October 19, 2007
MARGHERITA DIBERNARD, PLAINTIFF,
ESTATE OF MARIE BARBATO, SUSAN STORMS, EXECUTRIX OF THE ESTATE OF MARIE BARBATO, TODD DIBERNARD, A/K/A CESARIO DIBERNARD, AND MARY ELLEN DIBERNARD, DEFENDANTS.
FRANKLIN MUTUAL INSURANCE COMPANY, PLAINTIFF,
MARY ELLEN DIBERNARD, TODD DIBERNARD, A/K/A CESARIO DIBERNARD AND MARGHERITA DIBERNARD, DEFENDANTS, AND MARY ELLEN DIBERNARD, TODD DIBERNARD, A/K/A CESARIO DIBERNARD, DEFENDANTS/THIRD-PARTY PLAINTIFFS,
SUSAN STORMS, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF MARIE BARBATO, THE ESTATE OF MARIE BARBATO AND JOSEPH TOGNO, PRINCIPAL OF TOGNO INSURANCE AGENCY AND TOGNO INSURANCE AGENCY, THIRD-PARTY DEFENDANTS.
MARGHERITA DIBERNARD, PLAINTIFF-APPELLANT,
JOSEPH TOGNO, PRINCIPAL OF TOGNO INSURANCE AGENCY AND TOGNO INSURANCE AGENCY, FRANKLIN MUTUAL INSURANCE COMPANY, SUSAN STORMS, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF MARIE BARBATO, AND THE ESTATE OF MARIE BARBATO, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket Nos. L-584-02, L-1235-02 and L-1161-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 19, 2007
Before Judges Wefing, Parker and Lyons.
Plaintiff Margherita DiBernard ("Plaintiff") appeals from a jury verdict finding no cause of action against defendants, Joseph Togno and the Togno Insurance Agency (collectively "TIA"), for failing to advise and secure appropriate liability coverage for Mary Ellen and Todd DiBernard ("the DiBernards"), the owners of a dog that bit plaintiff. Plaintiff is also appealing the grant of defendant Franklin Mutual Insurance Company's ("FMI") application for a directed verdict. The following factual and procedural history is relevant to our consideration of the issues advanced on appeal.
On July 2, 2000, a dog belonging to the DiBernards caused injury to Plaintiff.*fn1 On that date, the DiBernards were living as tenants in a home owned by the estate of Marie Barbato.
Marie Barbato was the mother of Mary Ellen DiBernard, Susan Storms, and Henry Barbato; Todd DiBernard was her son-in-law.
At the time of her death on October 12, 1999, Marie Barbato owned the home in question. She had lived there for more than forty years and since 1977 had used the services of TIA for purchasing homeowners insurance coverage.
Before her sudden death, Marie Barbato's two daughters,*fn2
Mary Ellen and Susan, had agreed that Mary Ellen and her family would sell their home and move in with Marie to provide assistance to their aging mother. Mary Ellen's house was sold around the time of Marie's unexpected death and Mary Ellen and her family were planning on moving into her mother's home in the near future. The siblings agreed that Mary Ellen and her family would proceed with their plan to move into her mother's home. The siblings further agreed that Mary Ellen's family would make arrangements to purchase the home. Mary Ellen also agreed that her family would take care of the bills and upkeep of the property, including electric, phones, oil, and insurance. The DiBernards and their dog, J.R., moved into the home on November 24, 1999.
Susan, the eldest daughter of Marie Barbato, had been named executrix under her mother's will. After her mother's death, Susan contacted Joseph Togno to advise him that Mary Ellen had moved into the home and would be taking care of expenses and that Joseph Togno would probably be hearing from her. As executrix, Susan wrote a check dated December 10, 1999, to partially pay the premium on the homeowners insurance policy covering the home. Susan then assumed that no further action was required on her part with respect to the homeowners insurance.
Soon after moving into the home, Mary Ellen visited TIA. Mary Ellen dropped off a premium check and told Joseph Togno that she and her family had moved into her mother's house. Mary Ellen believed that Joseph Togno understood that she had moved in with her family, including her dog, and that he acknowledged that information.
Togno Insurance Agency is a sole proprietorship with only two employees, Joseph Togno and his son, Philip. Joseph and Philip Togno are insurance agents; they do not sell insurance. Instead, when a person comes to the agency to request insurance, either Joseph or Philip fills out an application and submits it to an insurance company that will take the business and requests that the company insure that risk. The insurance company then decides whether to insure the risk. The insurance company used by Togno and Marie Barbato in this case is FMI.
