Yablonsky v. Encompass Ins. Co. of N.J., DOCKET NO. A-2938-17T3

CourtNew Jersey Superior Court – Appellate Division
Writing for the CourtNUGENT, J.A.D.
PartiesDANIEL M. YABLONSKY, Plaintiff-Appellant, v. ENCOMPASS INSURANCE COMPANY OF NEW JERSEY, ANGELO LOBOSCO and LOBOSCO INSURANCE GROUP, LLC, Defendant-Respondents. DANIEL M. YABLONSKY, Plaintiff, v. ENCOMPASS INSURANCE COMPANY OF NEW JERSEY, Defendant-Respondent, and ANGELO LOBOSCO and LOBOSCO INSURANCE GROUP, LLC, Defendants-Appellants.
Decision Date24 December 2019
Docket NumberDOCKET NO. A-2938-17T3,DOCKET NO. A-3099-17T3

DANIEL M. YABLONSKY, Plaintiff-Appellant,
v.
ENCOMPASS INSURANCE COMPANY OF NEW JERSEY, ANGELO LOBOSCO
and LOBOSCO INSURANCE GROUP, LLC, Defendant-Respondents.


DANIEL M. YABLONSKY, Plaintiff,
v.
ENCOMPASS INSURANCE COMPANY OF NEW JERSEY, Defendant-Respondent,
and
ANGELO LOBOSCO
and LOBOSCO INSURANCE GROUP, LLC, Defendants-Appellants.

DOCKET NO. A-2938-17T3
DOCKET NO.
A-3099-17T3

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

Argued May 8, 2019
December 24, 2019


NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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.

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Before Judges Alvarez, Nugent and Mawla.

On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1974-14.

Francis X. Garrity and Thomas D. Flinn argued the cause for appellant Daniel M. Yablonsky in A-2938-17 (Garrity Graham Murphy Garofalo & Flinn, attorneys; Francis X. Garrity and Thomas D. Flinn, of counsel; Jane G. Glass, on the briefs).

Syed S. Ahmad (Hunton Andrews Kurth, LLP) of the District of Columbia and Virginia bars, admitted pro hac vice, argued the cause for appellants Angelo Lobosco and Lobosco Insurance Group in A-3099-17 and respondents Angelo Lobosco and Lobosco Insurance Company in A-2938-17 (Sullivan & Klein, LLP, and Syed S. Ahmad, attorneys; Frederick Miles Klein, Syed S. Ahmad, and Geoffrey B. Fehling (Hunton Andrews Kurth, LLP) of the District of Columbia and Pennsylvania bars, admitted pro hac vice, on the briefs).

Richard J. Mirra argued the cause for respondent Encompass Insurance Company of New Jersey (Hoagland Longo Moran Dunst & Doukas, attorneys; Richard J. Mirra, of counsel and on the briefs).

The opinion of the court was delivered by

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NUGENT, J.A.D.

These appeals, which we consolidate for this opinion, center around plaintiff Daniel M. Yablonsky's claim that his parents' automobile insurance policy should have included $1,000,000 in excess underinsured motorist (UIM) coverage on the date Daniel was injured in an accident involving a motor vehicle. In No. A-2938-17, Daniel appeals both the summary judgment dismissal of his claim that the trial court should have construed his parents' insurance policy to provide $1,000,000 excess UIM coverage and the involuntary dismissal at trial of his professional negligence claim against his parents' insurance producer for failing to inform them excess UIM coverage was available. In No. A-3099-17, Daniel's parents' insurance producer appeals the summary judgment dismissal of its contractual indemnification claim against the insurance company that issued the automobile insurance policy to Daniel's parents.

We must decide three issues on these two appeals. First, we must decide whether Daniel's parents' insurance policy should be construed to provide excess UIM coverage due to an alleged ambiguity in its coverage summary, even though Daniel's father, who purchased the policy, knew the policy did not include excess UIM coverage. Given the father's undisputed knowledge the

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policy did not provide excess UIM coverage, we decline to construe the policy to provide it.

Next, we must decide whether the trial court erred by dismissing at the close of Daniel's proofs at trial his professional negligence claim against his father's insurance producer for failing to inform his parents of the availability of excess UIM coverage when such coverage became available. We conclude Daniel established a prima facie case of professional negligence that should have been submitted to the jury.

Last, we must decide whether the trial court erred by dismissing on summary judgment the insurance producer's contractual indemnification claim against the company that issued the insurance policy to Daniel's parents. We conclude the plain and unambiguous terms of the contractual indemnification clause preclude indemnification and the trial court did not err in so finding.

