LOYLE, LLC VS. GREATER NEW YORK MUTUAL INSURANCECOMPANY(L-0669-11, CUMBERLAND COUNTY AND STATEWIDE) ( 2017 )


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                          APPROVAL OF THE APPELLATE DIVISION
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             parties in the case and its use in other cases is limited. R.1:36-3.
    
    
    
                                           SUPERIOR COURT OF NEW JERSEY
                                           APPELLATE DIVISION
                                           DOCKET NO. A-2221-15T4
    
    LOYLE, LLC and ELYOL, INC.,
    t/a LOYLE LANES BOWLING CENTER,
    
            Plaintiffs-Respondents,
    
    v.
    
    GREATER NEW YORK MUTUAL
    INSURANCE COMPANY,
    
            Defendant-Respondent,
    
    and
    
    BROUWER, HANSEN & IZDEBSKI
    ASSOCIATES, and JOHN H. IZDEBSKI,
    INC.,
    
            Defendants/Third-Party
            Plaintiffs-Appellants,
    
    v.
    
    GREATER NEW YORK MUTUAL
    INSURANCE COMPANY,
    
            Third-Party Defendant-
            Respondent.
    
                  Argued December 20, 2016 - Decided September 5, 2017
    
                  Before Judges Ostrer, Leone and Vernoia.
             On appeal from the Superior Court of New
             Jersey, Law Division, Cumberland County,
             Docket No. L-0669-11.
    
             Patricia M. Henrich argued the cause for
             appellants  (Reilly,  Janiczek,  McDevitt,
             Henrich & Cholden, P.C., attorneys; Ms.
             Henrich and Michelle B. Cappuccio, on the
             briefs).
    
             Michael R. Perle and Raffi Momjian argued
             the cause for respondents Loyle, LLC and
             Elyol, Inc. (Raffi Momjian PC, attorneys;
             Mr. Perle, of counsel; Mr. Perle and Mr.
             Momjian, on the brief).
    
             Allan   Maitlin   argued   the   cause   for
             respondent Greater New York Mutual Insurance
             Company (Sachs, Maitlin, Fleming & Greene,
             attorneys; Mr. Maitlin, of counsel; Mr.
             Maitlin and Christopher Klabonski, on the
             brief).
    
    PER CURIAM
    
        Following     a   2010   arson   fire   that   destroyed   the   bowling
    
    alley they owned and operated, plaintiffs discovered they were
    
    underinsured for the property and business interruption losses
    
    they sustained.
    
        In this action, plaintiffs claimed their insurance broker,
    
    defendant Brouwer, Hansen & Izdebski, Inc. (BHI), negligently
    
    advised them concerning the insurance coverage limits required
    
    to replace the bowling alley building and its contents in the
    
    event of a total loss and to reimburse plaintiffs for losses due
    
    to business interruption. The matter proceeded to trial and the
    
    
                                         2                               A-2221-15T4
    jury agreed, resulting in the entry of a $1,998,808.77 judgment
    
    against BHI.1
    
         On appeal, BHI claims the trial court erred by: permitting
    
    plaintiffs    to   introduce   testimony   and   evidence   based    on   two
    
    documents that were not produced during discovery, and denying
    
    BHI's mistrial motion and motion for a new trial based on the
    
    admission of such testimony and evidence; granting plaintiffs'
    
    in limine motion to bar application of comparative negligence;
    
    granting the insurance carrier's motion for summary judgment;
    
    determining the judgment credits to which BHI was entitled; and
    
    misinforming the jury about the burden of proof. Based on our
    
    review of the record, we are not persuaded by BHI's contentions
    
    and affirm.
    
                                        I.
    
         A.   Background
    
         On January 11, 2010, an arson fire destroyed Loyle Lanes
    
    Bowling Center (the bowling center), resulting in a total loss
    
    of the building and its contents. At the time of the fire, the
    
    
    1
      The jury found plaintiffs' losses from the destruction of the
    bowling alley were $6,840,000. The $1,998,808.77 damage award
    against BHI represents plaintiffs' net loss after deducting
    credits based on plaintiffs' receipt of payments from their
    insurance carrier and monies from other parties. The calculation
    of judgment credits is one of the issues on appeal discussed
    later.
    
    
                                       3                                A-2221-15T4
    bowling center was insured under a policy with Greater New York
    
    Mutual Insurance Company (GNY) that became effective on April 1,
    
    2009    (2009      policy).    The    policy         provided     replacement          cost
    
    coverage     for     the    building       with       a   limit      of        $3,425,000,
    
    replacement cost coverage for the building's contents with a
    
    limit of $200,000, and business interruption coverage with a
    
    limit of $400,000.
    
           An appraisal conducted after the fire, however, revealed
    
    that the building's actual replacement cost was $6,395,247.32,
    
    and the replacement costs of the contents exceeded the policy
    
    limits. GNY paid plaintiffs the full payment of the coverage
    
    limits under the policy, together with adjustments, for a total
    
    of $4,070,000.
    
           Plaintiffs and GNY Enter Into a Litigation Agreement
    
           In   March    2011,     plaintiffs           entered   into        an     agreement
    
    (litigation agreement) with GNY to pursue litigation related to
    
    the losses resulting from the fire. The litigation agreement
    
    states that "GNY [] paid [plaintiffs] the full amount of its
    
    coverages" under plaintiffs' policy, which, after adjustments,
    
    totaled $4,070,000, but that "losses in excess of the GNY policy
    
    limits" remained. Plaintiffs and GNY agreed to sue "any and all
    
    persons     or   entities     that   may       be   responsible    for         causing    or
    
    contributing to the fire loss."
    
                                               4                                      A-2221-15T4
           The litigation agreement provided that GNY would "institute
    
    suit   on   behalf    of    itself   by       way    of   subrogation,"      and   that
    
    plaintiffs    would    institute      separate            litigation   "to    recover
    
    monies for the damages sustained . . . in excess of the amounts
    
    paid by GNY." GNY agreed to incur all litigation costs and that
    
    any recoveries, "whether by way of settlement or judgment, with
    
    respect to the lawsuit brought by GNY . . . [would] be shared
    
    equally between [plaintiffs] and GNY." Plaintiffs and GNY agreed
    
    that plaintiffs would retain all monies they recovered in their
    
    malpractice action against BHI.
    
           The Lawsuits Filed by Plaintiffs and GNY, and BHI's Third-
           Party Complaint Against GNY
    
           In July 2011, GNY filed suit asserting subrogation rights
    
    for plaintiffs' losses against the individuals alleged to have
    
    set the fire and their employers,2 as well as Steven L. Holt,
    
    Safe & Sound Security and Telecommunication (Safe & Sound), and
    
    S.S.    Sprinkler     Co.    (S.S.   Sprinkler).3           The   former     provided
    
    security    alarm    system    services        and    the    latter    provided     the
    
    sprinkler system for the bowling center.
    
    
    2
      It was determined the fire was set by individuals affiliated
    with a competitor of the bowling center, and those individuals
    were criminally prosecuted.
    3
      The complaint was filed in the name of Strathmore Insurance
    Company, an affiliate of GNY.
    
    
                                              5                                   A-2221-15T4
        Plaintiffs filed a separate complaint alleging insurance
    
    broker malpractice against BHI, claiming BHI negligently advised
    
    plaintiffs    concerning   the      amount     of    insurance    required         to
    
    provide replacement cost coverage for a complete loss of the
    
    bowling   center   building   and    its     contents    and,    as   a    result,
    
    plaintiffs'     2009   policy    had       grossly      deficient     coverage.
    
    Plaintiffs also asserted negligence claims against Safe & Sound
    
    and S.S. Sprinkler.
    
        BHI answered plaintiffs' complaint, generally denying the
    
    allegations and asserting affirmative defenses and cross-claims
    
    against its codefendants for contribution and indemnification.
    
    In March 2012, the court granted BHI's motion to consolidate
    
    plaintiffs' and GNY's cases.
    
        A month later, plaintiffs and GNY released their respective
    
    claims against Safe & Sound and S.S. Sprinkler. Plaintiffs and
    
    GNY each received $500,000 from Safe & Sound and $450,000 from
    
    S.S. Sprinkler. Safe & Sound and S.S. Sprinkler were dismissed
    
    from the consolidated lawsuits.
    
        Two years later, in April 2014, BHI was granted leave to
    
    file a third-party complaint against GNY for indemnification and
    
    contribution.    BHI   alleged   GNY     was   obligated    under     an     agency
    
    agreement to indemnify BHI from any civil liability arising out
    
    of GNY's negligence "in processing or handling business placed
    
                                         6                                     A-2221-15T4
    by   [BHI]       with   GNY."   BHI    also      alleged    GNY     conducted         annual
    
    inspections        to   determine      the       appropriate       replacement           cost
    
    coverage limits for the bowling center building, that GNY had a
    
    duty to establish adequate annual policy limits, and that GNY
    
    breached its duty by undervaluing the full replacement costs of
    
    the building.
    
          On May 16, 2014, plaintiffs amended their complaint adding
    
    negligence        claims   against     GNY       and     dismissing      their        claims
    
    against all of the remaining defendants except BHI. Plaintiffs
    
    subsequently dismissed their claims against GNY.
    
          The Court Grants Summary Judgment                      and    Dismisses          BHI's
          Third-Party Complaint Against GNY
    
          GNY filed a summary judgment motion seeking dismissal of
    
    BHI's   third-party        complaint.       On    August    14,    2015,      the     motion
    
    court issued a detailed written decision and entered an order
    
    granting GNY's motion for summary judgment and dismissing BHI's
    
    third-party complaint with prejudice. The court found GNY had
    
    neither      a    contractual    nor    a       common    law     duty   to    establish
    
    coverage limits sufficient for the full replacement costs for
    
    the bowling center, or to indemnify BHI for its negligence.
    
          Plaintiffs' Negligence Claim Against BHI – Pretrial Rulings
    
          As a result of the court's dismissal of BHI's third-party
    
    complaint against GNY, the only remaining claim for trial was
    
    
                                                7                                       A-2221-15T4
    plaintiffs' insurance malpractice claim against BHI. In advance
    
    of trial, plaintiffs moved to bar BHI from presenting evidence
    
    of comparative negligence against plaintiffs, arguing BHI waived
    
    the defense by failing to plead it in its answer. BHI admitted
    
    it failed to plead comparative negligence but argued plaintiffs
    
    were on notice it would pursue a comparative negligence defense
    
    based on BHI's answers to interrogatories and expert reports.
    
