United States District Court, D. New Jersey
November 1, 2005.
PAUL BOERGER t/a CANBY PARK APARTMENTS, Plaintiff,
COMMERCE INSURANCE SERVICES and VINCENT PANARELLO, Defendants/Third-Party Plaintiffs, v. MT. HAWLEY INSURANCE COMPANY, a subsidiary of RLI INSURANCE GROUP, Third-Party Defendant.
The opinion of the court was delivered by: JOSEPH RODRIGUEZ, Senior District Judge
This matter comes before the Court on Defendants Commerce
Insurance Services's and Vincent Panarello's Motion to Dismiss
, pursuant to Fed.R.Civ.P. 12(b)(6). Defendants have moved
for dismissal of all Counts (One through Four) of Plaintiff Paul
Boerger t/a Canby Park Apartments's Complaint. For the reasons
discussed below, Defendants' motion is denied.
PROCEDURAL HISTORY AND FACTUAL BACKGROUND
In August 2002, Plaintiff met with Vincent Panarello
("Panarello"), an insurance agent of Commerce Insurance Services
("CIS") to secure commercial property and fire insurance for an
apartment complex that he owned, Canby Park Apartments ("Canby
Park"). (Cmpl. ¶ 7.) Plaintiff alleges that he informed Panarello
that his mortgage company required full replacement cost, a
minimum of $700,000.00 per building. (Cmpl. ¶ 8.)
Plaintiff asserts that Panarello researched different insurance
companies and verbally assured him that he would be able to
provide coverage that would at least meet the requirements of his
mortgage company. (Cmpl. ¶ 9.) According to the Complaint,
Plaintiff received a written proposal from Panarello setting
forth that he would have total coverage of $7,801,700.00, (Cmpl.
¶ 10), and a binder from Mt. Hawley Insurance Company ("Mt.
Hawley"), indicating blanket coverage in the amount of
$9,374,400.00, (Cmpl. ¶ 11). Plaintiff alleges that he did not
receive a copy of the insurance policy at this time. (Cmpl. ¶
On December 23, 2002 a fire occurred at one of the structures
in Canby Park. (Cmpl. § 12.) Plaintiff states that a Mt. Hawley
adjuster inspected the loss, viewed the binder, and informed him
that there was sufficient insurance coverage to cover the loss,
(Cmpl. ¶ 13), which was approximately $700,000.00, (Cmpl. ¶ 14).
Plaintiff alleges that he received letters on December 23, 2002 and December 24, 2002 from Panarello,
confirming coverage in the amount of at least $1,000,000.00 per
covered loss with no specific building limitation noted. (Cmpl.
¶¶ 19, 20.) Plaintiff asserts that, notwithstanding these
letters, Mt. Hawley reported that the actual coverage for the
building was $450,650.00, rather than the blanket $1,000,000.00.
(Cmpl. ¶¶ 24, 25.) Because Mt. Hawley refused to pay more than
the stated value for the property involved, Plaintiff brought
suit. (Cmpl. ¶ 34.)
Defendants move to dismiss pursuant to New Jersey's Affidavit
of Merit Statute ("statute"),*fn1 which states, in pertinent
In any action for damages for personal injuries,
wrongful death or property damage resulting from an
alleged act of malpractice or negligence by a
licensed person in his profession or occupation, the
plaintiff shall, within 60 days following the date of
filing of the answer to the complaint by the
defendant, provide each defendant with an affidavit
of an appropriate licensed person that there exists a
reasonable probability that the care, skill or
knowledge exercised or exhibited in the treatment,
practice or work that is the subject of the
complaint, fell outside acceptable professional or
occupational standards or treatment practices.