I. Background and Procedural History.

Daniel possessed a valid driver's license, but was riding a bicycle on May 13, 2012, when he was struck by a Jeep insured under a policy with $15,000 liability limits. For purposes of this appeal only, there is no serious dispute that the compensable value of Daniel's injuries equals or exceeds $1,250,000. Daniel collected the tortfeasor's $15,000 liability limits. He also collected the balance

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of the $250,000 UIM limits he was entitled to collect under his parents' insurance policy, which covered Daniel and the vehicle he owned. His parents had purchased the policy, an Encompass Insurance Co. of NJ (Encompass) USP Elite-Package (Encompass Policy), through defendants Angelo Lobosco (Mr. Lobosco) and Lobosco Insurance Group, LLC (Lobosco Group). The Encompass Policy included motor vehicle, homeowners, fire, and personal umbrella coverage, but no UIM or uninsured (UM) umbrella coverage.

In May 2014, Daniel filed a three-count complaint against the Lobosco defendants and alleged causes of action for negligence, breach of contract, and breach of fiduciary duty. Daniel based his claims on these defendants' failure to inform his parents that excess UIM and UM coverage had become available. The following month, Daniel filed an amended four-count complaint.

The amended complaint's first count, which stated a cause of action against Encompass for breach of contract, alleged the Encompass Policy in effect when Daniel was struck by the Jeep included a coverage summary that suggested the policy included $1,000,000 of Personal Umbrella UIM coverage. Daniel sought a declaration that he was afforded $1,250,000 under the Encompass Policy. The remaining three counts, against the Lobosco defendants

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but not Encompass, repeated the causes of action pled against the Lobosco defendants in the original complaint.

After Daniel filed his amended complaint, the Lobosco defendants filed an answer with affirmative defenses. Thereafter, they amended their answer and included, among other things, a cross-claim for contractual indemnification against Encompass.

Following discovery and some motion practice not relevant to this appeal, all the parties moved for summary judgment. The trial court denied Daniel's motion, granted Encompass's motion, and granted the Lobosco defendants' motion in part. The court dismissed Daniel's claims against the Lobosco defendants for breach of contract and breach of fiduciary duty but denied the Lobosco defendants' motion to dismiss the professional negligence claim. The court also denied the Lobosco defendants summary judgment on their contractual indemnification claim.

During the ensuing trial, following the close of Daniel's case, the Lobosco defendants moved for, and the court granted, an involuntary dismissal of Daniel's remaining claim. The court denied Daniel's motion for reconsideration. Daniel filed this appeal.

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Following the trial, the Lobosco defendants renewed their summary judgment motion seeking contractual indemnification from Encompass. Encompass cross-moved for summary judgment. The trial court denied the Lobosco defendants' motion and granted Encompass's motion. The Lobosco defendants appealed from the ensuing order.

II. The Motion and Trial Records.

For purposes of the summary judgment motions and the motion for involuntary dismissal at trial, the parties did not seriously dispute that the Jeep's driver caused the accident, Daniel was entitled to UIM coverage under his parents' Encompass Policy, and the compensable value of Daniel's injuries exceeded $250,000. Daniel and Encompass sharply disputed the clarity of the Encompass Policy, the Lobosco defendants denied any wrongful conduct, and Encompass disputed it was required to indemnify the Lobosco defendants under the terms of the indemnification provision of the Lobosco-Encompass agency agreement.

A. The Encompass Policy.

The Encompass Policy, entitled "USP Elite-Package," renewed on December 19, 2011, expired on December 19, 2012, and was in effect when Daniel's accident occurred in May 2012. The policy included a nine-page

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"Renewal Policy Coverage Summary" (Coverage Summary) and 170 pages of terms and conditions. The Coverage Summary section entitled "Motor Vehicle Protection" identified four vehicles and provided an overview of the coverage for each, including the coverage limits and premiums. The parties do not dispute that each vehicle was insured for UM and UIM coverage with split limits of $250,000 per person, $500,000 per accident.

The Coverage Summary included a section entitled "Personal Umbrella Coverage," which stated:

PERSONAL UMBRELLA COVERAGE (Coverage applies only if a premium or limit is shown)

COVERAGES
PERSONAL UMBRELLA COVERAGE: applies to all "covered exposures" and "additional covered exposures"

The Personal Umbrella Coverage Summary section showed coverage of $1,000,000 and specified the "Minimum Retained Limit" the insured was required to maintain in underlying insurance: a combined single limit of $500,000 each accident or a split basis limit of $250,000 bodily injury each person, $500,000 bodily injury each accident, and $100,000 property damage each accident. The Personal Umbrella Coverage Summary section also

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specified the premium for the coverage. The terms "covered exposures" and "additional covered exposures" were undefined.

The Coverage Summary ended with a statement that the policy was subject to "the following forms and endorsements" and was followed by thirty-five forms and endorsements. The "Personal Umbrella Coverage Endorsement-New Jersey" expressly excluded UM and UIM benefits.

Representatives of Encompass and its parent company conceded during depositions that someone reading the Coverage Summary would also have to read the policy endorsements to understand that umbrella coverage was provided for liability, but not UM or UIM claims. In 2014,...

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