On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-5769-00.
The opinion of the court was delivered by: Skillman, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman, Axelrad and Sabatino.
The primary issue presented by this appeal is whether an insurance broker may be subject to liability under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. We conclude that an insurance broker is a semi-professional, who is subject to testing, licensing and regulation under other statutory provisions, and therefore is excluded from liability under the CFA for the performance of brokerage services.
In the fall of 1999, plaintiff entered into a contract to purchase a residential property in Audubon, New Jersey. Plaintiff planned to convert the property from residential to commercial uses.
Before the initial closing date, plaintiff's representative contacted defendant Nelson Pullaro, an insurance broker employed by defendant Blue Chip Insurance Services, also an insurance broker, to obtain insurance coverage for the property. Plaintiff paid a $361 premium, and Blue Chip issued a declaration sheet for a homeowner's policy. However, this policy was voided due to a delay in the closing date.
Before the new closing date, Pullaro found out that plaintiff was acquiring the property for commercial uses and allegedly advised plaintiff's representative that plaintiff would need to obtain a business operations policy (BOP) rather than a homeowner's policy. Plaintiff never paid the premium for a BOP, and neither a BOP nor a homeowner's policy was issued.
As a result, the property was uninsured when it was damaged by a storm and by the alleged negligence of contractors performing work required to convert it from residential to commercial uses. Blue Chip never returned the $361 premium plaintiff paid for a homeowner's policy, and it allegedly failed to inform plaintiff that he did not have the coverage such a policy would have provided.
Although the commercial uses plaintiff planned to conduct on the property were permitted uses, plaintiff was required to apply to the planning and zoning board (Board)*fn1 for site plan approval due to the proposed change in use. Before applying for this approval, plaintiff contracted with defendant Nico Electric to do electrical work. Defendant Robert Scouler, the Audubon construction official, issued a permit authorizing this work.
On February 2, 2000, Scouler issued a stop work order on the grounds that the electrical work being performed by Nico exceeded the scope of the construction permit and that plaintiff was required to obtain the Board's approval before converting the property from residential to commercial uses. Scouler issued this order after visiting the property and observing a Nico electrician installing the emergency and exit lights required for the proposed commercial uses. Scouler apparently had not been aware before issuing the construction permit that plaintiff planned to convert the property to commercial uses and had to obtain site plan approval for this purpose.
On March 16, 2000, plaintiff filed an application for site plan approval. At a March 27, 2000 workshop meeting, the Board notified plaintiff that his site plan was inadequate. Plaintiff subsequently notified the Board that he had retained an engineering firm to prepare a complete site plan.
Around this time, a tree fell on plaintiff's property, damaging the roof and rear porch of the house. Plaintiff contracted with a roofer to repair the damage, and on May 12, 2000, Scouler issued a construction permit authorizing emergency repairs to the roof. However, Scouler visited the premises several times during the next few weeks and did not observe any repair work being done on the roof. Based on these observations, Scouler concluded that there was no need for emergency roof repairs and that plaintiff's application for a construction permit contained "false and misleading information as to the state of emergency." Accordingly, on May 31, 2000, Scouler issued a stop work order for the planned roof repairs.
Shortly thereafter, plaintiff filed an appeal to the Camden County Construction Board of Appeals. This appeal was resolved by a settlement, memorialized by a letter dated August 7, 2000, under which plaintiff was allowed to complete the repairs to the roof, demolish and remove the damaged rear porch, and complete the electrical work on the house with the exception of the work needed for the proposed emergency and exit lights.
On September 25, 2000, plaintiff submitted a site plan prepared by an engineering firm, and on November 13, 2000, the Board approved plaintiff's application for site plan approval. However, because plaintiff did not pay the $1575 in escrow fees required to undertake the project until May 2001, a resolution memorializing this approval was not issued until August 2001. During the intervening period, no construction permits were issued.
On November 22, 2002, plaintiff sold the property without completing the construction work required to convert it from residential to commercial uses.
Plaintiff brought this action against Blue Chip, Pullaro and Preserver Insurance Company, a liability and property insurer with which the Blue Chip and Pullaro placed coverage for customers. Plaintiff asserted claims for breach of contract, negligence, and violations of the CFA against these defendants. By an amended complaint, plaintiff added the Borough of Audubon and Scouler as defendants, asserting claims under the Federal Civil Rights Act of 1871 (42 U.S.C.A. § 1983). By a second amended complaint, plaintiff named as additional defendants Shirley Himmelman, the chairperson of the combined planning and zoning board, and Claire Remenicky, Scouler's secretary, as well as various contractors who performed work on plaintiff's property.
During the pendency of the action, Scouler filed a bankruptcy petition, which resulted in a stay of trial proceedings. Plaintiff's claim against Scouler was resolved in the bankruptcy proceedings and Scouler was dismissed from this action.
After the completion of discovery, the trial court granted motions by Audubon, Himmelman and Remenicky for summary judgment, dismissing plaintiff's claims under section 1983. The court also granted Blue Chip, Pullaro and Preserver partial summary judgment, dismissing plaintiff's breach of contract claims. Plaintiff subsequently either dismissed or abandoned his claims against the contractor defendants.
As a result, the case went to trial solely against Blue Chip, Pullaro and Preserver. At the close of plaintiff's case, the trial court dismissed his claims against Preserver.
The jury subsequently returned a verdict in plaintiff's favor on his negligence and CFA claims against Blue Chip and Pullaro. On the negligence claim, the jury found that plaintiff also had been negligent in failing to obtain insurance coverage, and it attributed 30% responsibility for the lack of coverage to him. It awarded plaintiff $25,000 in damages for the decrease in property value, and $10,000 in damages for repair costs. On the CFA claim, the ...