MAURICE ISSA, v. LLOYDS OF LONDON

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-1346-19T2

MAURICE ISSA, individually,
and d/b/a VENICIA
DIAMONDS & JEWELRY,

          Plaintiff-Appellant,

v.

LLOYDS OF LONDON, ALL
POINT INSURANCE AGENCY,
GPV HOLDINGS, LLC, and
PREFERRED MUTUAL,

          Defendants,

and

INTERNATIONAL JEWELERS
UNDERWRITERS AGENCY,
LTD, ANTONIO ACOSTA,
and MICHAEL NEMAN,

     Defendants-Respondents.
_____________________________

                    Argued October 20, 2020 — Decided November 4, 2020

                    Before Judges Yannotti, Haas, and Mawla.
             On appeal from the Superior Court of New Jersey, Law
             Division, Bergen County, Docket No. L-4937-17.

             Peter J. Koulikourdis argued the cause for appellant
             (Koulikourdis & Associates, attorneys; Peter J.
             Koulikourdis and Joseph Takach, on the briefs).

             Charles F. Kellett argued the cause for respondents
             International Jewelers Underwriters Agency, Ltd.,
             Antonio Acosta, and Michael Neman (Kaufman
             Dolowich & Voluck, LLP, attorneys; Robert A. Berns
             and Charles F. Kellett, of counsel and on the brief).

PER CURIAM

      Plaintiff Maurice Issa, individually and doing business as Venicia

Diamonds & Jewelry, appeals from an October 25, 2019 order granting summary

judgment to defendants International Jewelers Underwriters Agency, Ltd. (IJU),

Antonio Acosta (Acosta), and Michael Neman (Neman). IJU, an insurance

producer; Acosta, its sole shareholder; and Neman, an independent contractor

of IJU; collectively procured plaintiff's insurance policy from Lloyds of London

(Lloyds)1.

      In August 2015, an unidentified individual entered plaintiff's store,

assaulted and bound plaintiff, and removed jewelry from the store. Plaintiff




1
 We utilize "Lloyds" as opposed to "Lloyd's," which we understand is the actual
name of the company, to be consistent with the record.
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alleged losses in excess of $1 million. He submitted claims for compensation

under his insurance policy, which Lloyds denied following an investigation.

      The declination letter, cited the "Stock Records Clause" in the policy,

which stated:

            It is a condition under this [i]nsurance that in the event
            of a claim being made under this [i]nsurance, the
            [i]nsured shall provide [Lloyds] or their representatives
            with all available [i]nformation including documentary
            evidence, whether these be official or unofficial, of all
            purchases, sales and other transactions of insured stock.
            This information will be utilized by [Lloyds] or their
            representatives to assist in quantifying the amount of
            loss claimed.

            In the event that the information provided does not
            satisfactorily substantiate the quantum claimed,
            [Lloyds] shall be liable only for the amount of claim
            accounted for. Any settlement beyond this figure shall
            be solely at the discretion of [Lloyds] unless otherwise
            endorsed herein.

The letter also cited the "Conditions" provision of the policy, which echoed

plaintiff's obligation to produce his stock records, "inventory," "book[] of

account, bills, invoices and other vouchers" requested by Lloyds, and submit to

a deposition if necessary.    Notably, the letter cited a paragraph from the

conditions provision, which stated: "If the [i]nsured shall make any claim

knowing the same to be false or fraudulent, as regards amount or otherwise, this

[i]nsurance shall become void and all claims hereunder shall be forfeited."

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      The letter concluded as follows:

            [Lloyds] claim investigation revealed that Venicia did
            not suffer a fortuitous loss recoverable under the
            [p]olicy and that you made false or fraudulent
            statements regarding the loss details and the amount of
            the claim. [Lloyds has] also determined that you failed
            to produce requested materials and information that
            were material to [Lloyds'] investigation; that Venicia
            violated the recordkeeping conditions of the [p]olicy;
            and that the violations of the [p]olicy conditions
            appreciably and significantly prejudiced [Lloyds]. As
            such, [Lloyds does] not owe any coverage under the
            [p]olicy for this loss.

