469_C281

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Homeowner	Fair Plan
Professional Negligence

DECK COLLAPSE TRIGGERS LIABILITY DISPUTE

Ann Silverman Soled owned a beachfront house in Point Pleasant, New Jersey, and obtained homeowners insurance for it through insurance broker York-Jersey Underwriters. Soled died in 1990, and her sons Myron and Malcolm Silverman purchased the property from Soled's estate in 1992. They canceled the CIGNA policy that had been issued to the estate, then purchased a new policy from The Hartford Fire Insurance Company.

The Hartford policy named Myron and Malcolm as insureds. The policy was renewed annually until 1997 when Hartford advised Myron that the coverage would be terminated. Changes in the industry had made it more difficult to obtain insurance for beachfront properties, so on May 20, 1997, the Hartford policy was replaced by York with a FAIR Plan policy issued by the New Jersey Insurance Underwriting Association. This policy did not include personal liability coverage.

Marilyn Raven was the York agent assigned to Myron's account. When a homeowners policy was replaced with a FAIR Plan policy, Raven would typically contact her clients to inform them that the FAIR Plan did not include personal liability coverage.

The FAIR Plan coverage was renewed on an annual basis through 2002. Myron would sign the application and return it to the New Jersey Insurance Underwriting Association. The application stated that the policy did not include liability insurance, but Myron admitted he was very "lackadaisical" about reading the application.

On July 6, 2002, while the house was leased to summer tenants, the outdoor deck on the property collapsed, causing injury to 18 people. Sixteen individuals filed personal injury claims against several defendants, including Myron and Malcolm Silverman. The Silvermans in turn filed a complaint against York-Jersey Underwriters claiming professional negligence.

There was a jury trial. Prior to deliberations, the six-person jury was asked two specific questions: First, whether the Silvermans had proved that York was negligent and, second, whether the Silvermans had proved that such negligence caused them to suffer a loss. The judge instructed the jury on the need to have at least five jurors agree on each interrogatory. As to the order in which to answer the interrogatories, the judge instructed, "If you say no [to Question One] you don't have to proceed any further; you return your verdict. If your answer to Question Number 1 is yes, you'll now go to Question Number 2." Despite this instruction, the jury reported that it could not reach a unanimous decision on the first question and then unanimously answered the second question "no." The judge entered a judgment in favor of York; the Silvermans appealed.

On appeal, the Silvermans argued that the verdict should be reversed because the jury did not comprehend the judge's instructions. They further contended that the jury did not follow the judge's instruction that "if you can't come to a conclusion on Number, 1 you don't go to Number 2." The Superior Court of New Jersey, Appellate Division, disagreed. The court noted that jury instructions are not grounds for reversal unless they are "misleading, confusing, or ambiguous." It then noted that the record supported the conclusion that the jurors were well aware of the importance of having at least five jurors agree on each question. In addition, the court noted that there was nothing that precluded the jury from deciding the second question if it could not reach a conclusion on the first.

The Silvermans next argued that the jury's unanimous decision on the second question was inconsistent with its split answer on the first question. According to the Silvermans, the jury had to decide York was negligent before it could decide whether York's negligence caused harm to the Silvermans. Again, the court disagreed. It stressed that the first question dealt with the issue of fault, while the second dealt with whether York's action caused damage to the Silvermans.

During the trial, Myron Silverman admitted that if he had reviewed the renewal notices' statement that personal liability coverage was not included, he would have contacted his broker. This lack of action on his own part could have contributed to the loss suffered by the Silvermans. Thus, it was not unreasonable for the jury to find that York's conduct was not the cause of the Silvermans' loss.

Next, the Silvermans argued that the court incorrectly barred them from informing the jury that 18 people were injured when the deck collapsed. According to the Silvermans, the jury needed this information to "appreciate the magnitude of liability to which plaintiffs were exposed by renting the house without liability insurance." The court noted that the trial judge had good reasons for excluding that information, namely that it would be "highly prejudicial" to York.

For all of these reasons, the judgment in favor of broker York was affirmed.

Lancos vs. Silverman-Superior Court of New Jersey, Appellate Division-May 14, 2008-946 Atlantic Reporter 2d 1073.