RUTGERS CASUALTY INSURANCE COMPANY v. JOHN J. SIMMERMON, III, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4485-04T24485-04T2

RUTGERS CASUALTY INSURANCE

COMPANY,

Plaintiff-Appellant,

v.

JOHN J. SIMMERMON, III,

individually and d/b/a

A-JACKS TOWING and RECOVERY,

Defendant-Respondent.

______________________________

 

Argued May 23, 2006 - Decided June 22, 2006

Before Judges Lefelt and Seltzer.

On appeal from the Superior Court of

New Jersey, Law Division, Camden

County, L-4324-03.

Rosenzweig and Cohen, attorneys for

appellant (Mark A. Baratti, on the

brief).

John E. Luby argued the cause for

respondent.

PER CURIAM

Plaintiff, Rutgers Casualty Insurance Company, appeals from a judgment rendered after a bench trial dismissing its complaint for damages and awarding towing and storage fees to defendant, John J. Simmermon III, on his counterclaim. We affirm the dismissal of plaintiff's complaint and reverse the award to defendant.

Although the issues were resolved by way of a bench trial, the relevant facts are straightforward and, for the most part, undisputed. Plaintiff was the owner of a Jeep Cherokee, having obtained title from its insured upon the payment of a theft claim. In October 2000, almost two years after the vehicle had been stolen, and almost sixteen months after plaintiff had taken title, an individual contacted defendant and reported that his Jeep had broken down and needed to be towed and repaired. Defendant towed the vehicle to his repair facility and received the authorization of the individual contacting him to make certain repairs. Although defendant took information regarding the individual, he lost his notes and the individual, who never returned for the Jeep, remains unidentified.

Defendant maintained possession of the Jeep for some three years without any attempt to locate the owner, although a motor vehicle search would have revealed plaintiff's ownership interest. In 2003, defendant decided to acquire title to the Jeep. He identified the owner and, on June 27, 2003, advised plaintiff that he had possession of the vehicle and that it might be reclaimed upon the payment of storage fees and towing costs of $26,612.70, calculated from the date defendant towed the Jeep to his facility. The notice was received by plaintiff on June 30, 2003. Plaintiff immediately contacted defendant and sought to obtain possession but defendant would not release the vehicle without payment of the claimed storage fees.

When the parties could not agree, Plaintiff filed a Verified Complaint and Order To Show Cause and an order was entered on September 19, 2003, that required defendant to return the Jeep to plaintiff. The parties continued to dispute the sums due to defendant and plaintiff filed an amended complaint seeking damages for: (a) violations of the New Jersey Insurance Fraud Prevention Act, N.J.S.A. 17:33A-1 to -14; (b) common law fraud; and (c) a violation of what plaintiff took to be defendant's duty to make a timely investigation of the ownership of the vehicle and to notify plaintiff of its location. Defendant, who had modified his demand to $1,252, representing fees calculated from the date plaintiff received notice of the Jeep's location, filed a counterclaim. The judge dismissed plaintiff's complaint and awarded defendant the $1,252 he sought.

On appeal, plaintiff presents the following five arguments:

Point I

THE TRIAL COURT ERRED AS A MATTER OF LAW BY HOLDING THAT THE NEW JERSEY INSURANCE FRAUD PREVENTION ACT DID NOT APPLY TO THE CIRCUMSTANCES UNDER WHICH SIMMERMON ATTEMPTED TO DEFRAUD RUTGERS FROM RECOVERING AN INSURED STOLEN JEEP.

Point II

THE TRIAL COURT'S RULING THAT SIMMERMON DID NOT VIOLATE THE INSURANCE FRAUD ACT WHEN HE MISREPRESENTED THAT HE HAD TOWED THE JEEP UNDER AUTHORITY OF THE MONROE TOWNSHIP POLICE AND THAT RUTGERS LEGALLY OWED OVER $26,000 IN STORAGE FEES ON THE JEEP IS AGAINST THE WEIGHT OF THE UNCONTRADICTED EVIDENCE ESTABLISHED AT TRIAL.

