his policy as of May 22, 2013.2 In March 2018, plaintiff filed an
affidavit of merit from a licensed New Jersey insurance producer asserting IJU,
Acosta, and Neman's conduct "fell outside the acceptable professional standards
of practice owed to the [p]laintiff."
In December 2018, the motion judge granted Lloyds summary judgment,
finding plaintiff did not cooperate with its investigation and failed to provide
the information it requested, and therefore Lloyds did not breach its contract
with plaintiff. Plaintiff does not challenge this decision.
The judge extended discovery, originally set to end on July 24, 2018, to
December 21, 2018, June 25, 2019, and then to September 25, 2019. The
deadline for plaintiff's expert report was extended to July 25, 2019. When
plaintiff did not serve an expert report, defendants moved to bar the report and
testimony from plaintiff's expert. The judge ordered plaintiff to serve expert
reports by September 9, 2019, and barred reports served beyond the deadline.
2
A certification filed later by Acosta claimed the private books and records
endorsement encapsulates a variety of recordkeeping endorsements, including
the stock records endorsement in plaintiff's policy.
A-1346-19T2
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Plaintiff did not serve an expert report and defendants moved for summary
judgment, arguing the claims against them could not survive without an expert
to explain to the jury the standard of care, and how defendants departed from it
and proximately caused plaintiff's damages. Defendants also argued the court
should grant summary judgment in their favor because Lloyds denied coverage
due to plaintiff's failure to cooperate and substantiate his losses, which
precluded plaintiff's claims related to the policy endorsements. Plaintiff
conceded the lack of an expert report barred his professional negligence claims.
However, he argued the misrepresentation, fraud, and CFA claims could proceed
to trial without expert testimony because Lloyds denied coverage due to
plaintiff's failure to produce his tax returns, which Acosta and Neman told him
he did not need not produce in the event of a loss.
Following oral argument, the motion judge issued a comprehensive
written decision granting defendants' motion. The judge concluded plaintiff's
claim could not be resolved
absent expert testimony. That is, a person with
expertise in insurance, particularly jewelers loss
insurance, would have to explain to the jury not only
the differences between "Private Books and Records"
coverage and "Stock Records" coverage but also what
is required to substantiate; document; and perfect a loss
under these endorsements. Necessarily, this expert
would need to explain how the declination by Lloyds
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would have been obviated if the "Private B[]ooks and
Records" endorsement was in effect. Such mat[t]ers
. . . are beyond the ken of the average juror. Townsend
v. Pierre, 221 N.J. 36, 35 (2015).
Furthermore, the judge concluded plaintiff's fraud and misrepresentation claims
were "outgrowths of the actions taken by . . . defendants in processing the
policy" and required expert testimony "to demonstrate that the procurement of
a [']Stock Records['] endorsement was appropriate or not and relatedly whether
assuming it was inappropriate it was a proximate cause of the denial of coverage
to plaintiff . . . . Deviation standing alone, without expert testimony as to
causation of damage is insufficient."
We review the grant of summary judgment "in accordance with the same
standard as the motion judge." Globe Motor Co. v. Igdalev, 225 N.J. 469, 479
(2016) (quoting Bhagat v. Bhagat, 217 N.J. 22, 38 (2014)). We must determine
"if the pleadings, depositions, answers to interrogatories and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any
material fact challenged and that the moving party is entitled to a judgment . . .
as a matter of law." R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142
N.J. 520, 540 (1995).
On appeal, plaintiff argues the judge erred by finding an expert report
necessary to prove defendants violated the CFA and the common law fraud,
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misrepresentation, and unjust enrichment claims. Plaintiff asserts the judge
improperly applied the learned professional exception to the CFA claim. He
argues the judge erroneously concluded defendants' actions were not the
proximate cause of both his damages and the failure to be compensated for the
losses from the robbery.
Having reviewed the record in detail, we affirm for substantially the same
reasons expressed in the motion judge's written opinion. We add the following
comments.
Our Supreme Court has stated:
In some cases, . . . the "jury is not competent to
supply the standard by which to measure the
defendant's conduct," and the plaintiff must instead
"establish the requisite standard of care and [the
defendant's] deviation from that standard" by
"present[ing] reliable expert testimony on the subject."
This Court has previously explained that, when
deciding whether expert testimony is necessary, a court
properly considers "whether the matter to be dealt with
is so esoteric that jurors of common judgment and
experience cannot form a valid judgment as to whether
the conduct of the [defendant] was reasonable." In such
cases, the jury "would have to speculate without the aid
of expert testimony."
Cases requiring the plaintiff to "advance expert
testimony establishing an accepted standard of care"
include "the ordinary dental or medical malpractice
case." Sanzari[ v. Rosenfeld], 34 N.J. [128,] 134-35
[(1961)]; accord Bender v. Adelson, 187 N.J. 411, 435
A-1346-19T2
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(2006). In addition, our courts have recognized other
esoteric subject matters requiring expert testimony,
such as "the responsibilities and functions of real-estate
brokers with respect to open-house tours," Hopkins v.
Fox & Lazo Realtors, 132 N.J. 426, 444 (1993),
precautions necessary to ensure "the safe conduct of a
funeral procession," Giantonnio[ v. Taccard], 291 N.J.
Super. [31,] 44 [(App. Div. 1996)], the appropriate
"conduct of those teaching karate," Fantini v.
Alexander, 172 N.J. Super. 105, 108 (App. Div. 1980),
the proper application of "pertinent skydiving
guidelines," Dare v. Freefall Adventures, Inc., 349 N.J.
Super. 205, 215 (App. Div. 2002), and the proper
"repair and inspection" of an automobile, Ford Motor
Credit Co. v. Mendola, 427 N.J. Super. 226, 236-37
(App. Div. 2012).
[Davis v. Brickman Landscaping, Ltd., 219 N.J. 395,
407-08 (2014) (alteration in original) (citations
omitted).]
We do not consider the standard of care required of defendants as insurance
producers any less esoteric than the professions noted in Davis. Only an expert
can explain to the jury differences between the stock records and private books
and records endorsements and their potential impact on plaintiff's coverage.
Thus, expert testimony was required to show that defendant's alleged wrongful
conduct was a proximate cause of plaintiff's damages.
We also reject plaintiff's assertion the judge applied the learned
professional exception as a basis to dismiss his CFA claim. The judge's decision
made no mention of the exception. As the judge noted, even if plaintiff could
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prove defendants misrepresented material facts in producing his insurance
policy, establishment of defendants' representations as the proximate cause of
the coverage declination required expert testimony.
Proximate cause "requires an initial determination of cause-in-fact . . . or
'but for' causation, [which] 'requires proof that the result complained of probably
would not have occurred "but for" the negligent conduct of the defendant.'" New
Gold Equities Corp. v. Jaffe Spindler Co., 453 N.J. Super. 358, 379 (App. Div.
2018) (internal citation omitted) (quoting Conklin v. Hannoch Weisman, 145
N.J. 395, 417 (1996)). A plaintiff must show a defendant's acts or omissions
were a necessary antecedent of the loss. Ibid. (citing Francis v. United Jersey
Bank, 87 N.J. 15, 39 (1981)).
As we noted, the declination letter cited plaintiff's "false or fraudulent
statements regarding the loss" as the basis for the decision not to compensate
plaintiff. Lloyds' certified answers to interrogatories reiterated plaintiff's loss
claim would not have been covered regardless of whether the policy contained
a private books and records endorsement because it denied coverage based on
plaintiff's failure to cooperate with the investigation, which had no connection
to defendants' alleged representations regarding the private books and records
endorsement in the policy.
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Affirmed.
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