Allstate Insurance Company provided homeowners insurance and automobile insurance to the DiBernards at their previous residence. After moving to Mary Ellen's mother's home, the DiBernards continued their automobile insurance policy through Allstate, but not their homeowners insurance policy.
According to Mary Ellen's trial testimony, TIA never requested that she fill out any new insurance applications; TIA did not advise her about any coverage options other than continuing the policy currently in place; and TIA never advised her that coverage under the policy was limited to the estate and executrix, and that her family was not entitled to any coverage, despite the fact that they were making premium payments. Instead, Mary Ellen assumed "we had coverage under the Togno Agency" once she moved into the home because, consistent with her agreement with her brother and sister, she continued to make premium payments for the homeowners policy in place covering the home. Having decided to maintain the insurance through the agent utilized by her parents for the home since 1977, Mary Ellen did not believe it was necessary to return to her prior Allstate agent or any other agency to seek additional coverage or other advice and did not do so.
On December 8, 1999, TIA transmitted a "speed memo" to FMI advising the carrier of Marie Barbato's death and of the DiBernards' residence in the home. According to Joseph Togno, the purpose of the speed memo was to seek FMI's guidance about what changes should be made to the policy to ensure proper coverage. At least one purpose of the inquiry was to make sure that Mary Ellen and her family were covered as requested. The reply from FMI indicated the policy should be rewritten as a combination dwelling policy. At trial, Joseph Togno testified that, in hindsight, the proper policy to provide coverage to the DiBernards would have been a tenant's policy. However, TIA did not follow up with either the DiBernards or FMI after receiving FMI's response.
The DiBernards continued making quarterly payments for the insurance policy to FMI until July 8, 2000, when the policy came up for renewal. TIA sent the DiBernards a renewal form inviting them to renew the homeowners policy. The renewal form maintained the designation of the deceased Marie Barbato as the named insured. In renewing the policy, Mary Ellen assumed the policy provided her family with the types of coverage listed in the homeowners policy, including liability coverage, and was not informed otherwise.
On July 20, 2000, plaintiff was walking in front of the home when she was allegedly attacked by the dog owned by the DiBernards. She claimed the dog bit her, knocked her over, and caused severe injuries. After plaintiff was taken to the hospital, Mary Ellen called Joseph Togno to advise him of the incident. He told her that he would report the incident to FMI, the issuer of the insurance.
On August 24, 2000, Mary Ellen and her family purchased her mother's home and retained TIA to amend the homeowners policy to make their family the named insured.
Mary Ellen was eventually advised that the FMI homeowners insurance policy for the home did not cover any claim against the DiBernards arising from the dog incident because the policy did not extend liability coverage to tenants of the premises.
Plaintiff brought this action against FMI, Joseph Togno, the Togno Insurance Agency, and Susan Storms by complaint filed April 23, 2004. Plaintiff alleged FMI was obligated to provide insurance to cover the DiBernards because it accepted premium payments. The complaint further alleged that Togno Insurance Agency and Joseph Togno were liable to provide coverage under "the laws of agency and negligence." Lastly, the complaint alleged Susan Storms was negligent in not making sure FMI had notice that the DiBernards were tenants and were covered.*fn3
A trial was held on the FMI coverage action and this action in August 2005. On August 17, 2005, at the close of plaintiff's proofs, the trial judge entered a directed verdict dismissing plaintiff's claims against FMI and granting FMI's motion for summary judgment. The case then proceeded against TIA. On August 22, 2005, the jury returned its verdict finding that TIA had deviated from the appropriate standard of care, but finding that the breach had not been a proximate cause of the absence of coverage.
On October 8, 2005, an order denying plaintiff's motion for judgment notwithstanding the verdict or for a new trial was entered. On February 7, 2006, the court issued a consent order for a stipulation of dismissal with prejudice as to defendants Estate of Marie Barbato and Susan Storms, Executrix.
On April 11, 2006, plaintiff filed a notice of appeal. On appeal, plaintiff presents the following arguments for our consideration:
PURSUANT TO HANNOCH V. WEISMAN [sic] AND CAMP V. JIFFY LUBE #114, BECAUSE PROXIMATE CAUSE WAS THE CENTRAL AND PERHAPS THE ONLY ISSUE IN GENUINE DISPUTE AT TRIAL, THE COURT COMMITTED REVERSIBLE ERROR IN PROVIDING A "BUT FOR" SOLE CAUSATION CHARGE TO THE JURY IN A CASE WHERE CONCURRENT CAUSATION WAS SQUARELY PRESENTED, AND IN LIGHT OF THE ANOMALOUS JURY VERDICT ON THE ISSUE OF PROXIMATE CAUSE, THAT ERROR WAS CLEARLY CAPABLE OF AND DID IN FACT PRODUCE AN UNJUST RESULT.
