United States District Court, D. New Jersey
CANUSA COPORATION, as a subrogee of ANW/CRESTWOOD, INC. Plaintiff,
THE OWENS GROUP LTD., INC., Defendant.
OPINION & ORDER
before the Court are the parties' competing motions for
summary judgment. Plaintiff Canusa Corporation
("Canusa"), as subrogee of ANW/Crestwood, Inc.
("ANW"), moves for partial summary judgment on four
of the affirmative defenses asserted by defendant Owens Group
LTD., Inc. ("Owens"). (DE 40). Defendant Owens
moves for summary judgment seeking to dismiss all of the
claims in this five-count complaint. (DE 41).
reasons explained herein, I will grant in part and deny in
part Canusa's motion for summary judgment. I will also
grant in part and deny in part Owens's motion for summary
New Jersey corporation, was "engaged in the procurement,
distribution and sale of craft papers, cardstock and other
related products" from the 1980's until 2012 (PSOF
¶¶ 1-2; see also DSOF ¶ 3). In 2012,
an involuntary petition under Chapter 7 of the U.S.
Bankruptcy Code was filed against ANW. (PRSOF ¶ 2). Todd
Caliguire was president of ANW from 2001 until 2012. (PSOF
the plaintiff here, is a subrogee of ANW by virtue of a 2001
lending agreement in which Canusa became a secured lender to
ANW. (PSOF ¶ 51). Pursuant to a bankruptcy court order,
Canusa was afforded the right to commence and prosecute
certain causes of action belonging to ANW, including those
claims asserted here. (Id.; DSOF ¶ 2).
is a licensed insurance broker in New Jersey. (DSOF ¶
4). From ANW's inception until September 2011, ANW was a
client of Owens. (DSOF ¶ 5; PSOF ¶ 4). Brian
Bonelli was an account executive with Owens and was
responsible for the ANW account beginning in 2008 through
2011. (PSOF ¶ 7; DSOF ¶ 6).
ANW's warehouse and insurance needs
2002, ANW leased a warehouse located at 510 Ryerson Road,
Lincoln Park, New Jersey. (PSOF ¶I4). ANW used this
warehouse as a multifunction space-storing its inventory and
property and operating its business from there.
[Id.). The warehouse was located near a river in a
FEMA-designated "AO9" flood zone, i.e., a
high-hazard area that had the potential to flood.
(Id. ¶ 20).
through Caliguire, worked with Owens to purchase insurance
for ANW and its warehouse. (Id. ¶¶ 15-16).
Owens procured a variety of insurance policies-automobile,
property, general liability, employment practices liability,
flood and other coverages. [Id. ¶ 17). For
example, beginning in 2004, The Hartford provided ANW's
primary annual packaged policy, which comprised business
personal property, business income insurance, automobile
insurance, and general liability insurance. [Id.
¶¶ 18-19). However, The Hartford package expressly
excluded coverage for floods. (Id. ¶ 19). Owens
therefore obtained a $500, 000 National Flood Insurance
Program ("NFIP") policy through Travelers for ANW.
(Id. ¶ 23; DSOF ¶ 8).
taking over the account in 2008, Bonelli understood that the
ANW warehouse was in a flood zone and understood that
ANW's inventory and personal property in the warehouse
was valued at approximately $6 million. (PSOF ¶ 21).
Thus, Bonelli considered ANW to be underinsured with respect
to flood coverage. (Id. ¶ 22).
Renewal of ANW's policies
April 8, 2011, Bonelli and his supervisor, Jean Dennehy, went
to the ANW warehouse to meet with Caliguire to discuss
ANW's insurance needs and renewal of its policies. (PSOF
¶ 27; DSOF ¶ 9). Bonelli and Dennehy observed that
the warehouse was located near a river and thus was
susceptible to flooding. (PSOF ¶ 29).
April 8, 2011 meeting primarily focused on renewal of The
Hartford package of policies; however, the issue of
increasing ANW's flood insurance was also discussed.
(Id.; DSOF ¶ 9). While the parties do not
recall who first suggested the possibility of acquiring
excess flood insurance, they do not dispute that Bonelli and
Dennehy agreed during the meeting to attempt to provide ANW
with quotes for excess flood insurance. (PSOF ¶ 29).
the meeting, on April 11, 2011, Bonelli emailed The Hartford
and a representative at Westrope, Vincent Flemming, regarding
excess flood insurance for ANW. (Id. ¶¶
33-34). Westrope was a wholesale insurance broker that Owens
used for excess and surplus lines of insurance. [Id.
¶ 35). Bonelli indicated that he was
interested in sourcing $6 million in flood coverage for ANW
and asked Flemming to provide a quote. [Id. ¶
April 19, 2011, Flemming responded to Bonelli with a
"quote indication" of $26, 000 for $2 million in
coverage. (Id. ¶ 37). This was not a formal
quote, but Bonelli understood that one would be made
available on request. (Id. ¶ 38). Bonelli never
informed Caliguire in writing of this quote indication.
(Id. ¶ 39).
and Bonelli next spoke at least twice via telephone on May 3,
2011. (Id. ¶ 40). The parties dispute the
contents of those conversations.
contends that he and Bonelli discussed The Harford policy
renewal, reduction of ANW's business personal property
insurance in California from $250, 000 to $100, 000, and
reduction of ANW's business income insurance from $6
million to $2 million or less. (Id. ¶¶ 40,
42). The quote indication from Westrope was never discussed,
says Caliguire, and therefore never rejected. (Id.
