NOEL L. HILLMAN, District Judge.
This case concerns the denial of an insurance claim and the interpretation of a protective devices condition in an insurance contract. Presently before the Court is Defendant, United States Liability Insurance Company's ("USLIC") Motion for Summary Judgment, Defendants Biondi Insurance Agency, Inc.'s ("Biondi") and Steven Tramontana's Motion for Summary Judgment and Plaintiff's Cross-Motion for Summary Judgment. For the reasons expressed below, Defendants' motions will be granted and Plaintiff's motion will be denied.
We take our brief recitation of the facts from Defendants' Statements of Material Facts.
Singh stated that he believed he also spoke with Tramontana at some point, but could not remember the content of the conversation. Singh only remembers that he spoke with Tramontana about payment and that at some point an individual at Biondi requested "some building patch up" to be done before issuance of a bond. According to Singh, the request was to fix paint on the building and "some flashing of the roof or something along those lines" before coverage was bound. Singh did not believe "any electrical issue[s]" needed to be fixed nor that Biondi or Tramontana asked him to do so.
Eventually, Biondi — through Tri-State — found that USLIC was willing to insure the property. On September 19, 2014, USLIC issued a property insurance policy covering the premises located at 820 N. Main Road, Vineland, New Jersey.
The schedule required that "[a]ll electric is on functioning and operational circuit breakers."
According to both USLIC's and Plaintiff's expert reports, on May 7, 2015, a fire started in the wiring on the second floor of 820 N. Main Road. USLIC's expert, Louis H. Gahagan, opined that the "main electrical panel" for the second-floor apartment that caught fire was actually a "fuse panel box." Undisputed pictures reveal that, in fact, this was a fuse panel box with four fuses. Plaintiff's own expert admits the existence of this "fused subpanel," states that the "original wiring serving the fuse box was in use," and "3 of the type TL 30A fuses were open and showed signs of current through them."
Plaintiff, however, suggests in his argument that the "fused subpanel was protected by a circuit breaker." Plaintiff suggests that his expert, John M. Tobias, opined that the circuit breaker serving the fused subpanel, was operational and confirmed "no malfunction of the fuses." This is not consonant with the expert's own words, which state, in full: "It is not known if these breaker [sic] functioned (opened) but the report that an occupant functioned the circuit breakers prior to arrival of the fire department
Moreover, Plaintiff points to the expert reports and a Vineland Fire Investigation Unit Incident Report ("Incident Report") to assert that the fuses were not the cause of the fire. Instead, the two expert reports and the Incident Report suggest a wire in the ceiling leading to the ceiling fan was the likely cause of the fire. Defendants do not dispute that this was the likely cause of the fire.
After the fire, Tramontana forwarded Vineland 820's claim to USLIC. Besides this ministerial act, Tramontana testified that Biondi "do[es] nothing with claims" and that he did nothing further with the instant claim. USLIC denied Plaintiff's insurance claim in a June 8, 2015 letter, citing the abovementioned breach of the Protective Device condition.
Plaintiff filed a complaint on May 2, 2017, alleging wrongful denial of claims, bad faith, failure to conduct a reasonable investigation, breach of contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, and requested punitive damages. USLIC answered on June 8, 2017 and Biondi and Tramontana answered on June 9, 2017. Discovery ensued. USLIC filed a Motion for Summary Judgment on December 14, 2017, Plaintiff filed its opposition on January 2, 2018, USLIC filed its reply brief on January 9, 2018. On March 1, 2018, Biondi and Tramontana filed a Motion for Summary Judgment, Plaintiff filed its opposition on April 9, 2018, and Biondi and Tramontana filed their reply brief on April 30, 2018. Plaintiff filed its Motion for Summary Judgment on March 15, 2018, Defendants filed their opposition on April 9 and 10, 2018, and Plaintiff filed its reply on May 1, 2018.
This Court has jurisdiction over Plaintiff's claims under 28 U.S.C. § 1332, as the requirements of diversity are met.
Summary judgment is appropriate where the Court is satisfied that "`the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any,' . . . demonstrate the absence of a genuine issue of material fact" and that the moving party is entitled to a judgment as a matter of law.
An issue is "genuine" if it is supported by evidence such that a reasonable jury could return a verdict in the nonmoving party's favor.
Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact.
Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial.
Before deciding the substantive issues presented in these cross-motions for summary judgment, this Court must first determine which state's law to apply in interpreting the insurance contract. Only USLIC has identified and briefed this choice of law issue. None of the parties dispute — in either their motions, responses, or replies — USLIC's position requiring New Jersey substantive law to be applied.
The first step in determining which state's substantive law should apply is to determine which state's choice of law rules apply. Federal law requires a federal court sitting in diversity to apply the choice of law rules of the forum state in which it sits.
Next, according to New Jersey law, the Court determines whether there is an actual conflict between the state laws at issue.