THE JURY'S VERDICT WAS AGAINST THE WEIGHT OF THE EVIDENCE AND RESULTED IN A MANIFEST MISCARRIAGE OF JUSTICE: THE EVIDENCE OF DEFENDANT'S NEGLIGENCE WAS OVERWHELMING; THE JURY FOUND DEFENDANTS NEGLIGENT; THE JURY'S CONCLUSION THAT DEFENDANT'S NEGLIGENCE WAS NOT A PROXIMATE CAUSE WAS FATALLY TAINTED BY THE COURT'S ERRONEOUS PROXIMATE-CAUSE CHARGE; AND THE REASONS ADVANCED BY THE TRIAL COURT TO JUSTIFY THE RESULT CANNOT BE SUSTAINED AS A MATTER OF LAW.
THE COURT ERRED IN ITS DETERMINATION, AS A MATTER OF LAW, THAT THE INSURER COULD NOT BE VICARIOUSLY LIABLE FOR TOGNOS' NEGLIGENCE BASED ON ITS INCORRECT FINDING THAT THE TOGNOS WERE ACTING AS AN AGENT FOR THE INSURED AND NOT FOR THE INSURER THROUGHOUT THE UNDERLYING TRANSACTION; IT IS WELL-ESTABLISHED UNDER NEW JERSEY STATUTORY AND COMMON LAW THAT, IN ACCEPTING THE PREMIUMS FROM THE DIBERNARDS AND NEGLIGENTLY FAILING TO FOLLOW FRANKLIN MUTUAL'S DIRECTIVE TO REFORM THE POLICY TO A COMBINED DWELLING POLICY, TOGNO WAS ACTING AS AN AGENT ON BEHALF OF THE INSURER, AND TOGNO'S NEGLIGENT ACTS ARE IMPUTABLE TO THE INSURER.
At the end of plaintiff's case, counsel for TIA made an application for involuntary dismissal, pursuant to Rule 4:37. Counsel argued that TIA was entitled to an involuntary dismissal because there was a "significant failing in proof as to proximate cause." Counsel argued that plaintiff was required to prove that TIA was the lone proximate cause of the absence of coverage. He claimed that could not be done since there was testimony about the actions or inactions of the DiBernards' former Allstate agent. In response, counsel for plaintiff argued that there was no evidence that the agent from Allstate was in any way negligent or even consulted. The court agreed with plaintiff's counsel's argument stating, the Allstate agent, Pariso, or Allstate itself is not in this case. Going on, there's not any - I'm not recalling evidence of conversation which Mary Ellen or Todd DiBernard testified to about conversations they had with Pariso or anybody at Allstate to suggest that any duty would have been established by such a conversation.
Later, plaintiff's counsel made no objection to the court's suggested charge on negligence and, particularly, the "but for" proximate cause language.
In plaintiff's counsel's summation, in response to TIA's counsel arguing that the DiBernards were clients of Allstate and not TIA, plaintiff's counsel said, Don't get distracted by any issues in the case that really aren't here about some Allstate agent Pariso. You never heard Mr. Pariso come in. He wasn't brought in by a subpoena by the Togno's. Okay? I brought in a lot of witnesses under subpoena. I have a lot of evidence for you. Don't get distracted.
The relationship was with the house, with the occupants of the house, with the Barbatos, with the family. And when you go there to the Togno's, you don't have to worry about Mr. Pariso out there. That's called a red herring, something that doesn't belong in a case.
Plaintiff's counsel took the position throughout the entire trial that TIA was the agent of the DiBernards, owed them a duty, and failed in that respect. He argued successfully to the court that Allstate was not in the case.
Plaintiff now takes the position that there were concurrent causes of his client's injury, which required that the jury should have been instructed on proximate cause using the "substantial factor" charge. See Model Jury Charge (Civil) § 7.12. Particularly, plaintiff argues that the jury should have been instructed that, even if Allstate or the Allstate agent contributed to the situation, TIA could still be found to be a proximate cause of the loss. According to plaintiff on appeal, the jury should have been instructed that even if Allstate was a cause of the loss, TIA could still be a proximate cause of the loss so long as TIA's negligence was a substantial factor in bringing about the loss.
