Court Opinion

ID: 9964531
Source: CourtListenerOpinion
Date Created: 2024-04-30 14:07:29.117666+00
Date Added: 2024-06-11T08:25:34.568583
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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-3916-21

SKORR PRODUCTS, LLC, and
ROBERT SKVORECZ,

          Plaintiffs-Appellants,

v.

BOLLINGER, INC., and ARTHUR
J. GALLAGHER & CO.,
individually and as successor in
interest to BOLLINGER, INC.,

          Defendants-Respondents.

                   Submitted February 7, 2024 – Decided April 30, 2024

                   Before Judges Currier and Firko.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Essex County, Docket No. L-7149-17.

                   Goodgold West & Bennett, LLC, attorneys for
                   appellants (David Eric Maitlin, of counsel and on the
                   briefs).

                   White and Williams, LLP, attorneys for respondents
                   (Christopher P. Leise and Marc L. Penchansky, on the
                   brief).
PER CURIAM

      Plaintiffs appeal from the March 4 and July 28, 2022 orders granting

defendants' motion for summary judgment and denying their motion for

reconsideration. We affirm.

                                     I.

      Plaintiff Skorr Products, LLC made and sold chafing dish holders and

stands for buffet dishes, used by catering companies and restaurants. Plaintiff

Robert Skvorecz owned Skorr Products. On February 5, 2014, a fire at plaintiffs'

manufacturing facility caused extensive damage to its machinery, commercial

and personal property, and interrupted Skorr Products's ability to conduct

business.

      Plaintiffs were insured with Franklin Mutual Insurance Company (FMI)

under a policy that provided $1,371,900 in coverage for business personal

property loss and $500,000 for loss of business income. After the fire, plaintiffs

claimed $6,000,000 for loss of business property and $2,000,000 in business

interruption loss. FMI made loss payments to Skorr Products under its policy in

excess of $1,500,000.

      In 2017, plaintiffs instituted suit against their insurance brokers,

defendants Bollinger, Inc. (Bollinger) and Arthur J. Gallagher & Co.

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(Gallagher), as the successor in interest to Bollinger,1 alleging defendants:

breached their duty to meet with plaintiffs and review their insurance, breached

duties imposed on them by the parties' special relationship, and breached their

duty to advise plaintiffs and to obtain for plaintiffs increased coverage. Plaintiffs

alleged Gallagher was liable under a theory of successor tort liability.

       We provide some background information to place plaintiffs' theories of

liability into context. In the mid to late 1990s, the Rork Insurance Agency,

owned by George Rork, began providing insurance brokerage services to Skorr

Products and to Skvorecz personally. According to Rork, he met with Skvorecz

two to three times a year to maintain their business and personal relationship.2

Rork also delivered the insurance policies to Skvorecz, although Skvorecz did

not recall that. Skvorecz also stated he did not review the policies.

       After Bollinger acquired Rork Agency in 2005, Rork worked at Bollinger

and continued to service Skorr Products's account for a period of time. Melissa

Chung also worked at Rork Agency and then became employed at Bollinger after

the acquisition.    In 2007, Chung became responsible for Skorr Products's

1
    Gallagher acquired Bollinger in 2013.
2
  Rork and Skvorecz became personal friends, attending the U.S. Open, golfing,
and visiting one another in Florida.
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account. She advised Skvorecz she was taking over the account and invited him

to contact her with any questions about the policy coverage or if he wished to

make changes to the coverage limits. Rork retired in 2008.

      Bollinger mailed renewal questionnaires to its clients each year shortly

before their new policies were to take effect. The clients were instructed to

complete the questionnaires and return them to Bollinger. Specific questions

asked whether the client needed to make any changes to its business personal

property limits and whether the client had purchased any new equipment in the

past year.   On the bottom of the questionnaire, it stated in bold face and

underlined: "By not returning this questionnaire or calling us to provide changes

for updates, you acknowledge no changes or adjustments are needed to your

existing insurance program and do not desire Bollinger to pursue additional or

optional coverage quotes on your behalf." (boldface and emphasis omitted).

      In January 2013, Bollinger sent Skvorecz a questionnaire regarding the

renewal of the business insurance policy that became effective on March 4, 2013.