N.J. Stat. Ann. § 2A:53A-27 (2005). The statute defines a
"licensed person" as "any person who is licensed as . . . an
Id. at 2A:53A-26(o) (2005). The New Jersey Supreme Court has acknowledged that "the primary
purpose of the statute is `to require plaintiffs in malpractice
cases to make a threshold showing that their claim is
meritorious, in order that meritless lawsuits readily could be
identified at an early stage of litigation.'" Fink v. Thompson,
772 A.2d 386
, 391 (N.J. 2001) (quoting In re Petition of Hall,
688 A.2d 81
, 87 (1997)) (further citations omitted). "Failure to
comply with the statute, either strictly or substantially, will
result in dismissal with prejudice, unless an exception applies."
Fink, 772 A.2d at 228 (citing Cornblatt v. Barow,
708 A.2d 401
, 415 (1998)) (internal citations omitted). When determining
whether the statute applies to a claim against a licensed person,
the Court must determine:
(1) whether the action is for "damages for personal
injuries, wrongful death or property damage" (nature
of injury); (2) whether the action is for
"malpractice or negligence" (cause of action); and
(3) whether the "care, skill or knowledge exercised
or exhibited in the treatment, practice or work that
is the subject of the complaint fell outside
acceptable professional or occupational standards or
treatment practices" (standard of care).
Couri v. Gardner, 801 A.2d 1134
, 1137-38 (N.J. 2002) (citing
N.J. Stat. Ann. § 2A:53A-27).
A. Negligence Claims
Defendants argue that the statute applies to Plaintiff's
negligence claims because they involve negligent procurement of
insurance. Defendants contend that the common knowledge exception
does not apply because Plaintiff's "professional liability claims
against [CIS] and Panarello implicate the myriad of statutory and
decisional law which defines the standard of care an insurance
producer owes its clients." (Def. Br., p. 6.)
Plaintiff argues that the statute does not apply because it is
clear that the insurance binder he received stating that there was blanket coverage for his
buildings is completely different from the insurance policy that
he received after the arson damage occurred. (Pl. Opp., p. 4.)
The New Jersey Supreme Court has held that the statute does not
apply to "common knowledge cases when an expert will not be
called to testify `that the care, skill or knowledge . . . [of
the defendant] fell outside acceptable professional or
occupational standards or treatment practices.'" Hubbard ex rel.
Hubbard v. Reed, 774 A.2d 495, 497 (N.J. 2001) (quoting N.J.
Stat. Ann. § 2A:53A-27.) In Hubbard, the plaintiff went to the
dentist to have her mandibular left lateral incisor removed;
instead, her mandibular left second bicuspid was removed. Id.
The trial court dismissed the plaintiff's complaint because she
failed to file an affidavit of merit in accordance with the
statute. Id. In reversing, the court reasoned that "in common
knowledge cases an expert is not needed to demonstrate that a
defendant breached a duty of care. The doctrine applies where
`jurors' common knowledge as lay persons is sufficient to enable
them, using ordinary understanding and experience, to determine a
defendant's negligence without the benefit of the specialized
knowledge of experts.'" Id. at 499 (quoting Estate of Chin v.
Saint Barnabas Med. Ctr., 734 A.2d 778, 785 (N.J. 1999)).
Therefore, a plaintiff who asserts a common knowledge malpractice
claim is not required to proffer expert testimony to establish
the standard of care of a professional.
Defendants argue that the New Jersey Supreme Court's holding in
Aden v. Fortish, 776 A.2d 792, 801 (N.J. 2000), which states
that a claim for negligent procurement of insurance coverage is
really one of professional malpractice, requires this Court to
apply the statute to this case; however, this argument is misplaced. In Aden,*fn3
the plaintiff sought to purchase from the defendant insurance
agent "a policy that would cover any losses [he] might have in
[his] condo." Id. at 795. The defendant insurance agent asked
the plaintiff to contact his condominium association to verify
type of coverage provided by the association. Id. at 796. The
defendant offered the plaintiff a policy, which the plaintiff
accepted. Id. Subsequently, the plaintiff suffered a loss and
discovered that his coverage was inadequate. Id. At trial, the
plaintiff proffered the testimony of an expert who testified that
the "generally accepted procedure by which an insurance broker
procures a condominium insurance policy for a client is to review
the insured's condominium association policy before hand." Id.
at 797. The expert opined that because the defendant did not
review the plaintiff's condominium's insurance policy, he did not
act in conformity with industry standards. Id.