We hold that plaintiff is estopped from arguing this concurrent cause theory, as it appears from counsel's representation to the trial judge that plaintiff explicitly took the opposite position. See Brett v. Great Am. Recreation, Inc. 144 N.J. 479, 503-04 (1996) (noting that "[t]he doctrine of invited error operates to bar a disappointed litigant from arguing on appeal that an adverse decision below was the product of error, when that party urged the lower court to adopt the proposition now alleged to be error"); McKinney v. Jersey City Med. Ctr., 330 N.J. Super. 568, 595-96 (App. Div. 2000), rev'd on other grounds 167 N.J. 359 (2001) (noting that parties must generally adhere to the theory of law pursued at trial, and will not be heard to complain of a jury instruction submitted on a theory which apparently satisfied the appellant without objection); Pressler, Current New Jersey Rules, comment 2.2 on R. 2:10-2, comment 15.2.1 on R. 4:5-4 (2007) (discussing invited error and judicial estoppel). See also Pressler, supra, comment on R. 2:6-2 (discussing the estoppel effect of issues waived, conceded, or not raised below).
Even if plaintiff were not estopped from arguing that concurrent causes produced the loss in this case, we find there is no basis in the trial record to support such an argument. In this case, proximate cause would have been satisfied if plaintiff had shown by a preponderance of the evidence that but for TIA's negligence, the DiBernards would have been advised of the availability and cost of insurance to protect them and, having been so advised, the DiBernards would have purchased the coverage. Contrary to plaintiff's argument, there were not sufficient proofs in the record to find that Allstate had breached any duty to the DiBernards. There was no proof that the DiBernards even consulted their former Allstate agent. Consequently, there was no basis for the trial judge to have charged Allstate as a possible concurrent cause.
Further, since this matter is an allegation of negligence by an insurance professional with regard to a consumer's desire for coverage, there would have been no action for comparative negligence on the DiBernards' part in light of our Supreme Court's holding in Aden v. Fortsh, 169 N.J. 64 (2001). Therefore, regardless of the issue of estoppel, we find from this record no error, much less plain error, in the court's charging the jury using Model Jury Charges (Civil) §§ 7.10 and 7.11, the "but for" proximate cause test. R. 2:10-2.
After the jury's verdict, plaintiff moved for a judgment notwithstanding the verdict or, in the alternative, a new trial.
On appeal, plaintiff contends that although the jury correctly found the TIA defendants negligent, their conclusion that defendants' negligence was not a proximate cause was against the weight of the evidence. Plaintiff argues that the DiBernards consistently testified that they relied on TIA, therefore assumed that they had homeowners coverage through FMI, and that the jury verdict finding no proximate cause should not stand.
A trial court's decision to grant or deny a motion for a new trial "shall not be reversed unless it clearly appears that there was a miscarriage of justice under the law." R. 2:10-1. To decide if there was a miscarriage, the appellate court defers to the trial court with respect to "intangibles" not transmitted by the record (e.g., credibility, demeanor, "feel of the case") but otherwise makes its own independent determination of whether a miscarriage of justice occurred. Carrino v. Novotny, 78 N.J. 355, 360 (1979); Baxter v. Fairmont Food Co., 74 N.J. 588, 597-98 (1977); Dolson v. Anastasia, 55 N.J. 2, 6-8 (1969).
In this case, plaintiff bore the burden of proving by a preponderance of the evidence that defendants, Togno Insurance Agency and Joseph Togno, were negligent in their failure to advise the DiBernards of the availability of insurance to cover their personal interests. In addition, plaintiff had the burden to prove that this negligence was a proximate cause of plaintiff's injury, failure to have insurance. Proximate cause would be satisfied, therefore, if plaintiff demonstrated that but for TIA's negligence in failing to advise the DiBernards of the availability of the insurance, the DiBernards would have obtained such coverage. This analysis of proximate cause is consistent with the Restatement (Second) of Torts § 432(1) and is also consistent with New Jersey law. See, for example, Canisi v. Wilson, 158 N.J. 490, 505-06 (1999), where the court, in discussing proximate cause in a wrongful birth case, required that the risk must materialize, was reasonably foreseeable, was not remote in relation to the doctor's negligence, and, had plaintiff known of that risk, she would have terminated her pregnancy. Canisi, supra, 158 N.J. at 506.