According to Chung, neither Skvorecz nor any representative of Skorr Products

ever returned a completed questionnaire during the 2005-2013 time period. In

February 2013, Bollinger sent Skvorecz the insurance policy for Skorr Products

for the period of March 4, 2013 to March 4, 2014.

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      Skvorecz testified during his deposition that he held degrees in business

and engineering.    He stated he made all the business decisions for Skorr

Products, and had complete authority for running the business, including the

procurement of insurance coverage. Skvorecz did not dispute that he received

insurance policies from Bollinger, but he stated he never reviewed the policies

nor questioned the coverage.

      From the time Rork retired in 2008 until 2013, Skvorecz did not contact

Bollinger although he acknowledged its representatives were available to answer

any questions. Skvorecz explained he did not need help valuing his equipment

since he had the necessary information necessary to do it himself. He agreed

that Chung was not in a position to value his equipment. Further, Skvorecz

stated he valued his inventory himself for tax purposes.

      In November 2013, Skvorecz called Rork about insuring the transport of a

machine he had purchased in Michigan. 3 During the call, Skvorecz mentioned

that no one from Bollinger had ever contacted him. After their conversation,

Rork contacted Chung, who called Skvorecz on November 15. According to

Chung, after discussing the cost of insuring the transportation of the new

3
  The machine had not been delivered to the Skorr Products facility at the time
of the fire.
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machine, Skvorecz "mentioned" the equipment at his facility might be

underinsured and requested that FMI inspect it. The same day, Chung emailed

a contact at FMI regarding Skvorecz's request. When Chung heard back from

FMI, she emailed Skvorecz asking for a contact person for the inspection.

Skvorecz did not respond with the name of a contact person.

      Edward Prol, an FMI employee, inspected Skorr Products's machinery on

January 21, 2014. In his report to the underwriting department, Prol stated, "It

was very hard to determine a value, knowing this is a one of a kind . . . operation,

with machinery used specific[ally] for the operations."

      On January 29, 2014, Chung emailed Skvorecz that FMI was unable to

value his machinery because it was custom made. She informed him he could

"either leave the value as is or increase the amount if you feel you are

underinsured."    Chung advised Skorecz the policy contained a $163,000

equipment value.4 Skvorecz did not respond but emailed Chung on February 6,

2014, informing her of the fire the night before. This lawsuit ensued.

4
  According to plaintiffs, the reference to $163,000 was a special endorsement
that covered a truck and two pieces of equipment, not the production machinery.

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                                       II.

      Following the close of discovery, and with a pending trial date, defendants

moved for summary judgment, arguing they did not have a special relationship

with plaintiffs and, therefore, plaintiffs could not establish their breach of

fiduciary duty claim. In opposing the motion, plaintiffs included an expert report

from a former owner of an insurance company. 5 Plaintiffs contended they had a

special relationship with Rork and that Chung's communication with Skvorecz

regarding the valuation of his equipment continued that special relationship.

      On March 4, 2022, Judge Lisa M. Adubato issued a well-reasoned written

decision and accompanying order granting defendants' motion and dismissing

plaintiffs' claims with prejudice. The judge relied on the established law under

Wang v. Allstate Insurance Co., 125 N.J. 2, 15 (1991), in stating an insurance

carrier and its agents do not have a common law duty to advise its insureds

regarding the potential need for higher policy limits upon renewal of a policy

unless there is a special relationship. Moreover, Chung had advised Skvorecz

before the fire that he could increase his insurance limits if he wished to do so,

and he had not responded to the correspondence. Absent a special relationship,

5
  Plaintiffs also moved for a fifth extension of discovery. Following the grant
of summary judgment, the trial court denied the extension motion as moot.
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the judge found defendants did not owe plaintiffs a duty to recommend higher

policy limits to the existing insurance coverage.

      Judge Adubato then considered whether plaintiffs had demonstrated the

existence of a special relationship, guided by Wang and Triarsi v. BSC Group

Services, LLC, 422 N.J. Super. 104, 116-17 (App. Div. 2011). The judge found

that Rork's working relationship with Skvorecz did not comprise "actions or

events that fall outside the typical broker-client relationship." While Rork made

personal visits to Skvorecz to deliver paperwork and discuss the business, the

judge found Skvorecz conceded he was "best situated to make evaluations

regarding the value of his machinery." The judge found Rork did not invite

detrimental reliance and Skvorecz did not rely on Rork to his detriment, as

required to establish a special relationship under Triarsi.