Point III

SIMILARLY, THE TRIAL COURT'S RULING THAT SIMMERMON DID NOT COMMIT COMMON LAW FRAUD IS ALSO AGAINST THE WEIGHT OF THE UNCONTRADICTED EVIDENCE ESTABLISHED AT TRIAL.

Point IV

THE TRIAL COURT ERRED AS A MATTER OF LAW IN HOLDING THAT SIMMERMON HAD NO LEGAL DUTY TO LOCATE THE OWNER OF THE JEEP AND NOTIFY IT THAT THE JEEP WAS AT SIMMERMON'S FACILITY.

Point V

THE TRIAL COURT ERRED AS A MATTER OF LAW WHEN IT FOUND THAT SIMMERMON COULD ASSERT A MECHANIC'S LIEN CLAIM UNDER 2A:44-21 AGAINST RUTGERS BECAUSE THE PERSON WHO ALLEGEDLY AUTHORIZED SIMMERMON TO TOW, REPAIR AND STORE THE JEEP WAS NEITHER THE JEEP'S OWNER, NOR THE JEEP OWNER'S REPRESENTATIVE.

We believe plaintiff's first three arguments have no merit and require little discussion. Our review of the judge's legal conclusions respecting those claims is de novo. Manalapan Realty L.P v. Twp. Committee, 140 N.J. 366, 378 (1995).

The trial judge ruled that the New Jersey Insurance Fraud Prevention Act (NJIFPA) does not apply. We agree. To prevail under NJIFPA, a plaintiff must show a knowingly false or misleading material statement that is made "as part of, or in support of or opposition to, a claim for payment or other benefit pursuant to an insurance policy . . . ." N.J.S.A. 17:33A-4(a)(1). We accept, for purposes of this opinion, plaintiff's assertion that defendant made false statements regarding the method by which he took possession and the amount of storage fees due.

Nevertheless, nothing in this record could support a finding that defendant's communications to plaintiff respected "a claim for payment or other benefit pursuant to an insurance policy . . . ." Plaintiff was not an insurer with respect to defendant. The fact that it made a payment to its insured in order to obtain title to the Jeep is irrelevant to its relationship with defendant, as to whom plaintiff was, at all times, no more than the owner of a motor vehicle. Said another way, defendant claimed storage fees from the owner of a motor vehicle; he did not make a claim pursuant to an insurance policy because, in fact, defendant had no insurance policy under which a claim might have been made. The judge correctly concluded NJIFPA has no applicability here.

Plaintiff's argument that defendant's false statements constitute common law fraud are equally unavailing. Although the judge did not make specific findings with respect to this claim, see R. 1:7-4, it fails as a matter of law. Plaintiff asserted that defendant misrepresented the amount due for storage. Specifically, it asserted that although defendant knew he could collect, at most, storage fees from the date plaintiff learned of the Jeep's location, he asserted an entitlement to fees from the date he took possession.

We assume that statement was false and was the type of false statement that would support a fraud claim. Plaintiff cannot, however, demonstrate that it relied upon it to its detriment. Such reliance is one of the necessary elements of fraud. Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997) (citing Jewish Ctr. of Sussex County v. Whale, 86 N.J. 619, 624-25 (1981)). Far from relying on the statement that it owed some $26,000, plaintiff immediately disputed the claim and, ultimately, filed suit to contest the claim. It is impossible to conclude on this record that plaintiff relied in any way upon any statement made by defendant. Plaintiff accordingly has failed to prove one of the essential elements of the claim, which was, therefore, properly dismissed.

Plaintiff's fourth point is somewhat more complex. It alleges that an individual storing a vehicle has a duty, arising when the vehicle is unclaimed for some unspecified period of time, to ascertain (or to confirm) the name and address of the true owner and to provide notice of the location of the vehicle to an owner who did not consent to the storage within a reasonable period of time. The judge found "no law which compels the defendant to ascertain the legal ownership of the vehicle" under those circumstances and therefore found no duty that had been breached.