The Restatement (Second) of Torts § 432(1) recognizes that proximate cause may not be found even where a defendant is found negligent when there is another factor present which would, regardless of defendant's negligence, result in the injury sustained. Section 432(1) states, ". . . the actor's negligent conduct is not a substantial factor in bringing about harm to another if the harm would have been sustained even if the actor had not been negligent." As explained in comment (a) to Section 432(1), "[i]f, without the actor's negligent conduct, the other would have sustained harm, the same in character and extent as that which he receives, the actor's conduct . . . is not even its necessary antecedent, and so it is not a substantial factor in bringing it about." See, e.g., Canisi, supra, 158 N.J. at 506 (holding that even if the defendant doctor was negligent, if the plaintiff would not have terminated her pregnancy, there would be no cause of action against the doctor). See also Illustration 1 to Restatement (Second) of Torts § 432(1).
That the DiBernards may not have purchased a renters policy if offered to them is not, under the facts of this case, a concurrent cause of the incident, calling for a jury charge on concurrent causes. Model Jury Charge (Civil) § 7.12. Rather, it is a necessary predicate in assessing proximate cause. If the jury did not believe the DiBernards would have purchased a policy if offered, the negligence of TIA would not be a "cause" of the loss. See Restatement (Second) of Torts § 432(1).
In this case, defense counsel reminded the jury in summation that, while the DiBernards testified that they would have purchased renters insurance if they had been advised of its availability, in fact, earlier in their married lives, they did not purchase liability insurance when they were tenants. This, he asserted, indicated they would not have purchased such insurance even if TIA had advised them of its existence. Plaintiff's counsel acknowledged that argument in his summation, but stressed to the jury the testimony from the DiBernards that they would have purchased such a policy if it were offered to them. The issue of proximate cause required then, not merely a determination of whether TIA's negligent conduct was a cause of the DiBernards not having insurance, but also whether, if the DiBernards had been advised of the availability of the insurance, they would have purchased it.
We recognize that a jury could reasonably have concluded, based on the DiBernards' prior conduct when they rented and did not obtain insurance, that they would not have obtained a policy in this case. This is an obvious and rational explanation as to how the jury could conclude from the proofs presented to it that there was no proximate cause and supports the jury's verdict.
In order to find TIA liable, therefore, it was necessary to find that it breached its duty, which the jury did find, and that that breach was a proximate cause of the DiBernards' failure to have insurance. What the jury apparently focused on was the failure by plaintiff to convince them by a preponderance of the evidence that the DiBernards would have purchased a policy, if available. That question (evidently resolved against plaintiff) supports the jury's verdict and, hence, we find that the verdict does not constitute a clear miscarriage of justice under the law.
Plaintiff argues that the court erred in finding that the insurer, FMI, could not be vicariously liable for TIA's negligence. Plaintiff contends that TIA was acting as an agent for FMI, by accepting the premiums from the DiBernards and negligently failing to follow FMI's directive to reform the policy to a combined dwelling policy. Therefore, plaintiff argues that the court improperly directed a verdict granting FMI's motion and improperly granted summary judgment on FMI's affirmative claims for a declaratory judgment that it owed no coverage to the DiBernards.
TIA was an independent insurance producer, who never requested coverage for the DiBernards or even attempted to complete an application to present it to FMI as potential insureds. "The general rule is that an insurer is not liable for the negligence of a broker . . . where the negligence stems from advice that the broker has given to the insured." Avery v. Arthur E. Armitage Agency, 242 N.J. Super. 293, 310-11 (App. Div. 1990).
The trial court properly found that TIA was serving the interests of the purported insured, as far as requesting coverage, even if he did act as agent for FMI for purpose of issuing policies. The facts of this case are similar to those in Johnson v. MacMillan, 233 N.J. Super. 56 (App. Div. 1989).
In Johnson, an independent insurance broker, who was an agent for an insurance company undertook to evaluate a client's insurance needs and to make recommendations to him. Id. at 58-59. There, the court found he was not acting as an agent for any one of the insurers he represented, but only for his own client. Id. at 63. The broker's negligence, i.e., failing to recommend a particular available coverage, was not held to be an act of the insurance carrier. Ibid.
Accordingly, FMI is not responsible for the advice or conduct of Joseph or Philip Togno towards the DiBernards. Dismissal of a party at the close of plaintiff's case is appropriate when no rational jury could conclude from the evidence that an essential element of the plaintiff's case is proved. Pressler, Current New Jersey Court Rules, comment 2.1 on R. 4:37-2. Under Rule 4:37-2(b), plaintiff has shown no right to relief which would sustain a judgment in her favor against FMI, and a directed verdict in favor of FMI was appropriately entered.
Therefore, the judgment entered is affirmed.