Court Opinion

ID: 4428607
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:09:45.278253+00
Date Added: 2024-06-11T14:50:49.221358
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NOT FOR PUBLICATION WITHOUT THE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-5462-16T1

FRANCINE HAMILTON
and RAYMOND HAMILTON,

           Plaintiffs-Appellants,

v.

DEBORAH GALATI, ALBERT
GALATI, and PATRICIA GALATI,

           Defendants,

and

DEBORAH GALATI,

           Third-Party Plaintiff,

v.

FIRST BROKERS INSURANCE
and FARMERS INSURANCE
COMPANY OF FLEMINGTON,

           Third-Party Defendants-Respondents.

                    Argued January 30, 2019 – Decided May 9, 2019
              Before Judges Alvarez and Nugent.

              On appeal from Superior Court of New Jersey, Law
              Division, Camden County, Docket No. L-4289-14.

              Joseph A. Lombardo argued the cause for appellants
              Francine Hamilton and Raymond Hamilton (Lombardo
              Law Group, attorneys; Joseph A. Lombardo, on the
              brief).

              Amelia M. Lolli argued the cause for respondent First
              Brokers Insurance (Connor Weber & Oberlies,
              attorneys; Amelia M. Lolli, on the brief).

              Murray A. Klayman argued the cause for respondent
              Farmers Insurance Company.

PER CURIAM

        Plaintiffs Francine Hamilton and Raymond Hamilton 1 appeal three orders

issued June 10, 2016, denying defendant Deborah Galati's motion for insurance

coverage, and granting defendant First Brokers Insurance and defendant

Farmers Insurance Company of Flemington summary judgment against

defendants Albert and Patricia Galati 2 on their third-party complaint.

Thereafter, the judge on August 11, 2016, denied Deborah's motion for

reconsideration. We affirm.

1
  Deborah Galati assigned her rights in the action to the Hamiltons. No copy of
the assignment is included in the appendix.
2
    We refer to the parties by their first names to avoid confusion.
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      Albert and Patricia are Deborah's parents. They purchased a home for her

and her children. After Deborah moved into the property, she acquired an

Alaskan Malamute dog, who broke free of its outside tether and attacked

Francine Hamilton, causing personal injuries.

      Before the Malamute attacked Francine Hamilton, around the time

Deborah moved into the property, Patricia contacted First Brokers for

homeowner's insurance for Deborah's house. Bonnie Bowen, a First Brokers

agent, explained that Patricia could not obtain homeowner's coverage because

she did not reside there. Instead, Bowen was willing to issue a dwelling/fire

policy, but this would only cover Albert and Patricia. Bowen suggested that

Deborah separately obtain renter's insurance. Patricia told Bowen that Deborah

did not pay rent, but Bowen repeated that she should have renter's insurance.

Patricia testified in deposition that she believed renter's insurance only covered

the value of contents, did not understand it would have provided Deborah

property liability coverage because it was never explained to her, and thus she

did not encourage Deborah to obtain it.         Deborah did not obtain renter's

insurance.

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      The dwelling/fire insurance policy issued to Albert and Patricia states

"THIS IS NOT A HOMEOWNERS POLICY." Albert and Patricia are the only

named insureds. The policy reads:

            COVERAGE         E     –    GENERAL        LIABILITY
            COVERAGE
            We will pay for the benefit of insureds, up to our limit
            of liability shown in the Declarations, those sums that
            insureds become legally obligated to pay as damages
            because of bodily injury or property damage that occurs
            during the policy term and is caused by an occurrence
            covered by this policy.

      The policy defines "insureds" as follows:

            Insured
            Part A
            If the named insured is an individual, insured means:
            1. You and the following, if residents of your
            household:
            a. Your spouse.
            b. Your or your spouse's relatives.
            c. Anyone under the age of 21 in your care or the care
            of a resident relative.

Furthermore, the policy also defines "you, your and yourself" as "[r]efer[ring]

to the insured named in the Declarations."

