DORIS S. HUGGINS v. LIBERTY MUTUAL INSURANCE COMPANY

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

DORIS S. HUGGINS and ROBERT L.

HUGGINS,

Plaintiffs-Appellants,

v.

LIBERTY MUTUAL INSURANCE COMPANY,

Defendant-Respondent.

_____________________________________

May 14, 2014

Submitted April 29, 2014 Decided

Before Judges Alvarez and Higbee.

On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1258-11.

Doris S. Huggins and Robert L. Huggins, appellants pro se.

Martin, Gunn & Martin, P.A., attorneys for respondent (Richard C. Bryan, of counsel; Elizabeth K. Merrill, on the brief).

PER CURIAM

Plaintiffs Doris S. Huggins (Huggins) and Robert L. Huggins appeal from the summary judgment order that dismissed their complaint seeking to hold defendant Liberty Mutual Insurance Company (Liberty Mutual) responsible for negligently failing to advise Huggins of policy options and to provide her with adequate homeowners' coverage for losses sustained when her sump pump failed. Having considered the parties' arguments in light of the record and controlling law, we conclude that a genuine factual dispute exists that precludes summary judgment, and that the trial court erred by ruling to the contrary. Accordingly, we reverse.

The following are the facts alleged by plaintiffs as viewed in a light most favorable to their claim. See R. 4:46-2(c). Huggins purchased insurance coverage for her new home from Liberty Mutual on May 20, 2008. The sales agent, who was new and according to Huggins "fumbled and bumbled" through the interview, interviewed her over the phone. Huggins and the sales agent discussed the fact that the house was on a hill, and therefore she did not need flood insurance. Flood damage and sump pump damage are excluded in the same policy provision, but in separate paragraphs. Coverage for flood insurance must be purchased under a separate policy, while sump pump coverage was an available option on the policy Huggins purchased. Huggins told the sales agent that she wanted the most inclusive policy possible. She asked the sales agent if the policy she purchased included all beneficial coverage options possible, and he advised her that it did. When Huggins and the sales agent discussed the policy, the sales agent asked her to describe the house floor by floor, and she told the agent that her house contained a basement and a sump pump.

The policy Huggins purchased was titled "Liberty Guard Deluxe Homeowner Policy." Huggins did buy extra coverage options including "home protector plus," but the language on the policy that she purchased excluded coverage for floods or for damage from a sump pump. Plaintiffs claim that the sales agent never advised Huggins of the availability of the option for sump pump coverage, and further allege that she would have purchased it if she had been told about it.

When Huggins purchased the policy, the sales agent made a mistake on placement of the address on the forms which caused a brief problem at the closing, upsetting Huggins. She then called Liberty Mutual and demanded a new sales agent and discussed her concerns about the competence of the agent on the phone several times with other representatives from Liberty Mutual. Liberty Mutual did not transfer her file to a new agent. Huggins renewed her policy after one year. A few weeks later her sump pump failed, and plaintiffs claim they sustained a loss in the amount of $35,000 for property damage.

Liberty Mutual denied coverage based on the policy exclusion. As a result, plaintiffs filed suit and requested copies of all notes of the initial interview, the form the sales agent filled out when he took information for Huggins' policy, and all documents related to all of her calls to Liberty Mutual. Liberty Mutual produced all detailed call notes for calls after the sump pump failure but no notes of the initial interview or subsequent calls from Huggins about the coverage and her complaints about the agent before the loss. Huggins asked at oral argument why Liberty Mutual did not produce any of the earlier notes which would be most relevant to her claim.

According to the notes produced by Liberty Mutual of calls after plaintiffs made their claim, the sales agent told his supervisor he did offer Huggins the option of sump pump coverage, but that she declined to purchase it. The sales agent further told his supervisor that he wrote this on the initial interview questionnaire, but lost this document.

Plaintiffs' claim is not that the policy covered their loss, but that the Liberty Mutual agent was negligent in failing to advise Huggins about the sump pump coverage option despite her request for the most inclusive coverage and his knowledge that she had a sump pump. There is no dispute that she did not specifically ask for the sump pump option, but there is a factual dispute as to whether it was offered.

The trial court found that because Huggins never specifically asked for sump pump coverage even after she reviewed the policy, she cannot prevail. The court granted summary judgment to Liberty Mutual. Plaintiffs appealed.

The summary judgment standard, set forth in Rule 4:46-2(c), requires trial courts to grant summary judgment when "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law"; see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 528-29 (1995). When a party appeals from a trial court order granting or denying a summary judgment motion, we "'employ the same standard [of review] that governs the trial court.'" Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010) (quoting Busciglio v. DellaFave, 366 N.J. Super. 135, 139 (App. Div. 2004)). Thus, we must determine whether there was a genuine issue of material fact, and if not, whether the trial court's ruling on the law was correct. Henry, supra, 204 N.J. at 330. We review legal conclusions de novo. Ibid.

Insurance brokers, like agents, are obliged to inform insureds of "available coverage." See Aden v. Fortsh, 169 N.J. 64, 79-80 (2001); Weinisch v. Sawyer, 123 N.J. 333, 340 (1991); Rider v. Lynch, 42 N.J. 465, 476 (1964); Lancos v. Silverman, 400 N.J. Super. 258, 267 (App. Div. 2008); Walker v. Atl. Chrysler Plymouth, Inc., 216 N.J. Super. 255, 259-60 (App. Div. 1987). In Sobotor v. Prudential Property & Casualty Insurance Co., 200 N.J. Super. 333, 341-43 (App. Div. 1984), we held that an agent had a duty to explain other coverage options available to the client, even if not specifically requested.

In Lancos v. Silverman, we held that where a homeowner's policy did not include liability coverage, liability for failure to procure this coverage for the homeowner was a factual question. Supra, 400 N.J. Super. at 269. In that case, the homeowner admitted he never specifically requested liability coverage. Ibid. Additionally, the cover letter with the policy stated that there was no liability coverage. Id. at 266. Still, there was a disputed question of fact as to whether the agent had advised the plaintiff of his options to acquire a separate personal liability insurance policy. Id. at 269.

Here, there is a question of fact as to whether Liberty Mutual, through the acts of its agent, was negligent by not offering the sump pump optional coverage, and whether that negligence deprived plaintiffs of coverage for their losses. Since this matter is remanded to the Law Division for trial, Liberty Mutual's unexplained failure to produce any documentation of communications with Huggins prior to her loss should be remedied. The trial court should enter an order requiring Liberty Mutual to produce all the requested records in its possession to plaintiffs, and if the interview form completed by the agent is unavailable, a copy of a blank form of the type used should be provided, along with a certification from Liberty Mutual that a diligent search was undertaken to find the records.

Reversed and remanded for further proceeding at the trial level.