      Furthermore, the judge noted that even if Rork's previous business

practices created a special relationship, it ended when he stopped servicing the

account in 2007 prior to his retirement the following year. Bollinger did not

have an obligation to continue the same business practices that Rork did.

Moreover, for the six years between Rork's retirement and the fire, Bollinger

and Chung communicated with plaintiffs through written correspondence and

the mailed yearly renewal forms. Plaintiffs accepted that business practice.

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Judge Adubato concluded: "The duration of the relationship between [Rork

Agency] and then Bollinger, and the conduct of the parties does not weigh in

favor of finding a special relationship between the broker and client here.

Instead, the consistent practices of both [Rork Agency] and Bollinger were those

of typical broker-client relationships."

      The judge also addressed plaintiffs' contention that a special relationship

was created when Skvorecz requested Chung arrange an inspection of his

equipment. The judge found that Chung agreed to reach out to FMI and she did

so. When FMI determined it could not value the equipment, Chung asked

Skvorecz if he wanted to increase his limits. Skvorecz did not respond. Judge

Adubato concluded there was no evidence that plaintiffs detrimentally relied on

Chung to assess the equipment value or increase coverage limits, reiterating that

Skvorecz had valued his equipment in the past and was in the best position to

do so.   Moreover, Skvorecz had the opportunity to increase the insurance

coverage limits each year when Bollinger sent the renewal notice. The judge

concluded the single contact with Chung did not establish a special relationship.

Therefore, plaintiffs could not support their claims of a breach of fiduciary duty.

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      Plaintiffs' subsequent motion for reconsideration was denied. The judge

found plaintiffs had presented nothing more than a disagreement with the order

granting summary judgment.

                                      III.

      We "review[] the grant of a motion for summary judgment de novo,

applying the same standard used by the trial court." Samolyk v. Berthe, 251 N.J.

73, 78 (2022). A motion for summary judgment should be granted if "there is

no genuine issue as to any material fact challenged and . . . the moving party is

entitled to a judgment . . . as a matter of law." R. 4:46-2(c). Viewing the

evidence "in the light most favorable to the non-moving party," a court must

"'determine whether there is a genuine issue for trial.'" Brill v. Guardian Life

Ins. Co. of Am., 142 N.J. 520, 540 (1995) (quoting Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 249 (1986)). Our review of whether a defendant owes a

plaintiff a duty is de novo because it is an issue of law. Rowe v. Bell & Gossett

Co., 239 N.J. 531, 552 (2019).

      We first address plaintiffs' argument that defendants breached the

fiduciary duty of care owed to plaintiffs because they did not provide the same

service as Rork did when he was handling the account.         Plaintiffs contend

defendants had an obligation to "inquire" about the adequacy of their insurance

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                                      10
coverage, instead of only mailing renewal questionnaires. They further assert

that when Chung arranged for an inspection of plaintiffs' machinery, she was

obligated to value the machinery, which she failed to do. In addition, plaintiffs

contend Chung should have informed plaintiffs their business interruption

coverage was insufficient.

      An insurance broker has a fiduciary duty to "their clients, to whom they

owe a duty to exercise reasonable skill and good faith." Harbor Commuter Serv.,

Inc. v. Frenkel & Co., 401 N.J. Super. 354, 367 (App. Div. 2008). However,

unless an insurance broker and their client have a special relationship, "there is

no common law duty . . . to advise an insured concerning the possible need for

higher policy limits upon renewal of the policy." Wang, 125 N.J. at 11-12, 15.

      An insurance broker can assume a duty of care towards their client if they

have a special relationship such that the client relies on them. Triarsi, 422 N.J.

Super. at 116-17. To determine whether there is a special relationship, the court

will examine the length of the insurance broker and client's relationship, their

prior conduct, and whether there was "an inquiry or request by the insured or a

specific representation by the . . . broker." Id. at 116; Wang, 125 N.J. at 18.

