Strega Realty Trust, which was operated by Linda Cappuccio, rented property in Salem to Red Lulu Salem for the purpose of Red Lulu operating a restaurant there. However, Red Lulu never opened the restaurant. In 2012 Strega Realty sued Red Lulu. That lawsuit settled, with the provision that Red Lulu would vacate the premises by October 31, 2013.
Red Lulu’s proprietors vandalized the property around the time that they vacated the premises. Cappuccio informed Raymond Kameras, the president of its insurance brokerage, Allan Insurance.
Cappuccio and Kameras discussed filing an insurance claim to recover the damage. They now dispute whether Kameras suggested filing a claim with both Strega Realty’s own policy and with Selective Insurance, Red Lulu’s policy, but Cappuccio notified only Selective. Selective denied coverage because its policy excluded coverage for vandalism committed by its insured.
On November 6, 2015, Cappuccio submitted a claim for the property damage to Public Service. Public Service issued a reservation of rights letter asserting that Cappuccio had failed to notify the company of the loss within two years. The policy also had a vandalism exclusion.
Cappuccio then sued both Public Service and Allan Insurance. In Cappuccio v. Public Service Ins. Co., 2020 WL 4581672 (Mass. Super.), the Essex County Superior Court granted both defendants’ motionis for summary judgment.
Allan Insurance Company’s motion for summary judgment
Insurance broker had no duty to secure specific coverage
The court noted that generally an insurance broker is not under a duty to secure a policy that includes adequate coverage for the insured’s needs – but there are circumstances that might create such a duty. Such circumstances can include a prolonged business relationship, frequent contact between the broker and the insured, and a broker’s advice with respect to the complexity of the policies. The court held that no special circumstances existed between Cappuccio and Allan Insurance. They had a new business relationship, there were no complex issues with respect to the coverage she wanted to purchase, and they did not have an in-depth discussion. Cappuccio told Allan Insurance she wanted to renew her policy, and Allan Insurance did so.
Cappuccio pointed to statements on Allan Insurance’s website setting forth that its agents were experts and would provide the best policy to fit the customer’s individual needs. The court held that Cappuccio had offered no evidence that she relied on such statements or was even aware of them.
The court also held that Cappuccio had offered no evidence of breach of duty. She did not establish that Allan Insurance could have secured a policy for her that would have covered acts of vandalism by a tenant.