Whether a duty exists is "a matter of law properly decided by the court." Wang v. Allstate Ins. Co., 125 N.J. 2, 15 (1991). "The determination of the existence of a duty ultimately is a question of fairness and policy." Snyder v. Am. Ass'n of Bloodbanks, 144 N.J. 269, 292 (1996) (citations omitted). The determination of whether to impose "a duty is the conclusion of a rather complex analysis that considers the relationship of the parties, the nature of the risk -- that is, its forseeability and severity -- and the impact the imposition of a duty would have on public policy." Dunphy v. Gregor, 136 N.J. 99, 108 (1994).

We believe the imposition of a duty requiring tow truck operators to search for the owners of vehicles stored without knowledge and with whom they, therefore, have no relationship, would impose too heavy a burden with minimal benefits. The imposition of such a duty would require every unclaimed vehicle to be the subject of a search. Even when the vehicle has been delivered by an identified person, as here, the operator would be required to determine if that person, was, in fact, the owner. Such a search would be overly burdensome. We conclude that the judge properly declined to impose a duty upon defendant.

We part company with the trial judge, however, respecting his treatment of the storage fees. The judge ruled:

Now, the Court further finds that . . . defendant had, . . . a garage-keeper's lien, which attached once Rutgers Casualty was placed on notice that . . . defendant had in his possession the stolen vehicle. [The lien arises] pursuant to N.J.S.A. 2A:44A-21.

. . . .

The Court cannot find that Mr. Simmermon did not have the right to pursue his legal right to seek compensation for storage and repairs to the vehicle.

. . . .

I find as a fact that the defendant, Mr. Simmermon, on his counterclaim, is entitled to compensation for the storage of the vehicle from the date that [notice was given to plaintiff], up and to when the police served upon him the order by Judge Orlando to release the vehicle to Rutgers Casualty [together with towing fees and sales tax].

The right to collect storage fees is contained in the Garage Keeper's Automobile Repairman Act, N.J.S.A. 2A:44-20 to

-31. Specifically, N.J.S.A. 2A:44-21 provides that "a garage keeper who shall store, maintain, keep or repair a motor vehicle . . . at the request or with the consent of the owner or his representative, shall have a lien upon the motor vehicle . . . for the sum due for such storing, maintaining, keeping or repairing of such motor vehicle . . . ."

The lien, however, is available, by the plain words of the statute, only to those who store the vehicle at "the request or with the consent of the owner . . . ." The requirement that the storage be at the request of the owner "provides an important safeguard to owners by precluding liability for unauthorized services." Gen. Elec. Capital Auto v. Violante, 180 N.J. 24, 33 (2004). Fees cannot be incurred by an owner "except by his own act." Crucible Steel Co. of Am. v. Polack Tyre & Rubber Co., 92 N.J.L. 221, 229 (E. & A. 1918). Here there was no such request or consent and, consequently the statute affords no basis for the award of storage fees.

We do not doubt that under certain circumstances the failure of an owner to move expeditiously to re-take possession of a stolen car, once its location is discovered, may support a recovery for fees on the theory of either implied consent to continued storage or quasi-contract. See Weichert Co. Realtors v. Ryan, 128 N.J. 427, 436-37 (1992). We need not consider the period of inaction after which an obligation for fees would arise because plaintiff sought immediately to recover the Jeep. Defendant cannot create a right to fees by wrongfully refusing a demand for possession.

Any other argument raised by the parties upon which we have not commented lacks sufficient merit to justify discussion in a written opinion. R. 2:11-3(e)(1)(E).

 
The dismissal of plaintiff's complaint is affirmed; the award to defendant is reversed.

Mark A. Baratti, attorney for appellant, did not appear to argue the case.

The parties disagree on the date of the filing. Plaintiff claims its complaint was filed on July 19, 2003, nineteen days after receipt of the notice from defendant. Defendant's brief asserts that the Order To Show Cause was filed on July 9, 2003 and, ultimately, re-filed on July 24, 2003 as the result of a failure to provide a complete Case Information Statement. Neither appendix contains a filed copy of the Verified Complaint although the unfiled copy contained in plaintiff's appendix shows that it was signed by counsel on July 8, 2003.

(continued)

(continued)

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A-4485-04T2

June 22, 2006