      The judge found in favor of Farmers and First Brokers because the policy

unambiguously defined "insured" as including only Albert and Patricia. He

considered construction of the policy language to be "really a plain language

type of situation, and it's not something that needs any further description. You

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can't define every word in a policy, and that's one of the words I don't think you

have to define." Because terms in insurance policies are to be given their plain

meaning, in the absence of ambiguity, Deborah was not an additional insured.

      The judge also concluded that the insureds could not reasonably expect to

include their daughter in the definition of "insureds" when she resided in another

household. He also did not consider Deborah to be a third party beneficiary, or

that the broker or insurance company had a fiduciary or other duty to her based

on the phone call from her mother.

      On August 11, 2016, the judge denied the motion for reconsideration,

citing to the standards found in Rule 4:49-2 and D'Atria v. D'Atria, 242 N.J.

Super. 392 (Ch. Div. 1990). He considered the application to be merely an

expression of dissatisfaction with the outcome of the motions.

      On appeal, the Hamiltons acting on the assignment of Deborah's rights,

raise the following alleged errors on the part of the Law Division judge:

            I.    DEBORAH GALATI HAD A REASONABLE
                  EXPECTATION     OF      INSURANCE
                  COVERAGE FROM FARMERS AND/OR
                  FIRST BROKERS.
            II.   BECAUSE    THE  FARMERS'    POLICY
                  PROVIDED FOR THE MEDFORD AVENUE
                  PROPERTY DOES NOT SPECIFICALLY
                  DEFINE THE TERM "RESIDENT," AND IS
                  THEREFORE AMBIGUOUS, IT SHOULD BE

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                                        5
                   CONSTRUED IN FAVOR OF COVERAGE
                   FOR DEBORAH GALATI.

            III.   DEBORAH IS ENTITLED TO HAVE THE
                   INSURANCE CONTRACT ISSUED BY
                   FARMERS, THROUGH FIRST BROKERS,
                   REFORMED, DUE TO MUTUAL MISTAKE
                   AS TO THE COVERAGE PROVIDED.

            IV.    THE TRIAL COURT FAILED TO CONSIDER
                   THAT DEBORAH IS AN INTENDED THIRD
                   PARTY BENEFICIARY OF THE FARMERS
                   POLICY ISSUED TO HER PARENTS,
                   PATRICIA AND ALBERT, AND IS THUS
                   ENTITLED TO COVERAGE.

            V.     THE TRIAL COURT FAILED TO CONSIDER
                   THE POTENTIAL FOR MALPRACTICE
                   AND/OR NEGLIGENCE AS TO FIRST
                   BROKERS AND FARMERS FOR THEIR
                   FAILURE TO MITIGATE DEBORAH'S
                   EXPOSURE AFTER THE CLAIM WAS FILED.

                                        I.

      "[T]he words of an insurance policy are to be given their plain, ordinary

meaning." Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001). "In the

absence of any ambiguity, courts 'should not write for the insured a better policy

of insurance than the one purchased.'" Gibson v. Callaghan, 158 N.J. 662, 670

(1999) (quoting Longobardi v. Chubb Ins. Co. of N.J., 121 N.J. 530, 537 (1990)

("in the absence of an ambiguity, a court should not engage in a strained

construction to support the imposition of liability.")). An ambiguity exists

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where the average policyholder would not be able to ascertain the boundaries of

coverage.   Longobardi, 121 N.J. at 537.       "When there is ambiguity in an

insurance contract, courts interpret the contract to comport with the reasonable

expectations of the insured, even if a close reading of the written text re veals a

contrary meaning." Zacarias, 168 N.J. at 595 (citing Gibson, 158 N.J. at 671).

      While plaintiffs allege that the lack of a definition for "resident" in the

policy creates an ambiguity, a plain reading of the contract evinces no such

ambiguity. The insurance policy lists Albert and Patricia as the "insureds." In

order to be covered by the policy, the additional insureds must reside in Albert

and Patricia's household:

            If the named insured is an individual, insured means:
            1. You and the following, if residents of your
            household:
            a. Your spouse.
            b. Your or your spouse's relatives.
            c. Anyone under the age of 21 in your care or the care
            of a resident relative.