        The trial court found BHI waived the right to pursue a
    
    comparative negligence defense by failing to raise it in its
    
    pleadings   in    accordance   with   Rule    4:5-4.   The    court   rejected
    
    BHI's argument that plaintiffs were on notice that comparative
    
    negligence would be at issue. However, the court ruled that BHI
    
    could   present     evidence    showing      plaintiffs      had   "the    best
    
    knowledge and ability to determine [policy] limits" as relevant
    
    to proximate causation.
    
        BHI also moved in limine for an order permitting it to
    
    introduce evidence showing plaintiffs received $4,070,000 from
    
    GNY, and plaintiffs and GNY received a total of $1,900,000 from
    
    Safe & Sound and S.S. Sprinkler. Plaintiffs were entitled to the
    
    replacement costs under the policy only if they undertook to
    
    
    
    
                                          8                               A-2221-15T4
    rebuild the bowling center.4 BHI sought to introduce evidence
    
    showing plaintiffs received settlement funds and could afford to
    
    rebuild the bowling center but opted not to do so. Plaintiffs
    
    intended to introduce evidence showing that because of BHI's
    
    negligence,      they   received       insurance     proceeds        that    were
    
    insufficient to fund the rebuilding of the bowling center.
    
          The    court   granted   BHI's     motion    to    introduce     evidence
    
    showing the funds plaintiffs received from GNY and the other
    
    tortfeasors but denied BHI's request to inform the jury about
    
    the   $950,000    GNY   received   from    by     Safe   &   Sound    and    S.S.
    
    Sprinkler.
    
          B.    The Trial
    
          The record developed at trial showed that brothers Charles
    
    and John Loyle opened the bowling center in 1970. Charles,5 John,
    
    and the Loyle family, including Charles's son, Michael, operated
    
    the bowling center thereafter.
    
    4
      Under the GNY policy, plaintiffs were entitled to receive
    replacement costs if they rebuilt the bowling center, and only
    actual costs if they did not rebuild. Generally, the amount of
    actual costs would be less than replacement costs because actual
    costs are calculated based on the actual cost of the building
    and contents less applicable amounts for depreciation.    On the
    other hand, replacement costs are calculated on the cost of
    replacing the building and its contents following a loss.
    5
      Because this case involves multiple members of the Loyle
    family, we use first names for ease of reference. We intend no
    disrespect in doing so.
    
    
                                        9                                   A-2221-15T4
        A BHI employee, broker David Stanton, sold plaintiffs the
    
    2009 policy. In their complaint, plaintiffs alleged that BHI,
    
    through Stanton, negligently provided erroneous advice that the
    
    2009 policy limits were sufficient to cover the full replacement
    
    cost of the bowling center building and its contents in the
    
    event of a total loss.
    
        Although   plaintiffs'     negligence     claim   is   founded    on   the
    
    lack of sufficient insurance coverage under the 2009 policy, the
    
    parties presented evidence at trial concerning the GNY policies
    
    plaintiffs purchased through Stanton and BHI from 1998 to 2009.
    
    Many of BHI's arguments on appeal are premised on the court's
    
    rulings   concerning   evidence    about     the   1998    policy,   and     we
    
    therefore summarize the testimony and evidence pertinent to the
    
    judge's rulings concerning evidence of the 1998 policy that are
    
    challenged on appeal.
    
        Charles's Testimony and the 1998 Notes
    
        Charles    was   the   first   witness   to    testify   at   trial.     He
    
    explained his interactions with Stanton concerning plaintiffs'
    
    first purchase of a GNY policy in 1998. The policy was effective
    
    April 1, 1998 to April 1, 1999, and provided replacement cost
    
    coverage for the building with a limit of $2,300,000, personal
    
    property insurance that covered the building's contents with a
    
    limit of $200,000, and business interruption insurance with a
    
                                       10                                A-2221-15T4
    limit of $400,000.
    
           Charles testified that after purchasing the 1998 policy,
    
    plaintiffs obtained an appraisal of the bowling center from the
    
    Thompson-Loyle Company, Inc., a company owned in part by his
    
    nephew.      The   appraisal    was    memorialized    in   a   report    that
    
    estimated the bowling center's building and contents replacement
    
    costs to be $3,650,000.
    
           Charles was asked if he provided Stanton with a copy of the
    
    Thompson-Loyle appraisal report. Charles responded that based on
    
    his "internal notes," he believed he gave Stanton a copy of the
    
    report during a September 1998 meeting. Charles then said, "I
    
    checked my notes this morning." BHI's counsel objected, arguing
    
    plaintiffs had not produced any notes concerning the September
    
    1998 meeting during discovery and that Charles should not be
    
    permitted to rely upon whatever notes he reviewed to refresh his
    
    recollection about the meeting.
    
           The court conducted an N.J.R.E. 104 hearing concerning the
    
    late production of the 1998 notes. Charles, then eighty-eight
    
    years old, testified that the 1998 notes were salvaged from the
    
    fire and kept at his residence. He could not recall if he had
    
    sent   the    1998   notes     to   BHI's   counsel.   Plaintiffs'   counsel
    
    represented that the notes were not previously provided to him.
    
           Charles stated he had other records with him in court that
    
                                          11                             A-2221-15T4
    he   reviewed      prior     to     his    testimony.        He     also   said    he    had
    
    additional records at his home that he reviewed in anticipation
    
    of testifying. The court adjourned the proceedings to permit
    
    counsel's review of the records Charles had in court and to
    
    permit Charles to retrieve and provide counsel with the other
    
    records     from      his   home.    All    of       the    notes    and   records      were
    
    provided to counsel that day.
    
          The next day, after reviewing the notes and records, BHI's
    
    counsel requested that Charles be precluded from referring to or
    
    testifying about two notes concerning his 1998 meetings with
    
    Stanton. Counsel also requested that the jury be instructed to
    
    disregard Charles's testimony from the previous day about the
    
    notes.    BHI    argued     the     failure      to    produce       the   notes     during
    
    discovery prejudiced BHI because their production during trial
    
    constituted unfair surprise, impacted counsel's trial strategy
    
    including       her    opening      statement,         and     improperly        bolstered
    
    Charles's credibility.
    
          The     court    overruled      BHI's      objection        and   determined      that
    
    based    on     Charles's     testimony         at    the    N.J.R.E.      104    hearing,
    
    Charles did not intend "to deceive" anyone by failing to produce
    
    the 1998 notes, and plaintiffs' reliance on the 1998 notes would
    
    not "substantial[ly] change . . . the theory of the case." The
    
    court concluded that any prejudice to BHI could be remedied by
    
                                               12                                      A-2221-15T4
    permitting counsel to take Charles's deposition.
    
           The court rejected BHI's request to depose Michael Loyle,
    
    but Michael was in court, and provided sworn testimony outside
    
    the presence of the jury that he never saw the notes prior to
    
    trial. There was no evidence Michael was present during the
    
    September 1998 meeting between Charles and Stanton. The court
    
    also   initially    denied   BHI's   request    to    re-depose   plaintiffs'
    
    expert William C. Stewart, Jr. concerning the notes. The trial
    
    was    paused     and   BHI's   counsel      took     Charles's    deposition
    
    concerning the notes that day.
    
           The trial resumed and Charles testified that the 1998 notes
    
    refreshed   his    recollection      about   conversations    he    had   with
    
    Stanton concerning plaintiffs' first GNY policy. Based on the
    
    information contained in the first note, Charles testified that
    
    he met with Stanton in September 1998 and provided Stanton with
    
    the    Thompson-Loyle     appraisal       report,    which   estimated     the
    
    insurable value of the bowling center building was $2,160,415,
    
    and the replacement cost of equipment                was $1,540,000, for a
    
    total insurable value of $3,650,000 after adjustments.
    
           Charles testified that the note concerning the September
    
    1998 meeting refreshed his recollection that he gave Stanton a
    
    copy of the appraisal, but that Stanton calculated a replacement
    
    cost for the building at $2,145,750, based on an estimated cost
    
                                         13                              A-2221-15T4
    of $75 per square foot multiplied by the 28,610 square footage
    
    of the center.6 Stanton also estimated the replacement value of
    
    the equipment was $960,000, based on a calculation of $30,000
    
    for each of the center's thirty-two bowling lanes. According to
    
    Charles, the equipment valuation was rounded up to $1,000,000,
    
    and therefore Stanton's total replacement cost valuation for the
    
    building and its contents was $3,145,750. Stanton applied an
    
    eighty-percent coinsurance factor7 to the total valuation, which
    
    
    6
      The building valuation Charles attributes to Stanton was only
    $15,000 less than the valuation of the building in the Thompson-
    Loyle appraisal report. Approximately $485,000 of the $500,000
    difference between the appraisal and Stanton's valuation is
    attributable to the values assigned by each to replacement costs
    for the building's contents.
    7
      As later explained by plaintiffs' expert, William C. Stewart,
    Jr., coinsurance rates require an insured to carry a policy
    limit equal to or above a specified percentage of the total
    replacement value of the property insured. A failure to carry a
    policy limit at the required percentage results in a penalty to
    an insured for a claim for less than a total loss. For example,
    where an eighty-percent coinsurance rate applies and a property
    is worth $200,000, the insurance policy must have a limit of at
    least $160,000 for the insured to collect 100 percent of any
    partial loss from the insurer. If the insured carries only a
    $120,000 limit, and suffers a $10,000 loss, the insurance
    company pays the insured only $7500 because $120,000 is only
    three-quarters of $160,000. The remaining $2500 of the loss
    would be borne by the insured because the policy limit was not
    eighty percent of the property's replacement value. The amount
    of the coinsurance percentage is not directly an issue in this
    case because there was a total loss. However, an accurate
    valuation of the replacement cost of the insured property is
    essential to ensure that after the coinsurance rate is applied,
    the insured can collect 100 percent for a partial loss claim.
    
    
                                 14                         A-2221-15T4
    resulted in an insurance requirement of $2,516,600, and Stanton
    
    recommended that Charles purchase insurance with a $2,700,000
    
    limit. Charles asked Stanton to forward a letter recommending an
    
    increase in the coverage from plaintiffs' then-current coverage
    
    of $2,300,000 to $2,700,000, but he never received the letter.
    
          Charles also testified concerning a second note he used to
    
    refresh his recollection that on October 1, 1998, he received a
    
    notice changing the policy limits to $2,800,000, instead of the
    
    $2,700,000 he had discussed with Stanton. He called Stanton's
    
    office and left a message requesting that Stanton send a letter
    
    recommending    an    increase    in    the   coverage   to   the   $2,800,000
    
    amount in the notice.
    