      In 2017, plaintiff filed a complaint, naming defendants. The complaint

alleged breach of contract against Lloyds; and breach of contract, breach of the

covenant of good faith and fair dealing, fraud, violations of the New Jersey

Consumer Fraud Act (CFA),  N.J.S.A. 56:8-1 to -20, misrepresentation, unjust

enrichment, and professional malpractice against IJU, Acosta, and Neman.

These claims were premised on plaintiff's allegation that IJU, Acosta, and

Neman falsely represented that the Lloyds policy protected plaintiff against

losses from robbery and that defendants failed to advise plaintiff on the extent

of the policy's coverage. Specifically, plaintiff alleged defendants told him the

policy would contain a "Private Books and Records" endorsement, but instead

it contained the "Stock Records Clause." Plaintiff alleged after discussing the

policy with Neman, plaintiff believed the private books and records endorsement

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would allow him to file a claim without producing tax returns. Plaintiff also

received a letter from Acosta stating the private books and records endorsement

applied to his policy as of May 22, 2013. 2 In March 2018, plaintiff filed an

affidavit of merit from a licensed New Jersey insurance producer asserting IJU,

Acosta, and Neman's conduct "fell outside the acceptable professional standards

of practice owed to the [p]laintiff."

      In December 2018, the motion judge granted Lloyds summary judgment,

finding plaintiff did not cooperate with its investigation and failed to provide

the information it requested, and therefore Lloyds did not breach its contract

with plaintiff. Plaintiff does not challenge this decision.

      The judge extended discovery, originally set to end on July 24, 2018, to

December 21, 2018, June 25, 2019, and then to September 25, 2019. The

deadline for plaintiff's expert report was extended to July 25, 2019. When

plaintiff did not serve an expert report, defendants moved to bar the report and

testimony from plaintiff's expert. The judge ordered plaintiff to serve expert

reports by September 9, 2019, and barred reports served beyond the deadline.




2
  A certification filed later by Acosta claimed the private books and records
endorsement encapsulates a variety of recordkeeping endorsements, including
the stock records endorsement in plaintiff's policy.
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      Plaintiff did not serve an expert report and defendants moved for summary

judgment, arguing the claims against them could not survive without an expert

to explain to the jury the standard of care, and how defendants departed from it

and proximately caused plaintiff's damages. Defendants also argued the court

should grant summary judgment in their favor because Lloyds denied coverage

due to plaintiff's failure to cooperate and substantiate his losses, which

precluded plaintiff's claims related to the policy endorsements.        Plaintiff

conceded the lack of an expert report barred his professional negligence claims.

However, he argued the misrepresentation, fraud, and CFA claims could proceed

to trial without expert testimony because Lloyds denied coverage due to

plaintiff's failure to produce his tax returns, which Acosta and Neman told him

he did not need not produce in the event of a loss.

      Following oral argument, the motion judge issued a comprehensive

written decision granting defendants' motion. The judge concluded plaintiff's

claim could not be resolved

            absent expert testimony. That is, a person with
            expertise in insurance, particularly jewelers loss
            insurance, would have to explain to the jury not only
            the differences between "Private Books and Records"
            coverage and "Stock Records" coverage but also what
            is required to substantiate; document; and perfect a loss
            under these endorsements. Necessarily, this expert
            would need to explain how the declination by Lloyds

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            would have been obviated if the "Private B[]ooks and
            Records" endorsement was in effect. Such mat[t]ers
            . . . are beyond the ken of the average juror. Townsend
            v. Pierre,  221 N.J. 36, 35 (2015).

Furthermore, the judge concluded plaintiff's fraud and misrepresentation claims

were "outgrowths of the actions taken by . . . defendants in processing the

policy" and required expert testimony "to demonstrate that the procurement of

a [']Stock Records['] endorsement was appropriate or not and relatedly whether

assuming it was inappropriate it was a proximate cause of the denial of coverage

to plaintiff . . . . Deviation standing alone, without expert testimony as to

causation of damage is insufficient."

      We review the grant of summary judgment "in accordance with the same

standard as the motion judge." Globe Motor Co. v. Igdalev,  225 N.J. 469, 479

(2016) (quoting Bhagat v. Bhagat,  217 N.J. 22, 38 (2014)). We must determine

"if 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 . . .

as a matter of law." R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am.,  142 N.J. 520, 540 (1995).