There is no ambiguity in the term "household."

      "[I]n the absence of an ambiguity, a court should not engage in a strained

construction to support the imposition of liability." Longobardi, 121 N.J. at 537.

Nothing in the policy, or the record for that matter, establishes a factual basis

for Deborah to have had a reasonable expectation of insurance coverage. She

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simply does not fall within the term "resident," nor was she a member of Albert

and Patricia's "household."      There is no ambiguity here; the doctrine of

"reasonable expectations" simply does not apply.

                                         II.

      "Equity will grant reformation of an insurance policy where there is

mutual mistake or where a mistake on the part of one party is accompanied by

fraud or other unconscionable conduct of the other party." Stamen v. Metro.

Life Ins. Co., 41 N.J. Super. 135, 140 (App. Div. 1956). However, the summary

judgment record reveals that Patricia made no mistake as to the scope of

coverage; she only made assumptions and no further inquiries. Albert and

Patricia knowingly purchased a dwelling/fire policy, and knew it would only

cover them and not Deborah. Deborah did not obtain a renter's policy as the

broker suggested. There was no mutual mistake.

                                        III.

      The Hamiltons allege that since Albert and Patricia now have a new

insurance policy on Deborah's home, listing Deborah as an "additional insured"

under the policy, it was in fact possible for First Brokers and Farmers Insurance

to have added Deborah as an "additional insured." They contend that the broker

and insurer's failure to do so initially is a breach of fiduciary duty.

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      "The fiduciary relationship [between an insurance producer and a client]

gives rise to a duty owed by the broker to the client 'to exercise good faith and

reasonable skill in advising insureds.'" Aden v. Fortsh, 169 N.J. 64, 79 (2001)

(quoting Weinisch v. Sawyer, 123 N.J. 333, 340 (1991)). "[I]f a broker 'neglects

to procure the insurance or if the policy is void or materially deficient or does

not provide the coverage he undertook to supply, because of his failure to

exercise the requisite skill or diligence, he becomes liable to his principal for

the loss sustained thereby.'" Ibid. (quoting Rider v. Lynch, 42 N.J. 465, 476

(1964)).

      Here, the agent for First Brokers was clear about the type of insurance she

was providing to Albert and Patricia. She was clear that the policy only covered

Albert and Patricia and that Deborah would have to obtain her own policy.

While the agent could have recommended another policy under which Deborah

could be added as an "additional insured party," the agent owed no fiduciary

obligation to Deborah. Her failure to do so does not rise to a breach of fiduciary

duty. That the agent and the carrier owed a duty to Albert and Patricia did not

translate into a duty to Deborah.

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                                       IV.

      Thus we conclude that the motions for summary judgment were properly

granted in this case. We review such decisions applying the same standard used

by the trial court. Summary judgment is proper where there is no genuine issue

of material fact, considering the evidence in the light most favorable to the non -

moving party, and the moving party is entitled to prevail as a matter of law.

Rowe v. Mazel Thirty, LLC, 209 N.J. 35, 41 (2012) (citing Brill v. Guardian

Life Ins. Co. of Am., 142 N.J. 520, 529 (1995)); R. 4:46-2(c). In this case, the

record presents no material issue of fact. The dispute centers on questions of

law that were correctly decided by the judge.

      Nor did the judge err in denying reconsideration. R. 4:49-2 governs those

applications—which should be granted only when the prior decision overlooked

law or evidence or otherwise issued in error. See Cummings v. Bahr, 295 N.J.

Super. 374, 384 (App. Div. 1996). We review such decisions for abuse of

discretion—but see no abuse of discretion in this case. The judge based his

decision on relevant law, and took into account all the probative, competent

evidence. See D'Atria, 242 N.J. Super. at 401.

      Affirmed.

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