In Those Certain Underwriters at Lloyd’s, et al. v. National Installment Insurance Services, Inc., et al., (Del. Ch. Feb. 8, 2007), 2007 WL 458534, read opinion here, the  Chancery Court granted in part a motion for partial summary judgement regarding the liability of an insurance  broker.  See revised opinion dated April 16, 2007 at:  2007 WL 1207106 (Del. Ch., April 16, 2007).

Procedurally, the court conducted a thorough analysis of the standard for summary judgement motions that would be useful to include in a business litigator’s "toolbox". For example, the court made it clear that partial summary judgement under Rule 56(c) was possible on issues of liability alone even where there is a genuine issue of fact as to the amount of damages–that would require a trial on damages. The court  also denied a cross-motion for summary judgement that was based on the argument that damages could not be proven–at least at this stage.

The court, on the other hand, explained some policy reasons applicable to some situations when summary judgement should be precluded. For example, Rule 56 should not be applied where the legal questions presented need to be assessed in the more "highly textured factual setting of a trial" (citations omitted). Moreover, the court has discretion to deny a motion for summary judgement when it decides that a "more thorough development of the record would clarify the law or its application" (citations omitted).

Here, negligent (or equitable) misrepresentation and simple negligence was alleged against an insurance broker regarding  the insurance procured. Here is a money quote on the liability of an insurance broker:

"An agent, employed to effect insurance, must exercise such reasonable skill and ordinary diligence as may fairly be expected from a person in his profession or situation, in doing what is necessary to effect a policy, in seeing that it effectively covers the property to be insured, in selecting the insurer and so on. As a general rule, a broker or agent who, with a view to compensation for his services undertakes to procure insurance on the property of another, but fails to do so with reasonable diligence and in the exercise of due care, or produces a void or defective policy is personally liable to his principal for any damages resulting there from". (citations omitted).

Here the court found liability for the breach of the broker’s duty to communicate a material limitation of coverage in the policy procured.