      On appeal, plaintiff argues the judge erred by finding an expert report

necessary to prove defendants violated the CFA and the common law fraud,

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misrepresentation, and unjust enrichment claims. Plaintiff asserts the judge

improperly applied the learned professional exception to the CFA claim. He

argues the judge erroneously concluded defendants' actions were not the

proximate cause of both his damages and the failure to be compensated for the

losses from the robbery.

      Having reviewed the record in detail, we affirm for substantially the same

reasons expressed in the motion judge's written opinion. We add the following

comments.

      Our Supreme Court has stated:

                  In some cases, . . . the "jury is not competent to
            supply the standard by which to measure the
            defendant's conduct," and the plaintiff must instead
            "establish the requisite standard of care and [the
            defendant's] deviation from that standard" by
            "present[ing] reliable expert testimony on the subject."
            This Court has previously explained that, when
            deciding whether expert testimony is necessary, a court
            properly considers "whether the matter to be dealt with
            is so esoteric that jurors of common judgment and
            experience cannot form a valid judgment as to whether
            the conduct of the [defendant] was reasonable." In such
            cases, the jury "would have to speculate without the aid
            of expert testimony."

                  Cases requiring the plaintiff to "advance expert
            testimony establishing an accepted standard of care"
            include "the ordinary dental or medical malpractice
            case." Sanzari[ v. Rosenfeld], 34 N.J. [128,] 134-35
            [(1961)]; accord Bender v. Adelson,  187 N.J. 411, 435

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                                       8
            (2006). In addition, our courts have recognized other
            esoteric subject matters requiring expert testimony,
            such as "the responsibilities and functions of real-estate
            brokers with respect to open-house tours," Hopkins v.
            Fox & Lazo Realtors,  132 N.J. 426, 444 (1993),
            precautions necessary to ensure "the safe conduct of a
            funeral procession," Giantonnio[ v. Taccard], 291 N.J.
            Super. [31,] 44 [(App. Div. 1996)], the appropriate
            "conduct of those teaching karate," Fantini v.
            Alexander,  172 N.J. Super. 105, 108 (App. Div. 1980),
            the proper application of "pertinent skydiving
            guidelines," Dare v. Freefall Adventures, Inc., 349 N.J.
            Super. 205, 215 (App. Div. 2002), and the proper
            "repair and inspection" of an automobile, Ford Motor
            Credit Co. v. Mendola,  427 N.J. Super. 226, 236-37
            (App. Div. 2012).

            [Davis v. Brickman Landscaping, Ltd.,  219 N.J. 395,
            407-08 (2014) (alteration in original) (citations
            omitted).]

We do not consider the standard of care required of defendants as insurance

producers any less esoteric than the professions noted in Davis. Only an expert

can explain to the jury differences between the stock records and private books

and records endorsements and their potential impact on plaintiff's coverage.

Thus, expert testimony was required to show that defendant's alleged wrongful

conduct was a proximate cause of plaintiff's damages.

      We also reject plaintiff's assertion the judge applied the learned

professional exception as a basis to dismiss his CFA claim. The judge's decision

made no mention of the exception. As the judge noted, even if plaintiff could

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prove defendants misrepresented material facts in producing his insurance

policy, establishment of defendants' representations as the proximate cause of

the coverage declination required expert testimony.

      Proximate cause "requires an initial determination of cause-in-fact . . . or

'but for' causation, [which] 'requires proof that the result complained of probably

would not have occurred "but for" the negligent conduct of the defendant.'" New

Gold Equities Corp. v. Jaffe Spindler Co.,  453 N.J. Super. 358, 379 (App. Div.

2018) (internal citation omitted) (quoting Conklin v. Hannoch Weisman,  145 N.J. 395, 417 (1996)). A plaintiff must show a defendant's acts or omissions

were a necessary antecedent of the loss. Ibid. (citing Francis v. United Jersey

Bank,  87 N.J. 15, 39 (1981)).

      As we noted, the declination letter cited plaintiff's "false or fraudulent

statements regarding the loss" as the basis for the decision not to compensate

plaintiff. Lloyds' certified answers to interrogatories reiterated plaintiff's loss

claim would not have been covered regardless of whether the policy contained

a private books and records endorsement because it denied coverage based on

plaintiff's failure to cooperate with the investigation, which had no connection

to defendants' alleged representations regarding the private books and records

endorsement in the policy.


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Affirmed.




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