Finally, the Court determines, in the face of a true conflict, which state's substantive law should apply. When analyzing a fire insurance policy, "a court looks first to the
The choice of law issue here is straightforward. The principal location of the insured risk was the premises located in Vineland, New Jersey. As the Restatement suggests in its commentary, the "location of the insured risk will be given greater weight than any other single contact in determining the state of the applicable law provided that the risk can be located, at least principally, in a single state." § 193, cmt. b.
The other contacts also point to New Jersey. The contract was negotiated in New Jersey by Plaintiff, a Delaware entity, and Biondi, a New Jersey entity. Even though USLIC is a Pennsylvania entity, it included specific New Jersey forms in the insurance policy and argues in favor of the application of New Jersey substantive law, which shows at least it expected the contract to be governed by New Jersey law. Therefore, this Court finds that New Jersey law applies in interpreting this insurance contract.
USLIC's Motion for Summary Judgment focuses on one point: as a condition of providing insurance, Vineland 820 was required to maintain operational circuit breakers for all electric at the premises; Vineland 820 failed to meet this condition. Because Vineland 820 failed to meet this condition, USLIC argues that it has no obligation under the insurance policy to pay for any damage caused by the fire.
Plaintiff resists summary judgment by relying on a few arguments. First, Plaintiff argues that because the use of a fuse (or a non-functioning circuit breaker) was not the cause of the fire, it was "unfair" for USLIC to deny coverage. Second, Plaintiff argues that it did not know of the "Protective Devices Or Services Provisions," that it was an "obscure" provision of the contract, and that USLIC's alleged agents
Before moving to Plaintiff's legal arguments, it is important to first address Plaintiff's fourth argument concerning the language of the insurance provision at issue. As discussed above, the relevant provision does not require Plaintiff's knowledge of "suspension or impairment in any protective safeguard" before the fire for USLIC to deny coverage. In full, the provision states:
Therefore, Plaintiff's argument that knowledge is required is completely unsupported by the provision. As long as Plaintiff "[f]ailed to maintain" circuit breakers for all electricity in the building, USLIC retained the right to not cover loss stemming from the fire.
This Court follows the lead of the New Jersey Supreme Court in interpreting this insurance contract:
This provision of the insurance contract is clear, and thus will be given its plain meaning.
As is apparent from the language of the contract, Plaintiff is also incorrect that USLIC must "connect the loss to the exclusion condition in order for it to be even considered." (emphasis in original). Plaintiff cites no contractual language supporting that argument and this Court finds none in the provision. While the provision requires that the damages at issue must be "caused by or resulting from fire," no language requires that the fire be caused by or resulting from use of fuses or an inoperative circuit breaker. Plaintiff's argument on this point is factually unsupported and incorrect. While this result may seem harsh, to hold otherwise would be to write into the contract a causation requirement where none exists. The Court may not write a better contract for the Plaintiff than the one it bought merely to allow for coverage.
Plaintiffs only remaining refuge lies in the case law.
Instead, Plaintiff argues that this case law is distinguishable. Plaintiff contends that
Plaintiff also argues that because Singh did not read the insurance policy or because Tramontana did not recognize or explain the at-issue provision to Singh (or even because the provision was "obscure"), Plaintiff should not bound by it. Common sense would dictate that words are no more or less enforceable based on whether a person has a read them once or a hundred times. New Jersey case law supports this contention, as USLIC points out, saying: "a policyholder is obliged to read the policy he receives and is bound by the clear terms thereof."
Moreover, USLIC is not legally responsible — meaning it should not suffer the legal consequences, if any — for the actions of Biondi and Tramontana. Plaintiff has presented no evidence that shows that USLIC and Biondi or Tramontana had an agreement, or that either served as the agent of the other. USLIC, on the other hand, has produced Tramontana's deposition testimony that shows that Biondi had no agency agreement with USLIC and could not bind insurance for USLIC. In other words, Biondi did not represent the insurer. Plaintiff's argument is, therefore, factually unsupported.
Finally, this Court addresses the factual argument that Plaintiff's fuses were on a circuit breaker. This argument does not save Plaintiff's coverage. First, the fact that the fuses exist means that less than all of the electricity at the premises was on a circuit breaker. Because electricity was running through the fuse, the electricity going through those fuses was not on a circuit breaker.
This Court finds that the denial of insurance coverage by USLIC for the fire that occurred on May 7, 2015 was proper. As a result, Plaintiff's claims are dismissed for the following reasons:
As a result, USLIC's Motion for Summary Judgment will be granted in full and all claims against USLIC will be dismissed.
Defendants Biondi and Tramontana argue that Plaintiff's claims for wrongful denial of claims, bad faith, and failure to conduct reasonable investigation should be dismissed. They provide three reasons. First, Plaintiff cannot show that their claim was either wrongfully denied or denied in bad faith. Second, Plaintiff misconstrues the nature of the relationships between Biondi, Tramontana, and USLIC. They assert that they are not agents of the insurer, USLIC, so they cannot be held liable for denying the claims or failing to conduct a reasonable investigation of the same. Finally, they argue that Plaintiff has not brought forward any facts to show that Biondi or Tramontana made any omissions or committed any acts that would give rise to these claims.
