Court Opinion

ID: 4430239
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:38:05.20163+00
Date Added: 2024-06-11T14:58:19.385018
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NOT FOR PUBLICATION WITHOUT THE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-5089-16T2

THE STATE-OPERATED SCHOOL
DISTRICT OF THE CITY OF
PATERSON,

          Plaintiff-Appellant,

and

DONNIE W. EVANS, ED.D.,
in his official capacity as
Superintendent of the Paterson
Public Schools, and JENNIE RIVERA,

          Plaintiffs,

v.

AMERICAN ALTERNATIVE INSURANCE
CORPORATION, and ESSEX INSURANCE
COMPANY,

          Defendants,

and

CLAY THOMAS & ASSOCIATES, LLC,

          Defendant-Respondent.
            Argued September 26, 2018 – Decided October 22, 2018

            Before Judges Koblitz, Ostrer, and Currier.

            On appeal from Superior Court of New Jersey, Law
            Division, Passaic County, Docket No. L-3133-15.

            Charles A. Yuen argued the cause for appellant
            (Scarinci & Hollenbeck, LLC, attorneys; Charles A.
            Yuen, of counsel and on the briefs).

            Marshall D. Bilder argued the cause for respondent
            (Eckert Seamans Cherin & Mellott, LLC, attorneys;
            Jason S. Feinstein and Marshall D. Bilder, of counsel
            and on the brief).

PER CURIAM

      In this insurance coverage dispute, we address whether the certificate of

insurance issued by defendant Clay Thomas & Associates, LLC (defendant or

Clay) misrepresented the insurance coverage afforded plaintiff under the

respective policies listed on the certificate. After a review of the contentions in

light of the record and applicable principles of law, we affirm the trial court's

grant of summary judgment to defendant. 1

1
   The other defendants named in the complaint either were dismissed by
summary judgment or resolved their differences with plaintiff.

                                                                           A-5089-16T2
                                        2
        In 2012, plaintiff, the State-Operated School District of the City of

Paterson,2 conducted a public bidding process for the transportation contract for

its public school students. The specifications for the contract required that the

chosen contractor maintain automobile liability coverage, comprehensive

commercial general liability (CGL) coverage, and workers' compensation

coverage in specified minimum amounts. In addition, upon signing the contract,

the successful bidder was required to provide a "certificate of insurance for the

duration of the contract." The bid specifications further stated: "The certificate

of insurance shall name the Paterson Public School District as 'an additional

insured' party of the policy."

        As the successful bidder, K&M Transportation, Inc. (K&M) was awarded

the transportation contract. Paragraph seven of the contract required K&M to

obtain automobile liability insurance in a specified amount.        Although the

contract obligated the automobile insurer to name plaintiff as an "additional

insured," it was silent as to whether the coverage afforded to plaintiff was to be

primary or excess.

        In compliance with the bid specifications, K&M procured a Certificate of

Liability Insurance (Certificate) from defendant, a licensed insurance producer,

2
    We refer to plaintiffs collectively as "plaintiff."
                                                                          A-5089-16T2
                                           3
for the applicable period of the contract. The Certificate listed a CGL policy

issued by Essex Insurance Company, an automobile liability policy issued by

American    Alternative     Insurance   Company    (AAIC),    and   a   workers'

compensation policy. The Certificate stated: "Paterson Public School District is

an additional insured party to the policy."

      Following a tragic incident in which a Paterson student suffered fatal

injuries while being transported by K&M, and the ensuing litigation, plaintiff

sought coverage under the policy issued by AAIC. In denying coverage,3 AAIC

informed that its coverage was excess to any other insurance coverage

maintained by plaintiff.4

      In the complaint filed in this matter, plaintiff alleged defendant

misrepresented the "level" of insurance coverage afforded under the AAIC

policy.   Plaintiff argued that defendant failed to inform plaintiff that the

3
  Although not pertinent to the issues in this appeal, AAIC initially also denied
coverage on other grounds.
4
  The policy stated: "Any coverage provided hereunder shall be excess over any
other valid and collectible insurance available to the additional insured whether
primary, excess, contingent or on any other basis unless a written contract or
agreement specifically requires that this insurance be primary in which case any
other insurance available to the additional insured shall be considered excess
and non-contributing."

                                                                         A-5089-16T2
                                        4
coverage provided by AAIC was excess to any other coverage plaintiff might

have, despite its additional insured status on the AAIC policy.

      During the discovery period, there were several extensions of discovery

and a robust motion practice. When plaintiff failed to produce its expert within

the court-ordered time frame, a trial judge granted defendant's motion to bar the

expert. On June 6, 2017, a different trial judge granted summary judgment to

defendant. Plaintiff appeals from both orders.

      We review orders granting summary judgment de novo, applying the same

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). Summary judgment must be

granted "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 or order as a matter of law." R. 4:46-2(c); see also Brill v. Guardian

Life Ins. Co. of Am., 142 N.J. 520, 528-29 (1995).          To defeat summary

judgment, the non-moving party must bring forth "evidence that creates a

'genuine issue as to any material fact challenged.'"      Brill, 142 N.J. at 529

(quoting R. 4:46-2).

