New Jersey Appellate Division’s Recent Decision On The Net Opinion Rule

June 13, 2017 | Professional Liability | Commercial Litigation | Insurance Coverage

The New Jersey Appellate Division, in Satec, Inc. v. The Hanover Insurance Group, Inc., Docket No. A-5103-14T4 (App. Div. June 7, 2017) (approved for publication), addressed New Jersey’s net opinion rule in the context of an insurance broker malpractice claim.  Satec, a distributor of electricity measurement meters, filed suit against its insurance broker (and others) for damages resulting from the insurance broker’s alleged failure to procure flood insurance on its behalf.  The trial court did not reach the merits of Satec’s professional negligence claim.  Rather, it granted the insurance broker’s motion to strike Satec’s expert’s report as inadmissible net opinion and then granted summary judgment in favor of the defendants.

In reaching its decision on the insurance broker’s motion to strike, the Appellate Court noted that the expert had failed to offer objective support for his personal views on the applicable standard of care.  Interestingly, the Appellate Court pointed out that the expert failed to “identify the source of the standard of care enunciated, including decisional law, by which to measure plaintiff’s claimed deficiencies or to determine whether there was a breach of duty . . . .”  [emphasis added].  Experts are often wary of citing cases in their written reports for fear that they are invading the province of the court.  The Appellate Division suggests that it may be incumbent on experts to do so.

The Appellate Division’s statement also raises several questions.  For example, how far must an expert go when citing New Jersey decisional law?  Can an expert cite to a single New Jersey case to support the enunciated standard of care?  If the expert cites to New Jersey cases must the expert also cite to other sources of authority?  Regardless of whether experts cite to one or more New Jersey cases in their written reports, they should be well versed in all New Jersey cases on the applicable standard of care.  Otherwise, they run the risk of being discredited at deposition or trial.

The Appellate Division’s decision is noteworthy for other reasons.  For example, Satec argued that the insurance broker’s breach of the standard of care was obvious, and, as a result, the common knowledge doctrine obviated the need for expert opinion.  The common knowledge doctrine applies where a juror’s common knowledge as a layperson enables the juror to determine a defendant’s liability without the benefit of expert opinion.  The Appellate Court disagreed.  It concluded that expert opinion was necessary to assist the jury “relative to the intricacies of the fiduciary relationship between Satec and its insurance broker.”  According to the Appellate Court, without an expert, Satec could not demonstrate that the insurance broker deviated from the standard of care under the circumstances.

To view the decision, Click Here.

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