On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-13-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Fuentes, Gilroy and Ashrafi.
Plaintiffs Robert and Antonia Flaherty appeal from an order granting summary judgment to defendant Dalton Insurance Agency, LLC (Dalton) on their claim of negligent procurement of insurance for Robert Flaherty's employer. We affirm.
Viewed most favorably to plaintiffs, see R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), the evidence presented in Dalton's summary judgment motion revealed the following facts. Flaherty was employed as an investigator with the law firm of Tomar, Simonoff, Adourian, O'Brien, Kaplan, Jacoby & Graziano. The Tomar firm provided a vehicle to Flaherty for his business and personal use. In February 2000, Flaherty was injured in a motor vehicle accident while driving the firm's vehicle for personal reasons.
Because he claimed the extent of his injuries exceeded the $300,000 liability coverage of the other driver's insurance policy, Flaherty filed a claim for underinsured motorist coverage with Harleysville Insurance Company, the carrier that had issued a business motor vehicle policy to the Tomar firm. The Harleysville policy had been procured for the Tomar firm by defendant Dalton in 1999, and it had a $1,000,000 coverage limit for underinsured motorist claims.
However, the policy also contained a step-down provision that reduced the limits of underinsured motorist coverage to any lower limit fixed in a personal automobile policy that covered a claimant other than one who was a "named insured" of the Harleysville policy. The only named insured in the policy was the Tomar firm. Flaherty was also covered by a personal automobile policy issued by Eagle Insurance Company to his wife. That policy had coverage limits of $50,000 per person and $100,000 per accident for underinsured motorist claims.
Harleysville denied Flaherty's claim based on the step-down provision of its policy, asserting that the lower policy limits of the Eagle Insurance policy were applicable and that the other driver had insurance coverage exceeding those limits. Flaherty eventually settled his lawsuit against the other driver for $285,000.
In December 2005, plaintiffs brought the current cause of action against Harleysville and Dalton for coverage under the Tomar firm's business policy. The claim against Harleysville was that the step-down provision of the policy was not enforceable. The claim against Dalton was that it had negligently procured a policy with the step-down provision rather than a policy that provided $1,000,000 of underinsured motorist coverage for any employee driving a vehicle owned by the Tomar firm.
Dalton filed a third-party complaint against J.S. Braddock Agency as the insurance agent that had originally procured a policy from Harleysville for the policy period preceding Flaherty's accident.
In 2009, Harleysville successfully appealed before us the trial court's denial of its motion for summary judgment. In an unpublished opinion, we stated that the step-down provision of the policy had been determined to be enforceable by the Supreme Court in Pinto v. N.J. Mfrs. Ins. Co., 183 N.J. 405 (2005). We further held that legislation enacted after Pinto to prohibit such step-down provisions, N.J.S.A. 17:28-1.1f, was to be applied prospectively only, as we had previously held in Olkusz v. Brown, 401 N.J. Super. 496, 499 (App. Div. 2008). Flaherty v. Harleysville Ins. Co., A-3796-07 (App. Div. June 11, 2009). As a result of our decision, Harleysville was dismissed from the case.
Dalton then moved for summary judgment alleging that, before Pinto, it did not owe a duty to advise a business insured such as the Tomar firm regarding how it might avoid a step-down clause of a policy. The trial court agreed and granted summary judgment dismissing plaintiffs' complaint by order dated January 22, 2010. Plaintiffs moved for reconsideration, arguing that Pinto was not the relevant case but that Dalton's duty should be determined in accordance with the subsequent holding of the Supreme Court in Pizzullo v. N.J. Mfrs. Ins. Co., 196 N.J. 251 (2008). ...