¶ 41). Instead, according to Canusa, Bonelli informed
Caliguire that excess flood insurance was not available.
(Id. ¶ 40). This last point-that the ultimate
message conveyed to Caliguire was that excess flood insurance
was not available-Owens curiously concedes for purposes of
these motions while also contesting die contents of the
conversations. (See DSOF ¶ 10).
to Owens, Bonelli informed Caliguire of the Westrope quote
indication during their May 3, 2011 telephone conversations.
Caliguire rejected the quote, says Owens, because Caliguire
claimed that $26, 000 was too costly. (DRSOF ¶¶
39-41). Owens points to ANW activity reports as confirmation
of its position. These activity reports contain notes
inputted by Bonelli. On May 3, 2011, for example Bonelli made
this entry: "Todd advised to lower BPP for CA to 100K
instead of 250K, and he is still considering lowering die BI
as he feels it is to high. I have requested revised quotes
for 2MM and 4MM per his request." (DE 45-4 at 76;
sic in original). An entry from a minute later reads
"PCKG: request revised with 100K BPP in CA, also
requesting lower BI to 2MM and 4MM." (Id.). In
separate entries from May 3, 2011, under "FLOD: Excess
flood indication" the following activities were
reported: "Spoke with insured and he advised that he
feels 2MM is to high. If you were to quote 500K and 1MM would
we still be hitting the minimum premium of 25k?",
"advised insured he advised 2MM might be to high, wants
quotes for 500K and 1MM. requested from underwriter",
and "received confirmation ro carrier that we would
still be hitting minimum premium of 25K" under lower
limits. (DE 45-4 at 78; sic in original). No other
entries related to flood insurance indicate what follow-up
information, if any, was conveyed to ANW.
August 28, 2011, Hurricane Irene made landfall in New Jersey.
(PSOF ¶ 46; DSOF ¶ 11). As a result, the ANW
warehouse was flooded and a significant portion of ANW's
inventory and property was destroyed. (PSOF ¶ 47; DSOF
¶ 11). There was approximately $6 million in inventory
in the warehouse at the time. ANW was paid $500, 000 under
its NFIP flood insurance policy, but its total losses far
exceeded that amount. (Id.).
December 8, 2016, Canusa filed its complaint in this action.
complaint asserts five causes of action:
Count 1: Negligent Procurement of
Insurance/Malpractice (Compl. ¶¶ 24-31);
Count 2: Negligent Misrepresentation (Compl.
Count 3: Breach of Fiduciary Duty (Compl.
Count 4: Breach of Contract (Compl.
Count 5: Breach of Implied Covenant of Good
Faith and Fair Dealing (Compl. ¶¶ 62-73).
January 25, 2017, Owens filed its answer to the complaint and
asserted 21 affirmative defenses. (DE 6). During the course
of discovery, Owens withdrew eight (see stricken
items in chart, below), but continued to assert 13
affirmative defenses (PSOF ¶ 57):
Failure to State a Claim
No Legal Duty
Waiver, Laches, Reo Judicata, Collateral-Estoppel,
Judicial Estoppel, and Equitable Estoppel
Assumption of Risk
All Applicable Defenses under the Contract
Failure to Mitigate
Damages were Caused by Plaintiff or a Third Party
Owens complied with all laws
No Proximate Cause
Absence of Privity
Entire Controveroy Doctrine
Failure to Join Necessary Parties
Failure to Supply an Affidavit of Merit
Competing motions for summary judgment
March 29, 2019, the parties filed the competing motions for
summary judgment at issue here.
Canusa's motion (DE 40)
moved for partial summary judgment seeking to dismiss four
affirmative defenses raised by Owens in its Answer: (1) the
Second Affirmative Defense: No Legal Duty; (2) the Sixth
Affirmative Defense: Assumption of Risk; (3) the Eighth
Affirmative Defense: Failure to Mitigate; and (4) the Tenth
Affirmative Defense: Comparative Negligence.
second affirmative defense is "that it had no legal duty
to procure excess flood insurance for ANW . . . ." (PSOF
¶ 59; DRSOF ¶ 59). Canusa moves to dismiss this
defense while simultaneously moving for an order that Owens
had a duty as a matter of law to act in good faith and with
reasonable skill when it undertook to provide ANW excess
flood insurance quotes. (DE 40-1 at 5).
sixth affirmative defense is that "Todd Caliguire, who
is a sophisticated businessman, assumed the risk that his
business would be flooded when he moved into a flood zone and
close to a body of water. In addition, Mr. Caliguire (ANW)
assumed the risk that he would not have enough flood
insurance when he decided not to purchase excess flood
insurance offered to him by Owens Group prior to Hurricane
Irene." (PSOF ¶ 60; DRSOF ¶ 60). Canusa
asserted in its briefing that Owens's assumption of the
risk defense should be dismissed because New Jersey has
essentially eliminated this defense except in limited
circumstances not applicable here. (DE 40-1 at 16-17). Owens
agrees and withdrew this defense. (DE 45 at 10). Accordingly,
Canusa's motion to dismiss Owens's sixth affirmative
defense is GRANTED.
eighth affirmative defense is "that ANW failed to
procure excess flood insurance and therefore failed to
mitigate its damages from Hurricane Irene. In addition, it is
unclear at this time whether ANW could have taken any
additional steps to minimize its damages after Hurricane
Irene, including but not limited [to] exploring the immediate
sale of its business or salvage of any damaged equipment or
property." (PSOF ¶ 61; DRSOF ¶ 61). Canusa
moves to dismiss this defense because ...