Plaintiff presents a factually unsupported response. First, Plaintiff relies on its amended complaint, where it seems to allege some sort of derivative liability claim against Biondi and Tramontana. Plaintiff alleges that, as agents of USLIC, Biondi and Tramontana are responsible for their actions. In contradiction, Plaintiff's response to Biondi and Tramontana's motion for summary judgment suggests that the basis for liability was "their dismal failure in not educating/alerting the Plaintiff of the exceptions, whether or not reasonable, known or obscure—the fact is that their oversights are examples of them not handling the matter properly for which they are licensed." This seems to suggest that Biondi and Tramontana have also committed unlawful acts separate and apart from those allegedly committed by USLIC.
Biondi and Tramontana are correct on all points. First, as discussed in the previous section,
Second, Biondi and Tramontana are not agents of USLIC. They have presented sufficient record evidence to support this contention. Tramontana testified in his deposition that he was not an agent of USLIC, did not write the policy, could not bind insurance, and did not determine the viability of or investigate the claim made by Vineland 820. Plaintiff has presented no facts in response. Therefore, any claim made by Plaintiff that rests on an agency relationship cannot stand. Moreover, because Biondi and Tramontana were not the insurers, performed no investigation, and did not determine the viability of an insurance claim they cannot be held liable for claims concerning those actions.
Finally, regardless of the statutes invoked or claims made, Plaintiff has offered no facts in support. Instead, Plaintiff has relied upon the allegations made in its complaint, which is insufficient. Plaintiff is reminded that for "the non-moving party[] to prevail, [that party] must `make a showing sufficient to establish the existence of [every] element essential to that party's case, and on which that party will bear the burden of proof at trial.'"
Defendants Biondi and Tramontana argue that Plaintiff's breach of fiduciary duty claim must be dismissed for two reasons. First, Plaintiff has not retained an expert who has opined that Biondi or Tramontana have breached a professional duty of care owed to Plaintiff. Second, Plaintiff has set forth no evidence showing duty, breach, or causation.
Plaintiff responds by stating that it filed an Affidavit of Merit by Benjamin F. Cloud which stated a breach has occurred.
Plaintiff has not presented any facts showing breach. Since Defendants Biondi and Tramontana have alleged the record contains no facts showing a breach, it is incumbent on Plaintiff to point to the record to show the existence of those facts. Plaintiff has failed to do so. In fact, the only records available to this Court indicate that Plaintiff has established no claim for breach of fiduciary duty. Plaintiff's principal, Singh, does not remember any relevant details concerning his conversation with Tramontana or anyone else, for that matter, at Biondi. Plaintiff cannot show breach without showing some sort of act or omission made by Tramontana or Biondi. For that reason alone, the breach of fiduciary duty claim lodged against Tramontana and Biondi is dismissed.
Finally, Biondi and Tramontana argue that the breach of contract and breach of the implied covenant of good faith and fair dealing claims must be dismissed. Here, they argue that New Jersey law requires, in cases of professional negligence pleaded as breach of contract or breach of an implied covenant of the contract, an underlying showing of professional negligence. Because there was no professional negligence, the breach of contract claim cannot stand. Alternatively, it appears that Biondi and Tramontana argue that Plaintiff has provided no facts to animate the breach of contract claim.
Plaintiff does not present any arguments in its brief in opposition to these specific arguments. Looking at Plaintiff's amended complaint, Plaintiff alleges under the breach of contract section that Tramontana is responsible for USLIC's allegedly wrongful denial of coverage. It appears that Plaintiff has merely reasserted the same UCSPA, UTPA, and/or CFA claims it made before, but packaged them as a breach of contract claim. Moreover, Plaintiff alleges: "Defendant, Steven, being an agent in addition to what has been stated herein above . . . is responsible for misrepresenting and misguiding the Plaintiffs." Plaintiff repeats some of these claims, like unreasonable denial of coverage and failure to conduct a reasonable investigation, again as the basis for its breach of the implied covenant of good faith and fair dealing claim.
As discussed in the sections,
As a result, this Court need not address whether there must be a showing of professional negligence because Plaintiff has failed to provide any facts supporting its contract claims. These claims will be dismissed and the punitive damages claim that is derivative of the above claims will be dismissed as well.
This motion will be denied, as all argument contained in this Motion for Summary Judgment was also contained — nearly word-for-word — in Plaintiff's opposition to USLIC's Motion for Summary Judgment. As such, this argument has been addressed fully in the preceding parts of this opinion. Moreover, it is fatally deficient in three respects, as it contains (1) no Statement of Undisputed Facts pursuant to Local Civil Rule 56.1, (2) no attached factual support for the factual claims made in the motion, and (3) no proposed order or substantiation of damages. As this Court has stated before:
It should go without saying that procedure is important and Plaintiff's counsel is well-advised to remember the potential consequences of a failure to follow the procedural rules governing practice in this Court.
Based on foregoing, Defendants' Motions for Summary Judgment will be granted and Plaintiff's Motion for Summary Judgment will be denied. All claims will be dismissed against all Defendants.
An appropriate Order will be entered.