          Thus, the GNY policy plaintiffs first purchased through BHI
    
    in April 1998 was amended effective November 1998 to increase
    
    the building coverage from $2,300,000 to $2,800,000. The amended
    
    policy did not, however, alter the $200,000 coverage limit for
    
    the   building's     contents    and   the    $400,000   coverage   limit   for
    
    business income.
    
          Charles testified to matters beyond those based on the 1998
    
    notes.   He   explained   the    GNY    insurance   policy    was   thereafter
    
    renewed annually through Stanton and BHI until the fire occurred
    
    in 2010. According to Charles, each March plaintiffs and Stanton
    
    discussed the annual policy renewal. Charles stated the initial
    
                                           15                             A-2221-15T4
    "[$]2,800,000   [building]    coverage      existed   for    three      years,"
    
    following   1998,   then   increased   to   $3,120,000      for   the     policy
    
    period of April 1, 2002 to April 1, 2003.
    
        In March 2003, plaintiffs transferred $537,000 in bowling
    
    equipment from Loyle, LLC, to Elyol, Inc.8 Charles drafted a
    
    letter to Stanton dated March 20, 2003, explaining the equipment
    
    transfer and asking if the contents coverage should be increased
    
    from $200,000 to $600,000. Before Charles had a chance to mail
    
    the letter, Stanton visited the bowling center and the parties
    
    discussed the issue.
    
        During their March 2003 meeting, Charles again took notes
    
    memorializing his conversation with Stanton.9 Charles testified
    
    that according to his March 2003 notes, Stanton advised Charles
    
    there was no need to increase the contents coverage based on the
    
    equipment transfer. Stanton explained that all of the bowling
    
    equipment was considered part of the building and therefore was
    
    covered under the building coverage.
    
        Following the March 2003 meeting, plaintiffs renewed their
    
    insurance coverage for the April 1, 2003 to April 1, 2004 policy
    
    8
      Charles explained that Loyle, LLC owned the bowling center real
    estate and Elyol, Inc. was the bowling center's operating
    company.
    9
      The March 2003 notes were produced in discovery and were not
    the subject of any objections at trial.
    
    
                                     16                                     A-2221-15T4
    period. The building coverage limit was increased to $3,425,000,
    
    but the $200,000 coverage limit for the building's contents and
    
    the $400,000 coverage limit for business income remained the
    
    same. Following the changes to the 2003 policy, none of the
    
    coverage    limits     were    adjusted   during    any    of     the   subsequent
    
    annual policy renewals preceding the 2010 fire.
    
        In 2008, plaintiffs invested $431,000 in renovations to the
    
    bowling center. Michael testified that in March 2009, he showed
    
    Stanton the renovations and asked if they needed more insurance.
    
    According to Michael, Stanton said no additional insurance was
    
    required     because     the    renovations     simply     replaced       existing
    
    fixtures in the bowling center. Michael explained that he relied
    
    on Stanton's advice because Stanton was the insurance expert.
    
        Plaintiffs' Expert
    
        Plaintiffs presented the testimony of William C. Stewart,
    
    Jr., an expert on insurance producer and broker conduct. During
    
    voir dire, Stewart explained that he reviewed the transcript of
    
    Charles's     mid-trial       deposition.   BHI's      counsel      objected      to
    
    Stewart     testifying    concerning      the   1998      notes    or   Charles's
    
    deposition testimony, arguing that the court did not allow her
    
    to re-depose Stewart after Charles disclosed the existence of
    
    the notes, and that any opinion Stewart might have about the
    
    notes would constitute an unfair surprise. The court excused the
    
                                         17                                   A-2221-15T4
    jury to conduct an N.J.R.E. 104 hearing.
    
           Stewart    testified       during        the    hearing     that        based      on   his
    
    review     of    the    1998     notes,        he     believed     Stanton             wrongfully
    
    discounted the Loyle-Thompson appraisal valuing the building at
    
    "3.6    million"       in   favor      of      his    personal        appraisal          of    "2.7
    
    million."       Stewart        noted    that         Stanton     is      not       a    licensed
    
    appraiser. He opined:
    
                [I]t was incorrect advice for [] Stanton to
                recommend [$]2.7 million in coverage because
                if you accepted the $3.6 million appraisal,
                [eighty] percent . . . would have been
                [$]2.88   million.  .   .  .   Stanton  was,
                therefore, recommending underinsurance and a
                coinsurance penalty because the property
                would have not been insured to [eighty]
                percent of its value.
    
           The court ruled BHI's counsel could use Stewart's N.J.R.E.
    
    104 hearing testimony during her cross-examination of Stewart.
    
    The judge also offered BHI's counsel the opportunity to depose
    
    Stewart at plaintiffs' cost. BHI chose not to depose Stewart,
    
    and the trial resumed.
    
           Stewart's       trial    testimony        concerning        the      1998       notes   was
    
    consistent with his N.J.R.E. 104 hearing testimony. He opined
    
    that Stanton's recommendation that plaintiffs increase building
    
    coverage    to    $2,700,000        was     at       odds   with      the    Thompson-Loyle
    
    appraisal valuation of the building at $3,650,000, and resulted
    
    in     coverage    insufficient           to     satisfy       GNY's        eighty       percent
    
                                                18                                           A-2221-15T4
    coinsurance requirement. He stated that the 1998 amended policy
    
    raising the insurance coverage from $2,300,000 to $2,800,000 did
    
    not   satisfy     the     eighty    percent            coinsurance       requirement.         On
    
    cross-examination, Stewart admitted that the 1998 notes did not
    
    specify that Stanton actually "recommended" anything.
    
          Stewart testified concerning Stanton's advice to Charles
    
    during the parties' March 2003 meeting. He opined that Stanton's
    
    advice that plaintiffs did not need to increase their contents
    
    coverage from $200,000 to $600,000, despite plaintiffs' $537,000
    
    equipment     transfer,          was        "absolutely          incorrect."          Stewart
    
    explained    that    Stanton       should         have    considered       how       long   the
    
    $200,000 contents limit had been in effect, whether plaintiffs
    
    purchased   any     new    equipment,            and    reassessed       the    replacement
    
    value of the bowling center's contents.
    
          Stewart   also      opined       as   to     the       sufficiency       of   Stanton's
    
    advice to plaintiffs in 2008 and 2009. He testified that Stanton
    
    failed to properly advise plaintiffs in 2008, when GNY increased
    
    its   coinsurance       requirement          from       eighty      to   ninety      percent.
    
    Stewart believed Stanton should have recommended that plaintiffs
    
    obtain an appraisal due to the coinsurance increase and because
    
    the building coverage had been the same since 2004.
    
          Stewart also testified that Stanton erred in March 2009 by
    
    advising    Michael       that   plaintiffs            did    not    require        additional
    
                                                19                                        A-2221-15T4
    insurance coverage as a result of the 2008 renovations. Stewart
    
    admitted it was not the job of a licensed insurance broker to
    
    determine the replacement value of a building, but testified
    
    that if a client asks a broker whether more insurance is needed,
    
    the broker "has an obligation to give an accurate answer because
    
    . . . he's inviting reliance on his answer." Here, however,
    
    Stewart   observed      that    Stanton         did    not   ascertain     which   items
    
    included in the 2008 renovations were permanently affixed to the
    
    structure and thus considered part of the building, and which
    
    were moveable and thus considered contents under the policy.
    
        Stewart also pointed to Stanton's failure to request the
    
    costs of the renovations. Stewart testified that if Stanton was
    
    unaware   of    the    costs,    he    could          have   recommended    plaintiffs
    
    consult     with     "somebody     qualified           to    appraise"   the   bowling
    
    equipment, and then evaluated their coverage needs. Stewart had
    
    no evidence Stanton took such action.
    
        BHI's Mistrial Motion
    
        Following Stewart's testimony, BHI moved for a mistrial,
    
    arguing BHI was prejudiced by the introduction of Charles's 1998
    
    notes that were not provided during discovery, and that the
    
    prejudice      was    compounded      by    the       fact   that   counsel    was   not
    
    permitted to re-depose Michael or Stewart. The court denied the
    
    motion, reiterating that Charles did not intentionally withhold
    
                                               20                                  A-2221-15T4
    the 1998 notes, and that any potential prejudice was ameliorated
    
    because counsel had been permitted to depose Charles about the
    
    notes, question Michael and Stewart outside of the presence of
    
    the jury, and because BHI was permitted to depose Stewart but
    
    opted not to do so. The court also noted it had ruled that BHI's
    
    expert would be permitted to offer opinions based on the 1998
    
    notes, and Charles's and Stewart's testimony about them, during
    
    the expert's testimony on BHI's behalf.
    
           Stanton's Deposition Testimony
    
           Plaintiffs read portions of Stanton's deposition transcript
    
    to    the    jury    including    his       recollection           of    the   March       2009
    
    discussion     with     Michael    about      the       2008       renovations.      Stanton
    
    testified     the    renovations      consisted         of     replacements        of     "like
    
    quality      equipment    with       like     quality          equipment,"         that     was
    
    "already      covered    in    [plaintiffs'             policy]         building     limit."
    
    Stanton informed Michael "it was not necessary to add to the
    
    building coverage at that time."
    
           The    jury     also    heard        Stanton's          deposition          testimony
    
    explaining his understanding of "replacement coverage." Stanton
    
    was asked during his deposition "if one of your insured had
    
    $100,000     coverage     on   the    building          and     the     loss   is    .     .   .
    
    $150,000[,] and has a replacement coverage in the policy, does
    
    the   insured       receive    $150,000       or    .    .     .    $100,000?"       Stanton
    
                                            21                                          A-2221-15T4
    replied: "[T]hey would receive the $150,000." Other evidence at
    
    trial showed Stanton's understanding was incorrect.
    
          Testimony of GNY's Underwriter, Phillip Wu
    
          Plaintiffs called Philip Wu, a GNY employee and underwriter
    
    for plaintiffs' 2009 GNY policy to testify that GNY conducted an
    
    annual physical inspection of the bowling center and, based on
    
    the   inspection,       entered   data     into   a     computer    program     called
    
    Marshall-Swift, which calculated the replacement value of the
    
    bowling center building. GNY used the Marshall-Swift analysis to
    
    determine      the   policy   limits      and    the    policy    premium    for    its
    
    internal use. The report was not shared with brokers and the
    
    reports for the bowling center were not provided to BHI.
    