However, "the client must establish '"something more"' than a broker-client

relationship in order to impose a heightened standard of care on [the] broker."

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Triarsi, 422 N.J. Super. at 117 (quoting Glezerman v. Columbian Mut. Life Ins.

Co., 944 F.2d 146, 151 (3d Cir. 1991)). The plaintiff must prove "the insurance

[broker] 'assume[d] duties in addition to those normally associated with the

[broker]-insured relationship' by conduct that invited plaintiff's detrimental

reliance." Ibid. (second alteration in original) (quoting Glezerman, 944 F.2d at

150).

        Plaintiffs have not demonstrated they had a special relationship with Rork

because their communications and actions did "not fall outside the typical

broker-client relationship" and did not invite Skvorecz to detrimentally rely on

Rork. Neither individual stated that Rork recommended a different level of

insurance coverage or that Rork ever valued plaintiffs' machinery and equipment

for insurance purposes. To the contrary, Skvorecz acknowledged he did not need

help valuing his equipment to determine if he was underinsured as he had all the

necessary information to do it himself. Rork confirmed he did not value the

machinery.

        Rork testified that his level of customer service with Skvorecz was his

"standard practice." Neither he nor Skvorecz stated that Rork recommended or

chose specific coverage limits during their meetings. The evidence reflects Rork

did not "assume[] duties in addition to those normally associated with the

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                                        12
[broker]-insured relationship" or induce Skvorecz to detrimentally rely on him.

Ibid. (quoting Glezerman, 944 F.2d at 150).

      Moreover, as Judge Adubato noted, even if Rork and Skvorecz did have a

special relationship, it ended when Rork retired. Although defendants handled

their business with their clients differently than Rork had, they had no obligation

to continue Rork's practices.     Plaintiffs have not demonstrated defendants

assumed additional duties outside of the normal broker-insured relationship or

induced plaintiffs' detrimental reliance by sending out annual renewal

questionnaires. As the judge stated, the provision of annual renewal forms is a

"typical" practice of "broker-client relationships."

      Lacking a special relationship, defendants did not have a duty to advise

plaintiffs of the need to change their insurance coverage. Notwithstanding that

conclusion, defendants informed plaintiffs they could increase their insurance

coverage if they wanted to. This was consistent with Rork Agency's practices,

who did not value clients' equipment, but would assist clients in valuing it.

Contrary to plaintiffs' contentions, Chung did not agree to value plaintiffs'

machinery; she only agreed to arrange an inspection of plaintiffs' machinery—

which she did.

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                                       13
      Bollinger's annual renewal questionnaires asked Skvorecz if he had

obtained any new equipment and if he wanted to make any changes to his

business personal property coverage.        Skvorecz did not return any of the

completed questionnaires and did not contact Chung to ask any questions he may

have had about his insurance, despite acknowledging her availability for that

purpose.

      Plaintiffs also assert the trial court erred in failing to properly consider

their expert report, which discussed the standard of care owed by defendants to

plaintiffs and the breach of it.

      We find no merit in this argument. First, the report was untimely as

discovery had ended. In addition, it was improperly served as an attachment to

opposition to the summary judgment motion, rather than as an amendment to

interrogatories as required under Rule 4:17-7.

      Nevertheless, the report was discussed during the oral argument on the

summary judgment motion. In addition, the judge referred to it in her oral

decision denying reconsideration.     Moreover, whether there was a special

relationship was a legal determination solely within the court's province. See

Wang, 125 N.J. at 15.

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      We similarly discern plaintiffs' additional arguments that the trial judge

erred in denying their motion for reconsideration to be without merit. They have

not presented any evidence that the court's decision was "palpably incorrect or

irrational" or that the judge "did not . . . appreciate the significance of probative,

competent evidence." Cap. Fin. Co. of Del. Valley, Inc. v. Asterbadi, 398 N.J.

Super. 299, 310 (App. Div. 2008) (quoting D'Atria v. D'Atria, 242 N.J. Super.

392, 401 (Ch. Div. 1990)). Plaintiffs' dissatisfaction with the court's decision is

not a basis for reconsideration. See Palombi v. Palombi, 414 N.J. Super. 274,

288 (App. Div. 2010).

      Affirmed.

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