DAVID WILSON, et al. v. WILLIAM G. BILINKAS, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0891-04T50891-04T5

DAVID WILSON AND

DAVID WILSON ASSOCIATES, INC.,

Plaintiffs-Appellants,

v.

WILLIAM G. BILINKAS, W.G.

BILINKAS AND COMPANY, INC.,

WBG LIFE INSURANCE AGENCY, INC.,

PAUL L. GROSS, ROGER A. GROSS,

NIA GROUP ASSOCIATES, LLC,

NIA OMNI, LLC, NIA LTD.,

BILL KLOSS, NIA-BILINKAS,

Defendants-Respondents,

and

HARLEYSVILLE MUTUAL INSURANCE

COMPANY, HARLEYSVILLE INSURANCE

COMPANY OF NEW JERSEY, AND THE

HARLEYSVILLE INSURANCE COMPANIES,

Defendants.

 

Argued November 10, 2005 - Decided

Before Judges Conley and Winkelstein.

On appeal from the Superior Court of New Jersey, Law Division, Camden County, CAM-L-2459-02.

Andrew L. Miller argued the cause for appellants (Paul and Miller, attorneys; Mr. Miller, of counsel and on the brief).

Alan H. Bernstein argued the cause for respondents (Wolf Block Brach Eichler, attorneys; Mr. Bernstein, of counsel; Mr. Bernstein and Stuart J. Polkowitz, on the brief).

PER CURIAM

Plaintiffs David Wilson and David Wilson Associates, Inc. (collectively plaintiffs or Wilson), appeal from an order (1) declaring plaintiffs' expert's opinion to be a "net opinion" and inadmissible, and (2) dismissing plaintiffs' professional negligence complaint against defendant insurance brokers (collectively referred to as NIA). The court denied plaintiffs' motion for reconsideration. We reverse.

Plaintiffs are in the business of designing, selling, installing and inspecting children's playground equipment, including tube slides. Prior to 1996, at plaintiffs' request, NIA obtained a policy of general liability insurance for plaintiffs from Harleysville Insurance Company. The policy included "completed operations" coverage, which stated: "'Products-completed operations hazard': a. Includes all 'bodily injury' and 'property damage' occurring away from premises you own or rent and arising out of 'your product' or 'your work' [subject to certain exceptions]."

The policy was to be effective from June 1996 through June 1997. It was canceled, however, soon after it was issued as a result of plaintiffs' failure to pay the premium. On August 8, 1996, plaintiffs filed for bankruptcy.

While in effect, the policy insured plaintiffs against bodily injury sustained by third parties on the playground equipment. David Wilson believed that as "completed operations coverage," the coverage would continue after the policy was cancelled.

In February 1998, a child was injured at a Massachusetts amusement park while using one of Wilson's tube slides. A lawsuit ensued, which settled for $2.425 million. Wilson is responsible for $2 million of the settlement.

Wilson sought coverage for the lawsuit from Harleysville under the completed operations provision of the policy. Harleysville disclaimed coverage because Wilson was not insured at the time of the accident. Wilson's claim against NIA is that it failed to properly explain to him that his completed operations coverage would no longer be effective after the insurance policy was cancelled. He claims that due to this misconception on his part, he was prevented from purchasing a policy of "discontinued operations" that would have insured him for accidents occurring on the playground equipment already installed even after he went out of business and no longer had insurance in effect.

Plaintiffs submitted an expert's report authored by Jay Frank, an insurance broker. In his report, dated February 7, 2004, Frank concluded that NIA failed in its duty to plaintiffs by not advising plaintiffs of their continuing exposure to claims from prior equipment installations. Frank opined that "[w]hen an account terminates operations it is the broker/agent's responsibility to advise his client in writing as to how this continuing loss exposure can be insured." Because NIA did not do so, it was Frank's opinion that NIA was responsible for plaintiffs' uninsured financial loss. Frank said it was his opinion "as an insurance broker, agent and consultant with 45 years experience in the brokerage/agency business that the defendants in this case failed to perform according to the standards expected in the insurance industry . . . ."

On the day the case was scheduled for trial, the Law Division judge found that Frank's opinion was a net opinion and inadmissible. Consequently, because all parties agreed that plaintiffs could not proceed to trial without an expert, the judge dismissed the complaint. In arriving at his decision, the judge stated:

What [plaintiffs' counsel] is, in essence, asking for is that I reopen discovery to either permit Mr. Frank to testify beyond what's contained in his report, perhaps explicitly. I understand the argument that it's inferred in his report what the basis is, but at least to permit Mr. Frank to testify explicitly concerning . . . what were the basis or bases of his opinion.

. . . .

Problems with experts going beyond their report and problems with experts' opinions being a net opinion are not exceptional circumstances. They happen all the time. . . .

[L]et me indicate for the record, I don't think that the defense, other than the costs, have really demonstrated any prejudice. So to that extent, everything else being equal, I would grant the application. The case isn't a horrendously old case. It's not even that old. It's got an 02 docket.