          Wu   explained      that    GNY    would    not    permit     an    insured     to
    
    purchase a policy with building replacement cost coverage limits
    
    less than the amount calculated by the Marshall-Swift analysis.
    
    However, if an insured showed that the replacement value was
    
    more than the value generated by the Marshall-Swift analysis,
    
    the insured could purchase insurance with a higher limit by
    
    paying     a   higher    premium.       Based    on    the   2009   Marshall-Swift
    
    analysis, Wu used a replacement cost of $3,306,000 to calculate
    
    plaintiffs' insurance premium for the building coverage.
    
          Stanton's Trial Testimony
    
          Stanton testified as a defense witness. He                         has been an
    
                                             22                                   A-2221-15T4
    insurance        broker       since      1993,      specializing            in     the     field    of
    
    bowling alleys. He corrected his deposition testimony concerning
    
    the    meaning        of     "replacement           cost,"      explaining          he     confused
    
    "replacement cost" and "guaranteed replacement cost," and stated
    
    he never told plaintiffs they could recover more from GNY than
    
    their policy limit.
    
           Stanton        testified       that     over      the    course        of    his    business
    
    relationship          with    plaintiffs,        they      never       wanted       the    building
    
    coverage limit increased or expressed dissatisfaction with the
    
    contents     coverage         limits.       Stanton       did    not        believe      plaintiffs
    
    ever   wanted         additional         coverage        because      they       were      concerned
    
    about the amount of their premiums.
    
           Stanton was questioned about the Thompson-Loyle appraisal
    
    report. He denied that Charles provided him with the report in
    
    1998   or    that      they       even   met     that     year     to       discuss      increasing
    
    coverage.        He    also       denied    giving       Charles        a    replacement         cost
    
    estimate of $2,700,000. On cross-examination, however, Stanton
    
    stated      he   was       "sure"     and    "guess[ed]"         a    meeting        occurred       in
    
    September        1998.       He    admitted         he    had    no     reason        to     believe
    
    Charles's 1998 notes were inaccurate and stated that the second
    
    note accurately documented that Charles received a November 4,
    
    1998 endorsement increasing the policy limits to $2,800,000.
    
           Stanton was also questioned about his March 2003 meeting
    
                                                   23                                           A-2221-15T4
    with Charles. Stanton initially testified that he had no memory
    
    of a March 2003 meeting or if Charles asked if the bowling
    
    center should increase its business contents coverage based on
    
    its $537,000 equipment transfer. However, Stanton admitted on
    
    cross-examination that the March 2003 meeting occurred and that
    
    he advised plaintiffs the equipment transfer did not constitute
    
    a change in the building's contents necessitating an increase in
    
    the policy limits.
    
        Stanton further testified that he could not recall if he
    
    advised plaintiffs that between 2008 and 2009, GNY increased the
    
    coinsurance    requirement   on     plaintiffs'    policy   from   eighty    to
    
    ninety percent but stated that in any event, the change was
    
    reflected     "in   the   document."      On   cross-examination,    Stanton
    
    stated he did not discuss the significance of the increase with
    
    plaintiffs.
    
        Stanton     testified    that    in   2009,   Michael   showed   him    the
    
    renovations that were made to the bowling center, but he denied
    
    that Michael asked about an increase in coverage and that he
    
    advised Michael not to buy more insurance. On cross-examination,
    
    however, Stanton admitted that Michael asked him whether the
    
    renovations warranted an insurance increase, and that he told
    
    Michael the renovations were merely replacement costs that were
    
    already "figured into the building [coverage] rate."
    
                                         24                              A-2221-15T4
           Stanton also explained that he did not propose increasing
    
    the building coverage for the April 1, 2009 to April 1, 2010,
    
    policy   year        based   on     GNY's     analysis      and   valuation       of    the
    
    building. When asked why he did not propose an increase when the
    
    coinsurance rate increased from eighty to ninety percent, he
    
    replied, "I just relied on [GNY's] value." Stanton acknowledged
    
    that   the     GNY    policy       contained     a   provision      stating      that   its
    
    reports and inspections were for GNY's internal purposes only.
    
    He also acknowledged that GNY did not conduct an inspection of
    
    the    building       for    the    2009     policy     until     May    2009,    yet     he
    
    submitted that year's policy proposal to plaintiffs in March
    
    2009 and the policy, with unchanged coverage limits, was renewed
    
    and became effective in April 2009.
    
           BHI's Expert James R. Klagholz
    
           James    R.     Klagholz       testified       as    BHI's       expert    in    the
    
    profession of insurance brokers and producers. He opined that in
    
    BHI's dealing with plaintiffs, its actions were consistent with
    
    the customary standards of care in the industry. He explained
    
    that it is not the job of an insurance broker to calculate the
    
    actual   replacement         value     of    buildings,      personal     property,       or
    
    lost   income.       According       to     Klagholz,      brokers      are   simply    not
    
    qualified to determine appropriate policy limits.
    
           Klagholz testified the 1998 Thompson-Loyle appraisal report
    
                                                25                                    A-2221-15T4
    demonstrated plaintiffs were aware that a certified real estate
    
    appraiser        had     inspected       their     building       and       estimated       its
    
    replacement       cost      as   $3,650,000.       He    pointed      out    that     Charles
    
    resisted     increasing          the    building    coverage      from      $3,120,155       to
    
    $3,425,000 for the period April 1, 2003 to April 1, 2004. He
    
    opined that Charles's 2003 notes demonstrated that Charles was
    
    not willing to purchase additional insurance coverage even when
    
    it was suggested.
    
           Klagholz testified that Stanton's advice to Michael during
    
    their     2009     meeting        was    correct        because      plaintiffs       had     a
    
    replacement       cost      policy;      that    coinsurance         had    absolutely       no
    
    applicability          to   plaintiffs'      fire       losses    because      plaintiff's
    
    suffered a total loss; and that it was reasonable for Stanton to
    
    rely    on       GNY's      valuation       in      determining         the        building's
    
    replacement cost value. Klagholz concluded that neither BHI nor
    
    Stanton    did     anything       incorrect       in    the   sale    of    the     2009    GNY
    
    policy to plaintiffs.
    
           On cross-examination, Klagholz agreed it would be improper
    
    for an insurance broker to do an independent calculation of a
    
    building     and        its      contents        replacement       cost       to     make     a
    
    recommendation for insurance coverage limits. He explained that
    
    if a client asks a broker if insurance coverage limits should be
    
    raised, the broker should not advise the client the coverage is
    
                                                26                                       A-2221-15T4
    adequate but should instead advise the client that the broker is
    
    not qualified to calculate the value of a client's assets.
    
          The Verdict
    
          The jury returned a verdict finding BHI negligent, and that
    
    BHI's    negligence        proximately       caused    plaintiffs'        damages.     The
    
    jury found plaintiffs' total loss from the fire was $6,840,000,
    
    representing       the     sum    of   its    findings      as    to     building     loss
    
    ($5,600,000),       business      interruption         ($750,000),        and    contents
    
    loss ($490,000). The court molded the verdict by deducting the
    
    sums paid by GNY under the policy ($4,070,000), and the amounts
    
    recovered by plaintiffs from Safe & Sound and S.S. Sprinkler
    
    ($950,000)       from       the    amount      of      plaintiffs'         total      loss
    
    ($6,840,000) for a damage award of $1,820,000. The court also
    
    awarded    $178,808.77       in    prejudgment        interest     and    costs     for   a
    
    total judgment of $1,998,808.77.
    
          BHI's New Trial Motion
    
          BHI moved for a new trial, claiming the admission of the
    
    1998 notes and Charles's corresponding testimony deprived BHI of
    
    a fair trial. The court issued a detailed written opinion and
    
    entered    an      order    denying     BHI's       motion,      finding      there    was
    
    sufficient      evidence     to    support     the    jury's     determination,        and
    
    that the jury "evidently resolved the conflicting accounts of
    
    the     incident    between       Charles      []     and   Stanton      by     crediting
    
                                             27                                      A-2221-15T4
    [p]laintiffs' version, which was corroborated by trial testimony
    
    and other statements."
    
        The      court     acknowledged        that        Charles's        1998         notes
    
    contradicted Stanton's trial testimony and likely affected his
    
    credibility, but described the notes as "one of the numerous
    
    evidential    considerations"      utilized       by   the      jury    to    determine
    
    credibility. The court also found the notes "did not involve a
    
    wholesale-change in the presentation of [p]laintiffs' version of
    
    the incident," and "did not deviate significantly from pre-trial
    
    deposition    testimony."      Moreover,     the    court       concluded      it     took
    
    sufficient remedial measures in response to the late production
    
    of the notes to ensure BHI received a fair trial.
    
                                          II.
    
        BHI      first    argues    the   court        erred     by    permitting          the
    
    introduction of Charles's undisclosed 1998 notes memorializing
    
    his September 1998 meeting with Stanton and allowing testimony
    
    based on the notes. BHI contends the notes were integral and
    
    material and, therefore, their late production caused prejudice
    
    that could not be remedied. The notes, BHI argues, were the
    
    "smoking     gun"    that   altered    the    entire       trial.       We     are     not
    
    persuaded.
    
        BHI      challenged     the    admissibility           of     the        notes    and
    
    corresponding testimony in different contexts during the trial.
    
                                          28                                        A-2221-15T4
    First,      BHI    objected    to     both    Charles        and    Stewart's           testimony
    
    concerning the notes.10 Second, BHI sought relief in the form of
    
    a    mistrial      motion    and     motion       for   a    new    trial        based    on   the
    
    admission         of     testimony     about        the      notes.        We     address      the
    
    objections and motions in turn.
    
           A.        BHI's Objections to              Testimony         and     Evidence        About
                     Charles's 1998 Notes
    
           BHI argues the court erred by permitting Charles to refresh
    
    his    recollection          based     on     the       1998       notes        and     testimony
    
    concerning        the     notes.   BHI   contends           the    court    compounded         its
    
    error by permitting Stewart to supplement the opinion contained
    
    in his expert report by testifying about the notes and expanding
    
    his opinion based on the notes.
    
           "When a party fails to comply with discovery, the trial
    
    court,      in    its    discretion,     may      impose       appropriate            sanctions."
    
    Allis-Chalmers Corp. Prop. Liab. Tr. v. Liberty Mut. Ins. Co.,
    
    
    305 N.J. Super. 550
    , 557 (App. Div. 1997). "The application of
    
    sanctions is consigned to the sound discretion of the court."
    
