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Estate of Parr v. Buontempo Insurance Services

June 24, 2008

ESTATE OF HELEN V. PARR, PLAINTIFF-APPELLANT,
v.
BUONTEMPO INSURANCE SERVICES, JOSEPH BUONTEMPO, SUN LIFE FINANCIAL, DEFENDANTS-RESPONDENTS, AND AMERICAN INVESTORS LIFE, WALNUT STREET SECURITIES, INC., SAMMONS SECURITIES COMPANY, L.L.C., DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, L-2500-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued June 2, 2008

Before Judges Parrillo, S.L. Reisner and Baxter.

Plaintiff Estate of Helen V. Parr appeals from two trial court orders dated May 1, 2007, dismissing plaintiff's amended complaint against defendants Buontempo Insurance Services, Joseph Buontempo, and Sun Life Financial.*fn1 We reverse and remand.

I.

Plaintiff contended that between 1998 and 2002, Joseph Buontempo, a registered securities broker and financial advisor, induced Helen Parr, an elderly woman, to make investments which yielded Buontempo high commissions but which were inappropriate to Parr's age and financial circumstances.*fn2 Plaintiff also contended that Sun Life wrongfully allowed Buontempo to sell its inappropriate investment vehicles to Parr, in violation of its own investment guidelines. Plaintiff's complaint alleged professional malpractice against Buontempo, and breach of fiduciary duty and consumer fraud against all of the defendants.

Defendants filed motions to dismiss the complaint as untimely and on several other grounds. In a written opinion dated September 8, 2006, the motion judge dismissed the Consumer Fraud Act (CFA) and breach of fiduciary duty claims against Buontempo individually. She denied the motions to dismiss the CFA claims against all other defendants, rejecting defendants' contentions that the claims had not been pled with sufficient specificity. She denied the motion to dismiss the malpractice claim, pending a Lopez*fn3 hearing. On December 11, 2006, the judge entered an order dismissing the complaint without prejudice to plaintiff taking Buontempo's deposition to determine whether plaintiff could obtain evidence to support its claims concerning the application of the discovery rule.*fn4

After taking Buontempo's deposition, plaintiff filed an amended complaint alleging CFA violations, common law fraud and malpractice. Again, defendants filed a motion to dismiss the amended complaint on statute of limitations and other grounds. In opposing the motions, plaintiff contended that Parr could not have known that her investments were inappropriate, because Buontempo failed to provide her with legally required disclosures about them. Plaintiff also contended that its March 2006 complaint was timely, because the claims for malpractice, common law fraud and Consumer Fraud Act violations did not accrue until, at the earliest, January 2001, when Parr first suffered an ascertainable financial loss on the investments.

With its opposition papers, plaintiff also filed an expert report, explaining in considerable detail why it was malpractice for Buontempo to sell variable life annuities to an elderly client with limited resources, and why the sales constituted fraud in the absence of certain legally-mandated disclosures which Buontempo could not document that he had made to the client. The expert also opined that Sun did not follow its own internal policies or it would not have approved the sales. He further opined that January 2001, when Parr received a year-end statement showing losses in her account, "was probably the first time Mrs. Parr could have possibly recognized that the Sun Life policies were unsuitable for her needs."

The motions were heard before a second judge. In an oral opinion placed on the record on May 1, 2007, the second motion judge dismissed plaintiff's complaint on statute of limitations grounds.*fn5 The judge concluded that plaintiff's causes of action against Sun Life and Buontempo accrued when she purchased the annuities and that her estate had not established grounds to invoke the discovery rule.

II.

Because the motion judge considered evidence outside the pleadings, he converted the motion to dismiss to one for summary judgment. R. 4:6-2 Our review of a trial court's decision granting summary judgment is de novo, employing the same Brill*fn6 standard that the trial court uses to decide the motion. Prudential Prop. & Cas. Ins. Co. ...


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