But I think the application of best practices requires this disposition. And if I'm wrong, then the Appellate Division can say I'm wrong.

. . . .

All right. That's my ruling because the plaintiffs agree that without an expert, they can't proceed.

In other words, the trial judge dismissed plaintiffs' complaint because, in his view, Frank's report was a net opinion and the court could not extend the discovery period to allow Frank to supplement the opinion. We respectfully disagree. It was not necessary to extend discovery for the expert to supplement his opinion; he could have done so during the trial.

An expert's opinion must "be supported by facts or data either in the record or of a type usually relied upon by experts in the field." Scully v. Fitzgerald, 179 N.J. 114, 129 (2004); N.J.R.E. 703. Bare conclusions of an expert that are not supported by factual evidence are inadmissible. Buckalew v. Grossbard, 87 N.J. 512, 524 (1981).

In a professional negligence case, a "plaintiff must produce expert testimony upon which the jury could find that the consensus of the particular profession involved recognized the existence of the standard defined by the expert." Taylor v. DeLosso, 319 N.J. Super. 174, 180 (App. Div. 1999). The expert must reference either a written document, "or even unwritten custom or practice indicating that the consensus of the [professional] community recognizes a [particular] duty. . . ." Ibid.; see also Kaplan v. Skoloff & Wolfe, P.C., 339 N.J. Super. 97, 103 (App. Div. 2001) (quoting Taylor, supra, id. at 182) (expert must reference either written document or "standard, custom or recognized practice, other than [expert's] personal view").

Here, the report submitted by Frank was based upon not only his experience in the insurance industry, but also on "the standards expected in the insurance industry." The report did not say what those standards were, nor, for that matter, did it mention any custom or recognized practice in the industry. Yet, this deficiency in the report did not, under the circumstances, render Frank's opinion a net opinion. Frank could have provided the missing information at trial.

While an expert's trial testimony is confined to the opinion reflected in his or her report, "logical predicates for and conclusions from statements made in the report are not foreclosed." McCalla v. Harnischfeger Corp., 215 N.J. Super. 160, 171 (App. Div.), certif. denied, 108 N.J. 219 (1987); see also Velazquez v. Jiminez, M.D., 336 N.J. Super. 10, 45-46 (App. Div. 2000) (expert's trial testimony that included additional fact not in expert's report was admissible as "logical predicate" of expert's opinion), aff'd, 172 N.J. 240 (2002); Velazquez v. Portadin, M.D., 321 N.J. Super. 558, 576-77 (App. Div. 1999), (limiting defense expert to statement of bare conclusion without giving expert opportunity to explain reasons not fair or reasonable so long as expert's report provided notice to plaintiff of expert's opinion), rev'd on other grounds, 163 N.J. 677 (2000); Ferrante v. Sciaretta, 365 N.J. Super. 601, 609 (Law Div. 2003) (quoting McCalla, supra, 215 N.J. Super. at 172) (party cannot "eschew discovery and then object to the admission of materials that were fairly attainable through . . . depositions, and which logically flowed from the expert report already provided").

Frank's report put NIA on notice that his opinion was based on "standards expected in the insurance industry." Frank could have supplemented his opinion during the course of the trial by providing the standards, custom or recognized practice upon which his opinion was based. Defendants had an opportunity to depose Frank prior to trial. At the deposition, they could have questioned Frank about what those standards were, or, whether there existed any other custom or recognized practice in the professional community upon which Frank based his opinion. Apparently, defendants did not do so. Thus, as the Ferrante court appropriately noted, when a defendant has an opportunity to explore the basis of the expert's report during discovery but fails to do so, the defendant cannot then object to the admission of the opinion as "net." 365 N.J. Super. at 609. That is what happened here.

Contrary to the trial judge's conclusion that additional discovery would have been necessary to allow Frank to supplement his opinion, that is simply not the case. Had the trial gone forward, plaintiffs' counsel could have questioned Frank about the standards, custom or other recognized practice upon which he relied to form his opinion. If Frank was unable to point to a basis for his opinion, other than his own personal view, defense counsel could then have moved to have the opinion stricken as net.

A trial is a search for the truth. A jury should be given the opportunity to undertake its function of deciding issues based upon all relevant evidence, which includes an opportunity to "weigh and balance" the expert opinions on both sides of an issue. Hall v. Zuckerman, 202 N.J. Super. 455, 459 (App. Div. 1985); see also McCalla, supra, 215 N.J. Super. at 171; N.J.R.E. 402.

 
Reversed. We remand for further proceedings consistent with this opinion.

Plaintiffs have not appealed from the summary judgment order dismissing its complaint against Harleysville.

The appendix on appeal does not contain excerpts of Frank's deposition. If Frank was asked about the standards he referred to in his opinion, we have not been advised of what his answers were.

(continued)

(continued)

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A-0891-04T5

November 21, 2005