    Brown v. Mortimer, 
    100 N.J. Super. 395
    , 401 (App. Div. 1968).
    
           We    have       recognized    that     "[p]reclusion          of        evidence     as   a
    
    
    10
       BHI did not challenge the authenticity of the notes, the
    admissibility of the notes had they been timely produced in
    discovery, or Charles's right to testify about the 1998
    conversations with Stanton without reference to the notes.
    
    
                                                 29                                          A-2221-15T4
    sanction       for     failure     to    provide     notice      or    make    required
    
    disclosures is available 'in the limited circumstances where a
    
    lesser sanction is not sufficient to remedy the problem caused
    
    by an inexcusable delay . . . thereby resulting in substantial
    
    prejudice to the non-disclosed party.'" Manorcare Health Servs.,
    
    Inc. v. Osmose Wood Preserving, Inc., 
    336 N.J. Super. 218
    , 235
    
    (App. Div. 2001) (emphasis added) (quoting Mitchell v. Procini,
    
    
    331 N.J. Super. 445
    , 453-54 (App. Div. 2000)).
    
           In    exercising     its    discretion,       the    trial      court's       chosen
    
    "sanction must be just and reasonable." Lindenmuth v. Holden,
    
    
    296 N.J. Super. 42
    , 52 (App. Div. 1996), certif. denied, 
    149 N.J. 34
         (1997).    The     court    can      suspend      the   imposition          of
    
    sanctions "(1) where there is an absence of a design to mislead;
    
    (2) where there is an absence of the element of surprise if the
    
    evidence     is      admitted;    and    (3)   where     there    is   an    absence       of
    
    prejudice       which     would     result     from      the     admission         of    the
    
    evidence." Ibid.; see also Manorcare, supra, 336 N.J. Super. at
    
    235    (suggesting       lesser    sanctions       may    be   adequate       to     remedy
    
    surprise).
    
           These      standards      apply    whether    the    surprise        evidence       is
    
    proffered through the form of lay or expert witness testimony.
    
    See State v. Wolfe, 
    431 N.J. Super. 356
    , 363 (App. Div. 2013),
    
    certif. denied, 
    217 N.J. 285
     (2014). The trial court's decision
    
                                              30                                       A-2221-15T4
    to exclude or admit expert testimony on a subject not covered in
    
    the written report must "stand unless so wide of the mark that
    
    it results in a manifest denial of justice." Bitsko v. Main
    
    Pharmacy, Inc., 
    289 N.J. Super. 267
    , 284 (App. Div. 1996).
    
         Based on our careful review of the record, we discern no
    
    basis to conclude the court abused its discretion in allowing
    
    Charles and Stewart to testify concerning Charles's 1998 notes
    
    and allowing introduction of the notes into evidence. Faced with
    
    plaintiffs' failure to produce the notes during discovery, the
    
    court immediately conducted an N.J.R.E. 104 hearing to determine
    
    why the notes had not been produced during discovery and the
    
    appropriate remedy for the failure.
    
         The record supports the court's determination following the
    
    hearing   that   Charles's   failure   to   produce   the   notes     during
    
    discovery was not the result of any design to mislead, and BHI
    
    agreed.11 The court, however, recognized that the existence of
    
    the notes and Charles's intended reliance on them constituted a
    
    surprise for BHI. In order to ameliorate any prejudice from the
    
    surprise, the court permitted BHI to take Charles's deposition.
    
    
    11
       After hearing testimony from Charles, the court found there
    was "probably . . . no intention to deceive," and offered BHI's
    counsel the opportunity to cross-examine Charles on the issue.
    BHI declined and stated, "I don't have any reason to believe
    that [Charles] was intending to deceive anybody."
    
    
                                     31                                 A-2221-15T4
    BHI was permitted to question Charles concerning the notes prior
    
    to continuing Charles's direct testimony. Charles was the first
    
    witness, his revelation concerning the notes came early in his
    
    testimony, and his deposition afforded BHI ample time to address
    
    the    testimony     and     the    notes      on    cross-examination.            BHI    was
    
    thereafter well-positioned to address the testimony and evidence
    
    with all subsequent witnesses at trial.
    
           BHI contends that the opportunity to depose Charles during
    
    the    trial      could    not     remedy      the       prejudice      from    the      late
    
    production of the notes because the notes changed plaintiffs'
    
    theory of the case. BHI argues it was prejudiced because prior
    
    to    the   discovery      of     the   notes,      plaintiffs'        theory      was   that
    
    Stanton     and    BHI     were    negligent        by    never     recommending         that
    
    plaintiffs        obtain     an     appraisal        report       to     determine        the
    
    replacement value of the building and its contents. BHI asserts
    
    that after the notes were discovered, plaintiffs' theory was
    
    that Stanton was negligent by making his own calculation of the
    
    value of the building and contents.
    
           As correctly determined by the trial court, the record does
    
    not     support      BHI's        contentions.           Although      Charles's         1998
    
    conversations       with     Stanton     provided         context      for   the    ensuing
    
    annual renewals of the policy, the jury's verdict was based on a
    
    determination that Stanton was negligent eleven years later in
    
                                              32                                        A-2221-15T4
    2009. Plaintiffs' theory of negligence was that Stanton never
    
    requested    an   appraisal    in     connection    with     the   2009        policy
    
    renewal and that he was negligent in advising plaintiffs they
    
    did not need increased coverage based on their improvements to
    
    the bowling center. That theory never changed. Charles's notes
    
    concerning the 1998 policy did not alter plaintiffs' theory of
    
    BHI's negligence concerning the insurance coverage limits in the
    
    2009 policy, which was the policy at issue in the litigation.
    
        Moreover, the evidence showed that the policy limits were
    
    increased in 2003 based on conversations between Charles and
    
    Stanton that were wholly unrelated to the 1998 notes. Charles's
    
    notes   concerning      the   2003    conversations,        that   were        timely
    
    produced     during   discovery,      supported     plaintiffs'         consistent
    
    theory that Stanton was negligent in advising them there was no
    
    need for changes in the policy limits. The evidence also showed,
    
    without reference to the 1998 notes, that Stanton never advised
    
    plaintiffs    about     the   2008    increase    in   the    coinsurance          and
    
    otherwise provided erroneous advise about coverage limits at the
    
    time the 2009 policy was purchased.
    
        Charles's testimony concerning the 1998 notes did not alter
    
    plaintiffs'    theory    of   the    case   or   surprise    BHI   in    a     manner
    
    requiring the exclusion of the evidence. This case does not
    
    resemble the cases cited by BHI where exclusion was required.
    
                                          33                                     A-2221-15T4
    See, e.g., McKenney v. Jersey City Med. Ctr., 
    167 N.J. 359
    , 369-
    
    76 (2001) (finding the court abused its discretion in denying a
    
    mistrial   motion   where      defense    counsel      withheld     disclosure     of
    
    expert's   intention      to   deviate     from      his    earlier   opinion    and
    
    elicited   the   testimony       after    the   plaintiff's        case-in-chief);
    
    Wymbs v. Twp. of Wayne, 
    163 N.J. 523
    , 545-46 (2000) (reversing
    
    the admission of defendant's surprise expert witness produced
    
    twelve days into trial, who opined on a pivotal issue in the
    
    case regarding the scene of an accident); Thomas v. Toys "R" Us,
    
    Inc., 
    282 N.J. Super. 569
    , 580-82 (App. Div.) (concluding the
    
    trial court properly excluded expert's references to x-ray films
    
    plaintiff discovered on the day of trial in part because it left
    
    defendant unable to rebut the evidence with his own expert),
    
    certif. denied, 
    142 N.J. 574
     (1995).
    
        We are therefore convinced that although BHI was surprised
    
    by the production of the notes, it did not suffer any prejudice
    
    that was not ameliorated by the court's curative measures of
    
    requiring production of the notes and allowing BHI's counsel to
    
    depose Charles.
    
        The     court   was    not    required      to    sanction      plaintiffs     by
    
    barring    the   testimony     and   evidence,        and    did   not   abuse   its
    
    discretion in permitting the testimony and evidence after BHI
    
    deposed Charles. The court struck a balance and alleviated any
    
                                         34                                    A-2221-15T4
    prejudice    to   BHI    by   allowing    its   counsel   to    depose   Charles
    
    before resuming trial. See, e.g., Gaido v. Weiser, 227 N.J.
    
    Super. 175, 192 (App. Div. 1998) (finding exclusion of expert
    
    testimony not contained in the expert's report was not required
    
    where the court permitted the expert's deposition at trial and
    
    the testimony expanded upon the parties' defense, but did not
    
    assert an unexpected defense), aff'd, 
    115 N.J. 310
     (1989).
    
           For substantially the same reasons, we find the court took
    
    sufficient measures to eliminate potential prejudice concerning
    
    Stewart's expert testimony based on the 1998 notes. The court
    
    again paused the trial in order to ascertain Stewart's intended
    
    testimony outside the presence of the jury at an N.J.R.E. 104
    
    hearing. At the hearing, Stewart explained that based upon the
    
    1998 notes "as well as the [Thompson-Loyle] appraisal [report],"
    
    Stanton incorrectly performed a valuation of the property and
    
    its contents. Stewart further testified that Stanton was not a
    
    licensed     appraiser    and   he   incorrectly    advised     plaintiffs       to
    
    obtain $2,700,000 in building coverage, an amount that "did not
    
    satisfy GNY's minimum [eighty percent coinsurance] requirement."
    
    The court stated that BHI's counsel could cross-examine Stewart
    
    with   his   N.J.R.E.     104   hearing    testimony,     and   offered     BHI's
    
    counsel the opportunity to depose Stewart, which counsel elected
    
    not to pursue. We discern no abuse of discretion in the trial
    
                                         35                                  A-2221-15T4
    court's   chosen       remedial    measures     because        Stewart's       testimony
    
    concerning the 1998 notes did not change his ultimate opinion
    
    that   BHI    grossly     underinsured       the    bowling          center    based      on
    
    Stanton's erroneous and careless advice about the 2009 policy.
    
    See ibid.
    
           Stewart's    opinion        at   trial      was    primarily          based    upon
    
    Stanton's failure to discuss with plaintiffs the impact of GNY's
    
    increase of its coinsurance rate before renewing the policy in
    
    2008, and his response to Michael's inquiries in 2009 about
    
    whether the insurance limits should be increased. Stewart was
    
    deposed on three occasions but was only asked about the parties'
    
    1998 meeting at his first deposition, where he opined that BHI
    
    should have advised plaintiffs to have the property appraised
    
    before underwriting the 1998 policy.
    
