JOHN T. CARLIN v. CUMBERLAND MUTUAL FIRE INSURANCE COMPANY, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5121-04T25121-04T2

JOHN T. CARLIN,

Plaintiff-Appellant,

vs.

CUMBERLAND MUTUAL FIRE

INSURANCE COMPANY, HENRY D.

YOUNG, INC., and J.R. PHILBIN

ASSOCIATES,

Defendants-Respondents.

_________________________________

 

Submitted September 20, 2006 - Decided October 25, 2006

Before Judges Hoens and Sapp-Peterson.

On appeal from the Superior Court of New Jersey, Law Division, Salem County,

L-0094-04.

Clifford L. Van Syoc, attorney for appellant (Sebastian B. Ionno, on the brief).

Basile & Testa, attorneys for respondents Cumberland Mutual Fire Insurance Company and J.R. Philbin Associates (Renee E. Scrocca, on the brief).

John Gerard Devlin & Associates, attorneys for respondent Henry D. Young, Inc. (Michael T. Malarick, on the brief).

PER CURIAM

Plaintiff John T. Carlin appeals from an April 16, 2004 order transferring venue from Atlantic to Salem County; a February 18, 2005 order denying any further discovery extensions; and three April 15, 2005 orders: (1) granting defendants' summary judgment motion dismissing plaintiff's complaint, (2) denying plaintiff's cross-motion to strike portions of defendants' brief, and (3) denying plaintiff's motion for reconsideration of the court's February 18, 2005, order. We affirm.

The complaint arises out of plaintiff's purchase of a homeowner's insurance policy from defendant Cumberland Mutual Insurance Company (Cumberland). Plaintiff purchased the policy in 1987 through defendant Henry D. Young, Inc. (Young). The policy included replacement costs coverage for personal property. On February 28, 1998, plaintiff was the victim of property theft at his home. He submitted a $12,694.26 claim to Cumberland. Cumberland sent plaintiff a Statement of Full Cost or Repair in which plaintiff was advised that the actual cash value of the loss was $4,706.04. Cumberland subsequently issued a check to plaintiff in that amount. Plaintiff's attorney returned the check, advising that it did not represent the full replacement value of the stolen property.

In a letter to plaintiff's attorney dated June 21, 2002, Cumberland's insurance adjuster, defendant J.R. Philbin Associates (Philbin), advised plaintiff that in order to receive the full benefit of the policy, plaintiff was required to expend his own funds within six months of the actual cash value settlement, which had not yet occurred as of the date of the letter.

On February 5, 2004, plaintiff filed a complaint in the Law Division, Superior Court, Atlantic County, against defendants, alleging breach of contract, fraud, and violations of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. Plaintiff claimed that the position expressed by Cumberland in the June 21, 2002 letter from Philbin was contrary to that which was represented to him at the time plaintiff purchased the policy and was therefore an unlawful sales practice under the CFA. Plaintiff also contended Cumberland's interpretation of the replacement costs provisions was inconsistent with the plain language of the policy.

Prior to filing an answer to the complaint, defendants, over plaintiff's objection, moved to transfer venue from Atlantic to Salem County. The court granted the motion. In accordance with Rule 4:5A-1, the complaint was designated as a Track I matter. As such, the parties were expected to complete the exchange of discovery within 150 days, or by August 25, 2004. By that date, discovery was still ongoing. Consequently, the parties consented to a sixty-day extension to October 24, 2004. Thereafter, plaintiff moved for an additional extension, which the court granted to December 13, 2004. When the period of time permitted for discovery ended on that date, however, the parties had not yet finished their exchange of discovery.

On January 20, 2005, plaintiff served defendants with his expert report and filed a motion to extend discovery, which defendants opposed. The court denied the motion on February 18, 2005, concluding that plaintiff had failed to establish exceptional circumstances for the relief sought. Thereafter, defendants moved for summary judgment and plaintiff cross-moved to strike portions of defendants' brief and for reconsideration of the February 18, 2005 order. The court denied plaintiff's motions but granted summary judgment dismissing the complaint against defendants. The present appeal followed.

Plaintiff raises the following points on appeal:

I. THE TRIAL COURT ERRED WHEN IT REFUSED TO STRIKE PORTIONS OF THE DEFENDANTS' STATEMENT OF MATERIAL FACTS WHICH CLEARLY VIOLATED R. 1:6-6.

II. THE TRIAL COURT ERRONEOUSLY HELD THAT THERE WERE NO DISPUTED ISSUES OF MATERIAL FACT AS TO WHETHER IT SHOULD REFORM PLAINTIFF'S HOMEOWNERS' INSURANCE POLICY.

III. THE TRIAL COURT ERRED IN HOLDING THAT THE DEFENDANTS DID NOT BREACH THE REPLACEMENT COVERAGE PROVISION IN THE INSURANCE CONTRACT.

IV. THE TRIAL COURT ERRONEOUSLY DISMISSED THE PLAINTIFF'S CONSUMER FRAUD ACT CLAIM.

V. THE TRIAL COURT ERRED BY FAILING TO GRANT THE PLAINTIFF'S MOTION TO EXTEND DISCOVERY, THEREBY IMPROPERLY BARRING HIS EXPERT'S REPORT.