This case is different from Aden because, unlike the
defendants there, Defendants here were not asked to use their
care, skill or knowledge to assist Plaintiff is choosing a
certain insurance policy. Rather, the Defendants were asked to
obtain a certain dollar amount of coverage and confirmed that
dollar amount in various writings to Plaintiff. It was not until
Plaintiff suffered a loss that he learned that the dollar amount
requested and the dollar amount procured were two different
Moreover, Plaintiff stated in his opposition that he will not
rely on the testimony of an expert. Although the common knowledge
exception is to be construed narrowly in order to avoid
noncompliance with the statute, the Court finds that Plaintiff's
claims do not involve any special care, skill or knowledge that is reserved to a licensed
professional. Therefore, Plaintiff's claims are within the common
knowledge of the average juror. Accordingly, Defendants' motion
as to Counts Three and Four will be denied.
B. Breach of Contract Claims
Defendants also argue that Plaintiff's classification of Counts
One and Two as breach of contract does not render them immune
from the requirements of the statute. (Def. Br., p. 5.)
Plaintiff, although never directly confronting this issue, argues
that neither the breach of contract claims nor the negligence
claims are subject to the requirements of the statute. (Pl. Opp.,
Although the statute may apply to claims sounding in both
contract and tort, traditional contract actions are not subject
to the statute. In Couri, the plaintiff brought a breach of
contract action against a psychiatrist, the defendant, when he
released a report to the plaintiff's wife without his consent.
801 A.2d at 1136. The New Jersey Supreme Court held that "[i]t is
not the label placed on the action that is pivotal but the nature
of the legal inquiry." Id. at 1141. The court reasoned that the
purpose of the statute to "weed out frivolous lawsuits early in
the litigation while, at the same time, ensuring that plaintiffs
with meritorious claims will have their day in court" would be
furthered by focusing on the proofs required for plaintiff's
claim. Id. at 1140-41. Accordingly, the court concluded that:
when asserting a claim against a professional covered
by the statute, whether in contract or in tort, a
claimant should determine if the underlying factual
allegations of the claim require proof of a deviation
from the professional standard of care for that
specific profession. If such proof is required, an
affidavit of merit shall be mandatory for that claim,
unless either the statutory, [section] 2A:53A-28, or
common knowledge exception applies.
Id. at 1141. Thus, the determination of whether a claim falls under the
statute requires an examination of the type of evidence required
to prove the underlying factual allegations. Therefore, not every
complaint against a licensed professional acting in his
professional capacity is subject to the statute. It is only those
claims that require proof of a deviation from a professional
standard of care that will require an affidavit of merit unless
an exception applies.
In this case, Defendants contend that the statute applies to
Plaintiff's breach of contract claims because the alleged harm
arises out of Defendants' conduct as insurance producers and,
therefore, requires proof of a deviation from the standard of
care.*fn4 However, Plaintiff argues that the breach of
contract claims do not require expert testimony because the issue
is not a breach of the standard of care. Specifically at issue is
which coverage applies: the blanket coverage that Plaintiff
believed he had, based on the insurance binder and letters that
he received from Defendants; or the insurance coverage actually
procured by Defendants. (Pl. Opp., p. 5.) Moreover, the Plaintiff
asserts in his reply that he does not intend to rely on expert
testimony to prove his claims. Id.
The Court finds that Plaintiff's breach of contract claims do
not require evidence of a deviation from the professional
standard of care for the insurance producer profession. Rather,
Plaintiff intends to prove that the Defendants' procured a
different amount of coverage from that indicated in Defendants'
confirmatory letters. Therefore, Defendants' motion as to Counts
One and Two will be denied.*fn5
Based on the foregoing, Defendants' motion to dismiss 
Plaintiff's Complaint pursuant to Fed.R.Civ.P. 12(b)(6) for
failure to file an affidavit of merit will be denied.
An appropriate Order will issue this date.
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