           During his subsequent depositions, however, Stewart only
    
    addressed Stanton's encounters with plaintiffs and the adequacy
    
    of their insurance in 2003 and 2009. At trial, Stewart remained
    
    largely      focused     on   those      encounters,           and     his     testimony
    
    concerning the 1998 notes was brief and consistent with his
    
    testimony during the N.J.R.E. 104 hearing. Stewart relied on the
    
    1998 notes as additional support for the theory that Stanton was
    
    negligent     by   failing    to    properly    advise         plaintiffs      of    their
    
    insurance     coverage     requirements,        and      not    in     support       of   an
    
                                            36                                       A-2221-15T4
    altered theory of negligence. See Gaido, supra, 227 N.J. Super.
    
    at 192.
    
           We thus find no abuse in the court's discretion in allowing
    
    Charles or Stewart to testify concerning the 1998 notes because
    
    there was an absence of any design to mislead, and any prejudice
    
    to BHI was cured by the court's remedial measures.
    
           B.     BHI's Motions for a Mistrial and New Trial
    
           Following Stewart's testimony, BHI moved for a mistrial,12
    
    arguing again that BHI was prejudiced by the late production of
    
    the notes, and that the prejudice was compounded by the fact
    
    that counsel was not permitted to re-depose Michael or Stewart.13
    
           The court denied BHI's motion, reiterating that Charles did
    
    not intentionally withhold the existence of the 1998 notes, and
    
    that    the    court   took   sufficient   measures   to   eliminate   any
    
    
    12
      BHI inaccurately asserts that it moved for a mistrial twice:
    (1) during Charles's testimony on August 27, 2015, when the
    existence of the 1998 notes first became apparent; and (2) after
    Stewart's testimony. The record shows that BHI's counsel
    indicated that she might move for a mistrial depending on the
    court's remedial measures, but did not move for a mistrial until
    Stewart's testimony concluded.
    13
       As noted, BHI was offered the opportunity to depose Stewart
    but opted not to do so. Michael was questioned briefly under
    oath concerning the 1998 notes and testified he had never seen
    them prior to the night before Charles's disclosure of them
    during the trial. In addition, there is no evidence Michael was
    present during the September 1998 meeting between Charles and
    Stanton referred to in one of the 1998 notes.
    
    
                                       37                            A-2221-15T4
    potential       prejudice.     The    court      noted   that     it       allowed   BHI's
    
    counsel to depose Charles, permitted counsel to question Michael
    
    on the record about his knowledge of the notes, conducted an
    
    N.J.R.E.    104      hearing      regarding      Stewart's     testimony,         afforded
    
    defense counsel the opportunity to depose Stewart, and allowed
    
    BHI's    expert      to   opine    about    the    notes      without       amending     his
    
    expert report.
    
        "The grant of a mistrial is an extraordinary remedy to be
    
    exercised only when necessary 'to prevent an obvious failure of
    
    justice.'" State v. Yough, 
    208 N.J. 385
    , 397 (2011) (quoting
    
    State v. Harvey, 
    151 N.J. 117
    , 205 (1997), cert. denied, 
    528 U.S. 1085
    , 
    120 S. Ct. 811
    , 
    145 L. Ed. 2d 683
     (2000)). "For that
    
    reason, an appellate court should not reverse a trial court's
    
    denial of a mistrial motion absent a 'clear showing' that 'the
    
    defendant   suffered        actual       harm'    or   that    the    court      otherwise
    
    'abused its discretion.'" Ibid. (quoting State v. Labrutto, 
    114 N.J. 187
    , 207 (1989)). "A decision by the trial court to deny a
    
    motion    for    a   mistrial      'is    reviewable       only      for    an   abuse    of
    
    discretion.'" Khan v. Singh, 
    397 N.J. Super. 184
    , 202 (App. Div.
    
    2007) (quoting State v. Winter, 
    96 N.J. 640
    , 647 (1984)), aff'd,
    
    
    200 N.J. 82
     (2009).
    
        In exercising its discretion in deciding a mistrial motion,
    
    a trial court must consider the unique circumstances of the
    
                                               38                                     A-2221-15T4
    case, and whether an alternative course of action short of a
    
    mistrial is appropriate. State v. Smith, 
    224 N.J. 36
    , 47 (2016).
    
    "For example, a curative instruction, a short adjournment or
    
    continuance,        or        some    other    remedy,   may   provide   a     viable
    
    alternative to a mistrial depending on the facts of the case."
    
    Ibid.
    
          On appeal, BHI asserts the prejudice it suffered from the
    
    late production of the 1998 notes was not cured by the court's
    
    remedial measures. BHI asserts that the late disclosure of the
    
    notes prevented it from deposing John E. Loyle, who drafted the
    
    Thompson-Loyle appraisal report, and from obtaining any related
    
    documents pertinent to the report. BHI further asserts it would
    
    have approached its depositions of Charles and Michael with a
    
    focus on whether they relied on Stanton's advice over that of
    
    the     appraiser        of    the     Thompson-Loyle    appraisal     report,     and
    
    retained an expert to opine concerning their decision.
    
          As noted, we discern no prejudice to BHI in the admission
    
    of the testimony and evidence concerning the notes that was not
    
    directly addressed by the court's remedial actions during the
    
    trial. The record supports the trial court's decision that it
    
    undertook     sufficient             alternative   actions     to   ameliorate     any
    
    surprise or alleged prejudice created by the late discovery of
    
    the 1998 notes.
    
                                                  39                             A-2221-15T4
         We are not persuaded by BHI's arguments that it would have
    
    pursued a different course of discovery had it known about the
    
    notes earlier. BHI obtained the Thompson-Loyle appraisal report
    
    during discovery and knew it was prepared in part by Charles's
    
    nephew,   John    E.   Loyle,   but   chose    not     to   depose   him     during
    
    discovery.   In    addition,    BHI's      assertion    that   it    would      have
    
    retained an expert to address plaintiffs' purported comparative
    
    negligence is contradicted by BHI's own position because BHI did
    
    not plead comparative negligence as an affirmative defense, and
    
    its expert's report did not opine that plaintiffs' disregard of
    
    the appraisal report constituted negligence.14
    
         Moreover, and as noted, the 1998 notes did not establish
    
    BHI's negligence in 2009, when the policy at issue was sold by
    
    BHI. Again, the undisputed evidence showed that Stanton did not
    
    advise plaintiffs to obtain an appraisal at that time, there was
    
    no evidence Stanton calculated the value of the building and its
    
    contents at that time, and the jury was asked only to determine
    
    if BHI was negligent in its actions concerning the 2009 policy.
    
         In sum, the court did not abuse its discretion in denying
    
    BHI's motion for a mistrial. BHI fails to make a clear showing
    
    that the court's denial of its mistrial motion constituted "an
    
    14
       As explained infra, we affirm the trial court's decision
    barring BHI from pursuing a comparative negligence defense.
    
    
                                          40                                   A-2221-15T4
    abuse of discretion that result[ed] in a manifest injustice."
    
    Harvey, supra, 151 N.J. at 205.
    
        For the same reasons, we reject BHI's claim that the court
    
    erred in denying its request for a new trial. "A trial judge may
    
    only grant a motion for a new trial 'if, having given due regard
    
    to the opportunity of the jury to pass upon the credibility of
    
    the witnesses, it clearly and convincingly appears that there
    
    was a miscarriage of justice under the law.'" Hill v. N.J. Dep't
    
    of Corr. Comm'r Fauver, 
    342 N.J. Super. 273
    , 302 (App. Div.
    
    2001)   (quoting      R.    4:49-1(a)),       certif.   denied,       
    171 N.J. 338
    
    (2002). A "miscarriage of justice" may occur where there is a
    
    "manifest lack of inherently credible evidence to support the
    
    [jury's] finding," or where it is obvious the jury overlooked or
    
    undervalued crucial evidence. Lindenmuth, supra, 296 N.J. Super.
    
    at 48 (quoting Baxter v. Fairmont Food Co., 
    74 N.J. 588
    , 598
    
    (1977)).
    
        In     applying     this    standard,      the   judge     must   evaluate     the
    
    evidence with an eye toward correcting "clear error or mistake
    
    by the jury." Dolson v. Anastasia, 
    55 N.J. 2
    , 6 (1969). The
    
    judge   is   to   "take      into   account,     not    only    tangible     factors
    
    relative     to   the      proofs   as   shown    by    the    record,      but    also
    
    appropriate matters of credibility, generally peculiarly within
    
    the jury's domain, and the intangible 'feel of the case' which
    
                                             41                                  A-2221-15T4
    it has gained by presiding over the trial." Kita v. Borough of
    
    Lindenwold, 
    305 N.J. Super. 43
    , 49 (App. Div. 1997) (quoting
    
    Dolson, supra, 55 N.J. at 6).
    
           The court addressed BHI's new trial motion in a detailed
    
    and    well-reasoned      written     opinion.           For   the        reasons    already
    
    noted, as well as those set forth by the trial judge, we find no
    
    miscarriage of justice in the jury's verdict and no merit to
    
    BHI's contention that the court erred in denying the mistrial
    
    motion. Hill, supra, 342 N.J. Super. at 302.
    
                                              III.
    
           Next, we consider BHI's argument that the trial court erred
    
    in molding the verdict without crediting BHI $950,000 against
    
    the jury's damage award for the amount GNY received from Safe &
    
    Sound and S.S. Sprinkler. BHI contends it is entitled to the
    
    credit   because    GNY    did      not    have      a   right       to    subrogation      of
    
    plaintiffs' claims against the tortfeasors.
    
           Subrogation is an equitable device designed "to compel the
    
    ultimate   discharge      of   an    obligation          by    the    one    who    in   good
    
    conscience ought to pay it [and] . . . to serve the interests of
    
    essential justice between the parties." Culver v. Ins. Co. of N.
    
    Am., 
    115 N.J. 451
    , 455-56 (1989) (quoting Std. Accident Ins. Co.
    
    v.    Pellecchia,   
    15 N.J. 162
    ,       171   (1954)).        "In     an    insurance
    
    context, [subrogation] fulfills the dual purposes of avoiding
    
                                              42                                        A-2221-15T4
    unjust enrichment to an insured who obtains recovery for the
    
    same injury from both his insurer and the tortfeasor and, in the
    
    absence of such double recovery, of precluding the tortfeasor
    
    from escaping all liability for damages that the tortfeasor has
    
    caused." McShane v. New Jersey Mfrs. Ins. Co., 
    375 N.J. Super. 305
    , 309-10 (App. Div. 2005).
    
