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Michael Kirk v. Allstate Insurance Company and Richard L. Dawkins

June 24, 2011


On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-8304-05.

Per curiam.


Argued November 17, 2010 -- Decided Before Judges Fisher and Simonelli.

Plaintiff Michael Kirk became disabled as the result of an automobile accident. His wife, Donna Kirk (Mrs. Kirk), had an automobile insurance policy with defendant Allstate Insurance Co. (Allstate). The policy included bodily injury liability and uninsured/underinsured (UM/UIM) coverage of $100,000/$300,000, property damage liability coverage of $100,000, basic personal injury protection (PIP), including a medical expense benefit of $250,000, and added PIP coverage, including PIP Option 8, which provided income continuation benefits of $700 per week with a maximum of $72,800 for each person (i.e., a two-year maximum).*fn1

Plaintiff alleged that Allstate's agent, defendant Richard Dawkins, negligently failed to assess his insurance needs and advise him of the availability of PIP Option 16, which provides income continuation benefits for as long as the disability continues. In this matter, plaintiff sought to reform the automobile policy to include PIP Option 16.

The Kirks also had a personal umbrella protection (PUP) policy with Allstate, which provided excess liability coverage of up to $5 million. Plaintiff alleged that Dawkins negligently failed to advise him that the policy did not include excess UM/UIM coverage. He sought to reform the PUP policy to include that coverage.

Following a four-day bench trial, the trial judge issued a written opinion and entered judgment in defendants' favor. We affirm.


Mrs. Kirk had an Allstate automobile insurance policy prior to marrying plaintiff.*fn2 Plaintiff became an insured family member under her policy after their marriage in 1977. At that time, Mrs. Kirk's policy included a $700 weekly income continuation benefit for up to one year, which was the maximum coverage automobile insurance companies could offer at the time.

After 1978, Dawkins became the Kirk's Allstate insurance agent. There is no evidence that Dawkins had any training or experience with and gave any information or advice about policies offered by other insurers. Ostensibly, he only knew about and could only sell Allstate policies.

In 1983 or 1984, Mrs. Kirk met with Dawkins to discuss purchasing additional insurance coverage. She subsequently purchased a $1 million PUP policy, which was the maximum excess liability coverage Allstate offered at that time. The policy is a relatively simple one that only provides excess liability coverage. Dawkins testified the policy did not provide excess UM/UIM coverage, and he would have reviewed the policy with Mrs. Kirk at the time of the sale, but would not have gone through the wording of the policy itself. Plaintiff believed the policy included excess liability coverage for the family's automobiles, including excess UM/UIM coverage. However, his belief was based on what Mrs. Kirk had told him; nothing Dawkins said caused him to reach that conclusion.

According to plaintiff's expert, beginning in 1984, New Jersey law required automobile insurance carriers to send their policyholders a Buyer's Guide and coverage selection form. Insurers could not issue a new or renewal policy unless the policy holder filled out and returned the coverage selection form with the coverage options he or she selected. The Buyer's Guide explained, and the coverage selection form listed, all available coverage options, including options for income continuation benefits.

Allstate would renew its automobile policies every six months. Forty days prior to renewal, Allstate would send its policyholder a renewal package containing a Buyer's Guide, a coverage selection form, policy information, and a declaration page that listed the policyholder's current coverage choices. Although plaintiff claimed he never saw the Buyer's Guide, his insurance expert assumed that Allstate sent it and the coverage selection form to its policyholders every six months, as the law required. More importantly, plaintiff admitted receiving the renewal packages, reading the declaration sheets to verify that the name, address, policy number and policy limits were correct, and read nothing further. The declaration sheets listed the selected income continuation benefits of PIP Option 8.

Beginning in 1989, Allstate's coverage selection form included PIP Option 16. Mrs. Kirk did not select that option. Instead, she apparently submitted a coverage selection form selecting PIP Option 8, which replaced the one-year period of income continuation benefits she had selected in 1977. She apparently continued selecting that PIP Option 8 after 1989 because that option appears on the declarations sheet processed on June 17, 1997, for the ...

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