                                                                          A-5089-16T2
                                        5
      Plaintiff asserts the trial court erred in finding plaintiff could not support

its claim for negligent misrepresentation against defendant. To demonstrate a

claim for negligent misrepresentation, plaintiff must show "[a]n incorrect

statement, negligently made and justifiably relied upon, [which] may be the

basis for recovery of damages for economic loss or injury sustained as a

consequence of that reliance." H. Rosenblum, Inc. v. Adler, 93 N.J. 324, 334

(1983). Plaintiff must prove, by a preponderance of the evidence, that plaintiff

"received . . . the statements . . . relied on the statements, and that the

misstatements therein . . . were a proximate cause of the . . . damage." Kaufman

v. I-Stat Corp., 165 N.J. 94, 109 (2000) (quoting Adler, 93 N.J. at 350).

      Plaintiff contends defendant "indisputably [mis]represented" that the

AAIC policy was a primary policy under which plaintiff was an additional

insured. We disagree.

      As noted by the second trial judge, the bid specifications did not require

the bidder to provide automobile liability insurance to plaintiff on a primary

coverage basis. Similarly, the contract between K&M and plaintiff did not

require coverage to plaintiff as a primary insured. Both documents were silent

as to whether AAIC's policy covered plaintiff on a primary basis with its other

insurance coverage or whether it was excess to any other insurance coverage.

                                                                            A-5089-16T2
                                         6
      The bid specifications and contract, however, did require the automobile

liability insurer of K&M to name plaintiff as an additional insured.          The

Certificate issued by defendant complied with those directives, and plaintiff was

named as an additional insured on the AAIC policy. Therefore, as the second

trial judge concluded, there was no incorrect information or misstatement on the

Certificate pertaining to the AAIC policy.

      Moreover, a claim of negligent misrepresentation requires plaintiff to

show a reliance on the incorrect statement caused it to sustain damages. "The

actual . . . consideration of any misstatement remains central to the case of any

plaintiff seeking to prove that he or she was deceived by the misstatement or

omission."    Kaufman, 165 N.J. at 109.        A review of the record confirms

plaintiff's inability to prove it considered or relied upon any language in the

Certificate prior to the personal injury litigation.

      In response to defendant's request for a corporate designee, plaintiff

presented three witnesses for deposition. The Supervisor of Purchasing, Neville

Williams, testified he was the person most knowledgeable about plaintiff's

"receipt and review of any insurance policies, declaration pages, and certificates

of insurance" pertaining to the K&M contract. He stated:

                                                                          A-5089-16T2
                                          7
            Q. Do you know if anyone reviewed . . . the certificate
            of liability insurance, from the time it was issued until
            the death of [the student]?

            A. No

            Q. As far as you know, as the corporate designee on
            the certificate of insurance, Paterson had no dealings
            whatsoever with [defendant] prior to the death of [the
            student]?

            A. To my knowledge, no.

Williams also conceded that K&M satisfied the insurance requirements imposed

by plaintiff in its bid documents and contract.

      Plaintiff also produced its Risk Manager, Laureen Moloney, as another

corporate designee. She testified:

            Q. When was the first time you ever saw . . . the
            certificate of liability insurance?

            A. Certainly after [the student's] death. I can't be more
            specific than that.

            Q. Do you know if anyone in Paterson saw . . . the
            certificate of liability insurance, before [the student's]
            death?

            A. I have no personal knowledge of somebody seeing
            the certificate. The certificate was in a file. So my
            assumption is that somebody saw it before they put it in
            the file.

            Q. But you can't testify to that?

                                                                         A-5089-16T2
                                        8
            A. I can't . . . testify [to that]. I can't testify as to who
            might have handled it.

                  ....

            Q. Wouldn't it be accurate for me to say [] that Paterson
            has no knowledge if anyone within Paterson did
            anything with the Clay certificate other than stick it in
            a file?

            A. I have no knowledge of anybody doing anything
            other than that.

      The third designee was plaintiff's Business Administrator, Daisy Ayala.

Her testimony on this issue was:

            Q. Do you know if you've ever seen the certificate of
            [i]nsurance that I have in my hand . . . before today?

            A. I can't recall.

            Q. To your knowledge, did K&M fail to comply with
            any of the insurance requirements [i]mposed upon it by
            Paterson?

                  ....

            A. I can't recall.

            Q. You've been designated as the corporate designee
            on any and all communications between Paterson on the
            one hand and K&M and [Clay] on the other hand
            regarding the contract's insurance requirements and
            certificate of insurance. As you sit here today, you
            don't know who [Clay] is, do you?

            A. I'm not exactly sure.

                                                                            A-5089-16T2
                                         9
            Q.    You had no communication with them?

            A.    No.

            Q. To your knowledge, Paterson                   had    no
            communications with them, right?

            A.    To the best of my ability, no.

Plaintiff's own witnesses confirm its inability to demonstrate anyone within the

District relied on or even considered the Certificate prior to these events.

      Viewing the record in a light most favorable to plaintiff, we are satisfied

the trial judge's grant of summary judgment to defendant was supported by the

evidence before it and the applicable law, as plaintiff failed to support its claim

of negligent misrepresentation.     We, therefore, need not reach the issue of

whether the court abused its discretion in barring plaintiff's expert. Plaintiff did

not contend that expert testimony was necessary for it to demonstrate a prima

facie case of negligent misrepresentation. To the contrary, plaintiff stated in his

brief, "There is . . . no formal or implied requirement for expert testimony," and

"[T]here is nothing . . . here that requires expert testimony."

      Affirmed.

                                                                            A-5089-16T2
                                        10