        Relying on Culver, supra, BHI claims GNY was not entitled
    
    to subrogation of plaintiffs' claims until plaintiffs were made
    
    whole. 115 N.J. at 456. BHI argues plaintiffs had not been made
    
    whole at the time GNY asserted claims against Safe & Sound and
    
    S.S. Sprinkler and therefore GNY did not have a subrogation
    
    right   to   assert    claims     on    plaintiffs'        behalf   against     the
    
    tortfeasors.
    
        In Culver, the Court considered an insured's challenge to
    
    an agreement it reached with the insurer to divide the sums
    
    recovered by the insurer from the tortfeasors. Id. at 453. The
    
    insured sought a declaration the agreement was unenforceable in
    
    part based on the argument that BHI makes here: that the insurer
    
    had no right to subrogation because the insured had not yet been
    
    made whole. Id. at 452.
    
        The      Court     rejected        the     argument,      explaining       that
    
    "[s]ubrogation rights are created in one of three ways: '(1) an
    
    agreement    between   the   insurer         and   the   insured,   (2)   a   right
    
                                           43                                 A-2221-15T4
    created   by    statute,      or   (3)    a    judicial   "device      of    equity    to
    
    compel the ultimate discharge of an obligation by the one who in
    
    good conscience ought to pay it."'" Id. at 456-59 (citations
    
    omitted). The Court recognized subrogation rights existed under
    
    the insurance policy, and that equitable principles generally
    
    permitted      the   assertion      of   subrogation      rights      only    after    an
    
    insured was made whole, but held that an insured and insurer
    
    could enter into an enforceable agreement permitting the insurer
    
    to assert subrogation rights prior to the insured being made
    
    whole. Id. at 457. The Court expressly rejected a requirement
    
    that "the insured be made whole first from the settlement of a
    
    subrogation      action"      where      the    insured    and    insurer      had     "a
    
    contractual agreement to the contrary." Id. at 459.
    
        We therefore reject BHI's assertion that it was entitled to
    
    a credit for the $950,000 recovered by GNY from the tortfeasors
    
    because   GNY    could     not     properly     assert    subrogation        rights    on
    
    plaintiffs' behalf. Pursuant to the litigation agreement between
    
    GNY and plaintiffs, GNY was authorized to assert subrogation
    
    claims    on    plaintiffs'        behalf      without    any    requirement         that
    
    plaintiffs      first    be   made       whole.   See     id.    at   458-59.     BHI's
    
    
    
    
                                              44                                   A-2221-15T4
    contentions to the contrary lack merit.15
    
                                         IV.
    
          BHI also argues the court erred by granting GNY's motion
    
    for   summary    judgment   on    BHI's    indemnification    claim    because
    
    there were genuine issues of material fact concerning whether
    
    GNY owed a duty to BHI and plaintiffs. BHI asserts that GNY
    
    conducted annual inspections of the property and calculated a
    
    replacement value for the building that was used to determine
    
    the   policy    premiums,   and   therefore     GNY   owed   BHI   a   duty    to
    
    accurately      calculate   the    building's    replacement       value.     BHI
    
    contends GNY's actions in calculating a replacement value that
    
    BHI relied upon created a special relationship between GNY and
    
    BHI that imposed a duty on GNY to calculate the replacement
    
    
    15
       Because we find no support in the law for BHI's contention
    that it was entitled to the $950,000 credit because GNY could
    not   be  properly   subrogated  to   plaintiffs'  rights   until
    plaintiffs were made whole, we need not address plaintiffs'
    assertion that no credit was required because their agreement
    with GNY constituted a reasonable effort to mitigate their
    damages. We note only that plaintiffs had an obligation to take
    reasonable steps to mitigate their damages, Covino v. Peck, 
    233 N.J. Super. 612
    , 616 (App. Div. 1989), and that BHI does not
    dispute on appeal that plaintiffs' entry into the agreement with
    GNY constituted a reasonable effort to mitigate damages. BHI
    offers no evidence that the agreement or the agreed upon sharing
    of the proceeds was an unreasonable exercise of plaintiffs' duty
    to mitigate damages. See Prospect Rehab. Servs., Inc. v.
    Squitieri, 
    392 N.J. Super. 157
    , 164 (App. Div.), certif. denied,
    
    192 N.J. 293
     (2007); Covino, supra, 233 N.J. Super. at 619;
    Spaulding v. Hussain, 
    229 N.J. Super. 430
    , 444 (App. Div. 1988).
    
    
                                        45                                 A-2221-15T4
    value     accurately.       BHI   claims     GNY    breached        that   duty     by
    
    understating       the   replacement     value     of   the    building,   and    the
    
    court erred by granting summary judgment                      by finding no duty
    
    existed.16
    
         When reviewing a grant of summary judgment, we employ the
    
    same standard used by the motion judge under Rule 4:46. Henry v.
    
    N.J. Dep't of Human Servs., 
    204 N.J. 320
    , 330 (2010). First, we
    
    determine whether the moving party has demonstrated there were
    
    no genuine disputes as to material facts, and then we decide
    
    whether      the    motion     judge's      application        of   the    law    was
    
    correct. Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J.
    
    Super.    224,     230-31    (App.   Div.), certif.      denied, 
    189 N.J. 104
    
    (2006). In doing so, we view the evidence in the light most
    
    favorable to the non-moving party. Brill v. Guardian Life Ins.
    
    Co. of Am., 
    142 N.J. 520
    , 523 (1995). We accord no deference to
    
    the motion judge's legal conclusions, which we review de novo.
    
    Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 
    140 N.J. 366
    ,
    
    
    16
       BHI sought indemnification against GNY only for plaintiffs'
    losses due to the underinsurance for the full replacement cost
    for the building. There was no evidence GNY conducted
    inspections or valuations of the contents of the bowling center
    to determine their replacement costs, or of plaintiffs'
    potential business interruption losses. Thus, BHI does not claim
    the court erred in dismissing its indemnification claim based on
    plaintiffs' underinsured losses for the replacement costs of the
    building's contents or the interruption of plaintiffs' business.
    
    
                                           46                                   A-2221-15T4
    378 (1995). Applying these standards, and based on the summary
    
    judgment record provided by the parties on appeal,17 we affirm
    
    the court's grant of GNY's summary judgment motion.
    
          Notably, BHI alleged before the motion court that it was
    
    entitled to contractual indemnification from GNY in part because
    
    BHI   was   GNY's   agent      pursuant       to   an    agreement       between       the
    
    parties. See Johnson v. MacMillan, 
    233 N.J. Super. 56
    , 61 (App.
    
    Div.) (holding that "[a]s a matter of elementary agency law, the
    
    negligence of an employee-agent is imputable to the employer-
    
    principal, who must answer for it"), remanded on other grounds,
    
    
    118 N.J. 199
     (1989); accord Mazur v. Selected Risks Ins. Co.,
    
    
    233 N.J. Super. 219
    , 226 (App. Div. 1989); Avery v. Arthur E.
    
    Armitage Agency, 
    242 N.J. Super. 293
    , 300-01 (App. Div. 1990).
    
    The court dismissed the claim, finding BHI was not entitled to
    
    indemnification     pursuant     to    the    agency       agreement     because       BHI
    
    terminated the agreement on April 3, 2007, two years prior to
    
    the 2009 policy was executed. The record supports the court's
    
    finding,    BHI   does   not    point    to    any      evidence    in     the     record
    
    showing     otherwise,   and     BHI    does       argue    the    court    erred        in
    
    
    17
        We   rely   upon  the   documents,  affidavits,  deposition
    transcripts, and other materials that were submitted in BHI's
    appendix pursuant to Rule 2:6-1(a)(1)(I). BHI represents these
    materials comprised the record before the motion court, and GNY
    does not argue otherwise.
    
    
                                            47                                       A-2221-15T4
    rejecting its agency theory on appeal. An issue not briefed on
    
    appeal is deemed waived. Jefferson Loan Co. v. Session, 397 N.J.
    
    Super. 520, 525 n.4 (App. Div. 2008); Zavodnick v. Leven, 
    340 N.J. Super. 94
    , 103 (App. Div. 2001).
    
        BHI challenges the court's dismissal of its indemnification
    
    claim to the extent the claim is premised on basic negligence
    
    principles.    In   order   to   prevail    on    a    negligence         claim,   the
    
    plaintiff must prove: "(1) that the defendant owed a duty of
    
    care; (2) that the defendant breached that duty; (3) actual and
    
    proximate causation; and (4) damages." Fernandes v. DAR Dev.
    
    Corp., 
    222 N.J. 390
    , 403-04 (2015). The motion court dismissed
    
    BHI's    indemnification    claim    finding      there    was       no    competent
    
    evidence supporting a finding that GNY assumed a duty of care to
    
    provide BHI or Stanton with an accurate valuation of the total
    
    replacement costs of the building. Based on our review of the
    
    motion record, we agree.
    
        "The existence of a duty to exercise reasonable care to
    
    avoid risk of harm to another is a question of law." Fackelman
    
    v. Lac d'Amiante du Quebec, 
    398 N.J. Super. 474
    , 486 (App. Div.
    
    2008).   The   existence    of   a   duty   "is       largely    a    question       of
    
    fairness or policy," and the inquiry involves the weighing of
    
    the relationship of the parties, the nature of the risk and the
    
    public interest in the proposed solutions. Wang v. Allstate Ins.
    
                                         48                                      A-2221-15T4
    Co., 
    125 N.J. 2
    , 15 (1991). "[T]he legal determination of the
    
    existence of a duty may differ, depending on the facts of the
    
    case." Ibid.
    
          An insurer and its agents have "no common law duty . . .
    
    to advise an insured concerning the possible need for higher
    
    policy limits upon renewal of the policy. If such a duty would
    
    be   in   the       public     interest,        it     is   better      established        by
    
    comprehensive legislation, rather than by judicial decision."
    
    Wang, supra, 125 N.J. at 11-12. However, it has been held that
    
    brokers are liable for the negligent procurement of insurance on
    
    behalf    of   an       insured   where    the       "broker     agrees    to    procure    a
    
    specific insurance policy for another but fails to do so." Aden
    
    v. Fortsh, 
    169 N.J. 64
    , 78 (2001); accord Rider v. Lynch, 
    42 N.J. 465
    , 477 (1964).
    
