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President v. Jenkins2/6/2003
ctive February 1, 1998. In fact, notwithstanding the October 26, 1997, retroactive cancellation date in the final notice dated January 9, 1998, it appears that Princeton had issued a renewal certificate as of December 30, 1997, and issued a bill for a policy beginning February 1, 1998. The January 8 and January 9 notices followed.
I do not believe the motion judge or the majority have adequately considered the import of these facts. While Princeton may indeed have been entitled to cancel the Jenkins' policy for nonpayment, its authority for effecting a retroactive cancellation is not clear to me, and particularly so where the notice of such cancellation does not appear to have been provided until after the incident of January 3-4.
Since Rider v. Lynch, 42 N.J. 465, 476 (1964), our common law has provided increased guidance for fixing the standard of care owed by an insurance broker or agent to an insured as well as a corresponding duty to third parties foreseeably harmed by the absence of coverage for a tortfeasor.
In a negligence case, establishment of the existence and extent of duty owed to a plaintiff is a matter of law to be determined by a court. Burroughs v. City of Atlantic City, 234 N.J. Super. 208, 221 (App. Div.), certif. denied, 117 N.J. 647 (1989). New Jersey courts have recognized that the peculiar circumstances of a case will govern whether liability of an insurance broker or agent can be established without requiring an expert. Bates v. Gambino, 72 N.J. 219, 224-25 (1977); Rider v. Lynch, supra, 421 N.J. at 476; Indus. Dev. Assoc. v. F.T.P., Inc., 248 N.J. Super. 468, 470-71 (App. Div. 1991), aff'd, sub. nom. Indus. Dev. Assoc., Inc. v. Commercial Union Surplus Lines Ins. Co., 127 N.J. 94, 95 (1992). I do not believe an expert is necessary in the circumstances disclosed by the record.
O'Brien, the C&R;representative, admittedly solicited and later convinced Dr. Jenkins to switch to the Zurich claims made policy. There is no indication of a timely oral or written explanation of the effect of the words "retroactive date," which qualify the Zurich policy.
On January 8, 1998, both O'Brien and Dr. Jenkins each knew of the premium payment problem with Princeton. The proofs tend to show, however, that Jenkins did not yet know the Princeton policy would be canceled or terminated earlier than February 1, 1998. However, even if Jenkins was aware of an earlier cancellation date, the record does not establish that he was informed of the meaning and effect of the "retroactive date" qualification. "Retroactive date" is surely not synonymous with "effective date." When asked in his deposition whether he explained to Dr. Jenkins what a retroactive date meant, O'Brien responded: "Yes . . . I told him, 'this is the effective date of coverage,' which is February 1, 1998, the date he requested for coverage."
I do not believe that an expert report is required for a trier of fact to understand that, absent an explanation that incidents occurring prior to the retroactive date are not covered, a lay person could reasonably believe that claims for such incidents made after the effective date of a claims made policy would be covered. O'Brien's explanation did not preclude that possible misapprehension.
Holmes' Appleman on Insurance points up the problem in this case. It states,
In general, claims made means that the claim must be reported during the policy period for it to be covered. Most 'claims made' policies include coverage for actions which occurred before the policy period provided the insured has given a truthful history as asked in the application process. This is known as full prior acts coverage. Some polici
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