VI. IN ORDER TO AVOID THE APPEARANCE OF IMPROPRIETY THIS COURT SHOULD TRANSFER VENUE BACK TO ATLANTIC COUNTY ON REMAND UNDER THE PLAIN ERROR STANDARD.

We have carefully considered all of the points raised by plaintiff. We conclude the issues presented by the plaintiff are without sufficient merit to warrant extensive discussion in this opinion, R. 2:11-3(e)(1)(E). We add only the following.

Insurance policies are contracts of adhesion and are therefore scrutinized with particularity. Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001). When there is ambiguity in the terms and conditions of the policy, the language "will be construed liberally and resolved against the insurer and in favor of coverage." Pinto v. N.J. Mfrs. Ins. Co., 365 N.J. Super. 378, 387 (App. Div. 2004), aff'd, 183 N.J. 405 (2005). In doing so, effect is given "to the 'reasonable expectations' of the insured for the purpose of rendering a 'fair interpretation' of the boundaries of insurance coverage." DiOrio v. N.J. Mfrs. Ins. Co., 79 N.J. 257, 269 (1979) (citing Kievit v. Loyal Protective Life Ins. Co., 34 N.J. 475, 482-83 (1961)).

On the other hand, notwithstanding the unequal bargaining power between an insurance company and an insured, "[i]f the policy language is clear, the policy should be interpreted as written." Nav-Its, Inc. v. Selective Ins. Co., 183 N.J. 110, 118 (2005) (citing President v. Jenkins, 180 N.J. 550, 562 (2004)). Where the terms of the policy are clear and unambiguous, it is not the function of the courts to rewrite the policy "to make a better contract for either of the parties." Gibson v. Callaghan, 158 N.J. 662, 670 (1999) (citing Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960)).

The policy provision at issue here addressed replacement costs coverage for personal property losses under the policy:

We are not liable for payment on a replacement basis until the repair or replacement is completed by you or by us . . . . You may submit a claim on an actual cash value basis and then, no later than 180 days following settlement on an actual cash value basis (or our offer of such if you decline settlement), make further claim on repair/replacement which you have, by such time, completed.

We discern no ambiguity in this language, nor does plaintiff. Rather, plaintiff claims defendants' interpretation of the replacement costs provisions is inconsistent with the plain language of the policy without pointing to any fact in the record to support this contention.

The record reveals plaintiff never read the replacement costs provisions when he first purchased the policy. "When an insured purchases an original policy of insurance he may be expected to read it and the law may fairly impose upon him such restrictions, conditions and limitations as the average insured would ascertain from such reading." Bauman v. Royal Indem. Co., 36 N.J. 12, 25 (1961). Thus, plaintiff was "chargeable with knowledge of the contents of [the] insurance policy in the absence of fraud or inequitable conduct on the part of the carrier." Edwards v. Prudential Prop. & Cas. Co., 357 N.J. Super. 196, 204 (App. Div.), certif. denied, 176 N.J. 278 (2003) (citing Merchants Indem. Corp. v. Eggleston, 37 N.J. 114, 121-22 (1962)).

We conclude that the circumstances before us do not, as plaintiff urges, present a persuasive case for reformation of the insurance policy's replacement costs provisions, consistent with his "reasonable expectations," a principle brought to bear where the terms and conditions of an insurance contract are misleading. DiOrio, supra, 79 N.J. at 269; see also Botti v. CNA Ins. Co., 361 N.J. Super. 217, 225 (App. Div. 2003).

In addition, the motion judge correctly concluded that when the facts were viewed most favorably towards plaintiff, nothing in the record supported a claim based upon bad faith or misrepresentation. As the judge noted, after plaintiff submitted his claim, Philbin sent plaintiff a proof of loss form to complete and three reminder letters, one of which included detailed instructions on how to recover replacement costs payment. In his deposition, plaintiff also acknowledged that beyond advising that the policy included replacement costs coverage, he recalled no other discussions about replacement costs with the agent who sold the policy to plaintiff. Thus, there is nothing in the record from which a reasonable jury could conclude that plaintiff was somehow misled as to the conditions for the recovery of replacement costs in connection with property losses.

Likewise, nothing in the record supports a cause of action based upon violations of the CFA, which requires proof of an "unlawful practice," meaning there must be an affirmative act, a knowing omission, or a violation of a regulation. Cox v. Sears Roebuck & Co., 138 N.J. 2, 17 (1994).

We are therefore satisfied the court properly concluded that the evidence presented by plaintiff did not create a "genuine" issue of material fact under Rule 4:46-2, sufficient to defeat summary judgment. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 542 (1995).

With respect to the remaining points raised by plaintiff, we affirm substantially for the reasons expressed by Judge Bowen in his oral opinion of February 18, 2005, and by Judge Curio in her oral opinion delivered on April 15, 2005.

Affirmed.

 

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A-5121-04T2

October 25, 2006