          "Liability         resulting    from       the    negligent         procurement      of
    
    insurance is premised on the theory that the broker 'ordinarily
    
    invites [reliance] on his expertise in procuring insurance that
    
    best suits their requirements.'" Aden, supra, 169 N.J. at 78
    
    (quoting Rider, supra, 42 N.J. at 477). "Because of the . . .
    
    complexity         of    the   insurance        industry         and   the      specialized
    
    knowledge required to understand all of its intricacies, the
    
    relationship between an insurance agent [or broker] and a client
    
    is   often     a    fiduciary      one."    Sobotor         v.    Prudential       Prop.    &
    
                                               49                                      A-2221-15T4
    Casualty Ins. Co., 
    200 N.J. Super. 333
    , 341 (App. Div. 1984).
    
    The fiduciary duty exists in part because an agent or broker is
    
    sophisticated in the field of insurance and the client is not.
    
    Id.   at     341-42.       "Insurance        brokers    (and     agents)    have     a
    
    responsibility in law to act toward their less expert clients in
    
    a   way    that    is    responsible    in    fact."    Id.    at   343   (quotation
    
    omitted).
    
          The undisputed evidence showed that at all times relevant
    
    to the issuance of the 2009 policy, BHI and Stanton acted as
    
    independent insurance brokers. Generally, "[s]o separate are the
    
    broker and the insurer that when the insured recovers against
    
    the broker, the broker may not obtain indemnification from the
    
    insurer." Weinisch v. Sawyer, 
    123 N.J. 333
    , 341 (1991); accord
    
    Avery, supra, 242 N.J. Super. at 310-11. However, where a broker
    
    can establish that the insurer is negligent, the insurer owes a
    
    duty of contribution to the broker. See Johnson, supra, 233 N.J.
    
    Super.     at     64    (explaining    that     "if    [the    insurer]    had   been
    
    negligent, it would have been a joint tortfeasor owing joint and
    
    several liability to plaintiffs and a duty of contribution to
    
    [the broker]"); see also Rider, supra, 42 N.J. at 475 (observing
    
    that regardless of the insurance broker's negligence, an insurer
    
    would be liable to the insured if it had been negligent in
    
    issuing the insurance policy).
    
                                            50                                  A-2221-15T4
          Here, the motion court found GNY did not owe a duty to
    
    provide BHI with an accurate statement of the full replacement
    
    costs     of   plaintiffs'           building      because    "no    evidence      has     been
    
    presented that GNY agreed to take on the duty of valuing the
    
    insured's property." The undisputed facts support the court's
    
    conclusion.
    
          The evidence showed that GNY only used the Marshall-Swift
    
    analysis       internally,        the    valuation      reports       generated       by    the
    
    analysis were not provided to BHI or Stanton prior to the fire
    
    and subsequent lawsuits, and Stanton never communicated with GNY
    
    or   Wu    concerning          the    valuations.      Moreover,         the    GNY     policy
    
    Stanton        sold       to    plaintiffs         expressly        provided       that     any
    
    inspections          or    reports      undertaken      by     GNY      related     only      to
    
    insurability and the premiums to be charged.
    
          GNY never advised BHI that the 2009 policy limits were
    
    based     on   a     dispositive        determination        of   the    building's        full
    
    replacement costs. In addition, Stanton and BHI knew GNY would
    
    insure    the      building      up     to   its    appraised       value    and   that     the
    
    policy     limit      for      the    building's      replacement           cost   could      be
    
    increased       to    its      appraised     value,    but     did    not      recommend      an
    
    appraisal in connection with the 2009 policy renewal.
    
          As noted by the motion court, BHI produced no letters or
    
    certifications supporting its claim that GNY invited reliance on
    
                                                 51                                       A-2221-15T4
    its internal valuations that it used to determine insurability
    
    and premiums. BHI did not submit an expert report supporting its
    
    claim that GNY owed a duty to supply an accurate valuation of
    
    actual replacement costs. There is no evidence GNY made any
    
    representations       that    the     policy    limits      it     set    based    on    its
    
    inspection and valuation constituted an accurate and complete
    
    statement      of    the     full     replacement          costs       for   plaintiffs'
    
    building. Moreover, Doreen Dulowski, the only BHI employee who
    
    interacted with Wu and whose testimony was considered by the
    
    motion court, acknowledged in her deposition testimony that the
    
    most important factor in determining full replacement cost value
    
    was "an appraisal from [the] insured showing what their value is
    
    on [the] building."
    
           Thus,   BHI's      reliance     on    GNY     was    not    a     matter    of    any
    
    imbalance of sophistication in the insurance industry or any
    
    information asymmetry between the parties. See Sobotor, supra,
    
    200 N.J. Super. at 342-43 (considering that the insured was "not
    
    a   sophisticated         insurance    consumer"       in    determining          that    an
    
    insurer and its agent had an affirmative duty to advise the
    
    insured that increased coverage was available, and breached that
    
    duty   because      the    parties    were     not    equally      situated       to    make
    
    policy    decisions).         Rather,        GNY,     BHI        and     Stanton        were
    
    sophisticated parties with expertise in the insurance industry,
    
                                            52                                        A-2221-15T4
    BHI was well aware of its own independent duty to its client,
    
    see id. at 341-42, and of its own obligations under the renewal
    
    process   to   obtain    the   requisite      information,     including        an
    
    appraisal, in order to accurately assess the replacement costs
    
    for plaintiffs' building.
    
          As the motion court correctly recognized, the record is
    
    bereft of evidence that Stanton relied on any determination by
    
    GNY concerning the replacement cost of the building when he
    
    erroneously    advised     plaintiffs    in   2009   that    no    additional
    
    coverage was needed. Stanton never spoke with GNY's underwriter,
    
    Wu.   Thus,    Stanton's    deposition     testimony    concerning         GNY's
    
    alleged   actions   constitutes    inadmissible      hearsay      and   is    not
    
    competent evidence sufficient to defeat GNY's summary judgment
    
    motion. R. 1:6-6; Chicago Title Ins. Co. v. Ellis, 409 N.J.
    
    Super. 444, 457 (App. Div.) (explaining that hearsay statements
    
    "cannot be considered evidence in the summary judgment record
    
    showing a disputed issue of fact"), certif. denied, 
    200 N.J. 506
    
    (2009).
    
          In addition, the evidence showed that Stanton could not
    
    have relied upon any GNY valuation of plaintiffs' building at
    
    the time plaintiffs purchased the 2009 policy from him. First,
    
    the information submitted to BHI for the renewal of the policy
    
    indicated only that the coverage limits were based on the prior
    
                                      53                                    A-2221-15T4
    year's policy. Second, although GNY provided BHI with policy
    
    renewal information in March 2009, and the policy was renewed in
    
    April, GNY's inspection that year was not completed until late
    
    May 2009. Therefore, neither BHI nor Stanton could have relied
    
    on any Marshall-Swift or other valuation analysis conducted by
    
    GNY when Stanton advised plaintiffs that no additional insurance
    
    was    required   and    sold       them    the   deficient    2009   policy.   See
    
    Johnson, supra, 233 N.J. Super. at 62-63 (finding absent special
    
    circumstances, an insurance broker's negligence is not imputed
    
    to    the   insurer,    and    no    special      circumstances   existed    where
    
    broker was acting solely in insured's interests in evaluating
    
    its insurance needs and making recommendations).
    
           In sum, we find no reason to disturb the motion court's
    
    finding that the evidence presented was insufficient to support
    
    BHI's claim that GNY acted in a manner that imposed a duty upon
    
    GNY to provide an accurate value of the full replacement costs
    
    of the building.
    
                                                V.
    
           BHI's remaining arguments lack sufficient merit to warrant
    
    a written discussion in an opinion. R. 2:11-3(e)(1)(E). We offer
    
    only the following comments.
    
           We   reject     BHI's    contention        that   the    court   erred     in
    
    precluding BHI from asserting comparative negligence against the
    
                                               54                             A-2221-15T4
    plaintiffs at trial. BHI did not plead comparative negligence as
    
    an   affirmative         defense,      and    thus,    waived    its     right       to    the
    
    defense. R. 4:5-4; see also Brown v. Brown, 
    208 N.J. Super. 372
    ,
    
    384 (App. Div. 1986) ("[A]n affirmative defense is waived if not
    
    pleaded     or     otherwise      timely          raised.").    In     addition,          BHI's
    
    argument     that        plaintiffs       were       aware     BHI     would      rely       on
    
    comparative negligence is not supported by the record and is
    
    contradicted       by    BHI's    counsel's         representation      to     the     court.
    
    Following    the        close    of    discovery      and    denial     of   plaintiffs'
    
    summary     judgment       motion,       BHI's      counsel     stated,      "I      am     not
    
    claiming         comparative          negligence.       I'm      not      even         saying
    
    [plaintiffs]        were    negligent."            Moreover,    and     as     the        court
    
    correctly        recognized,      New     Jersey       courts    generally        preclude
    
    comparative fault defenses in professional malpractice cases,
    
    and confine allegations of a client's negligence to issues of
    
    proximate causation. Aden, supra, 169 N.J. at 75-78.
    
          We also reject BHI's argument that the court incorrectly
    
    instructed the jury that BHI had the burden of proving it relied
    
    on GNY's Marshall-Swift analysis in its determination of the
    
    replacement cost of the building. The instruction was proper
    
    because    BHI     asserted      an    affirmative      defense       that   plaintiffs'
    
    losses were caused by "third parties over whom" BHI exercised no
    
    control, and BHI argued at trial that it relied on GNY. BHI had
    
                                                 55                                      A-2221-15T4
    the burden of proving its affirmative defense. Walker Rogge,
    
    Inc. v. Chelsea Title & Guar. Co., 
    254 N.J. Super. 380
    , 387
    
    (App.   Div.   1992).   In   addition,   BHI   did   not   object   to    the
    
    proposed instruction, and we find no plain error in its use, R.
    
    2:10-2, because the jury was properly instructed concerning what
    
    plaintiffs were required to prove to sustain their cause of
    
    action against BHI. We therefore discern no basis to conclude
    
    the challenged instruction was clearly capable of producing an
    
    unjust result. Bldg. Materials Corp. of Am. v. Allstate Ins.
    
    Co., 
    424 N.J. Super. 448
    , 487 n.14 (App. Div.), certif. denied,
    
    
    212 N.J. 198
     (2012).
    
        Affirmed.
    
    
    
    
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