Legal Updates for Insurance Agents & Brokers
Keeping Sympathy Out of Trial and the Importance of Jury Charges To Set the Standard of Care
Edited by Timothy Ventura, Esq.
In Stephens v. 48 Branford Place Associates, LLC, et al., the New Jersey Appellate Division affirmed a jury verdict of no cause for action with regard to the claims asserted against the insurance broker and the agency. In reaching this decision, the court addressed the scope of information to be provided to the jury concerning the plaintiff’s loss and the terms of the jury charge that should be used to establish the agency’s duty.
The plaintiff’s husband was shot and killed while attending a concert held at the property. The Stephens’ estate brought suit against the corporate property owner, its principle and its insurance broker. This claim had been tendered to the property owner’s GL insurance carrier, which declined coverage based upon the terms of an assault and battery exclusion. The plaintiff alleged that the broker had been professionally negligent with regard to the nature of insurance procured on behalf of the property owner. The claims against the broker required resolution of the information that was conveyed to the broker as part of the insurance application process. The property owner’s principle eventually agreed to the entry of a judgment in favor of the plaintiff and against the corporate entity in exchange for an agreement to dismiss the claims against the principle, individually, and for his agreement to cooperate in the plaintiff’s claims against the broker. Following a bench trial in which the property owner offered no defense to the plaintiff’s claim, a damage verdict of $1.0 million was entered. The claims against the broker had previously been severed from the claims against the property owner.
At the trial of the professional malpractice claims, the plaintiff sought to advise the jury that she was suing in her administrative capacity, so the jury would understand the claim involved a death. Instead, since the quantum of damages had already been established at the prior trial, the court refused to disclose the nature of the underlying claims to the jury or that the plaintiff was suing as a legal representative. The jury was simply told that the plaintiff had sustained “a loss.” In affirming this evidential ruling, the Appellate Division held that the trial court’s decision was proper since the issue of damages was not to be decided by the jury, and, therefore, disclosure of the plaintiff’s status as the administrator of the estate was not probative of any issue and could have a prejudicial effect on the jury’s resolution of the liability question.
As part of the instructions to be given to the jury to guide their deliberations, the plaintiff sought to have the court instruct the jury that the insurance broker’s actions needed to be considered in the crucible of being a fiduciary who must give appropriate advice as to the coverage needed in a given business. The trial court refused to provide such an instruction. The Appellate Division affirmed this decision and reiterated that the law only imposed a duty on an insurance broker to use the degree of skill and knowledge generally exercised in the representation of a client seeking insurance coverage.
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