RAMON MERCEDES v. RUTGERS CASUALTY INSURANCE COMPANY

NOT FOR PUBLICATION WITHOUT THE
                  APPROVAL OF THE APPELLATE DIVISION

                                     SUPERIOR COURT OF NEW JERSEY
                                     APPELLATE DIVISION
                                     DOCKET NO. A-0377-09T3



RAMON MERCEDES,

     Plaintiff-Respondent,

v.

RUTGERS CASUALTY INSURANCE COMPANY,

     Defendant-Appellant.
_________________________________________

         Argued May 11, 2010 - Decided May 26, 2010

         Before Judges Grall and LeWinn.

         On appeal from Superior Court of New
         Jersey, Law Division, Hudson County,
         Docket No. L-5972-07.

         Lisa Z. Slotkin argued the cause for
         appellant (Zarwin, Baum, DeVito, Kaplan,
         Schaer & Toddy, P.C., attorneys; Ms.
         Slotkin and Manny J. Alvelo, on the
         brief).

         Jeffrey A. Bronster, attorney for
         respondent.

PER CURIAM

     Defendant Rutgers Casualty Insurance Company appeals from a

jury verdict in favor of plaintiff Ramon Mercedes on his claim

that Rutgers breached a contract of homeowner's insurance by

denying him coverage for property damage caused by a fire that

started on his neighbor's property.1      The jurors rejected

Rutgers' claim that Mercedes' application included a material

misrepresentation and determined that Rutgers had not delivered

the policy upon which it relied to deny coverage.       Rutgers

objects to the jury instructions and the verdict sheet.         Finding

no merit in these arguments, we affirm.

     On September 27, 2006, Mercedes applied for a policy of

homeowner's insurance to cover a two-family dwelling in Bayonne

he had contracted to purchase.    When he applied for the policy,

Mercedes intended to reside in one unit with his girlfriend and

rent the other.    The real estate transaction was closed in

October 2006.    Thereafter, Mercedes commenced renovations, and

his girlfriend ended their relationship.       Mercedes determined

that he would not be able to cover expenses without his

girlfriend's assistance until the summer of 2007, when members

of his family would be able to assume occupancy with him and

share costs.    For that reason, he leased both units on a month-

to-month basis.

     The policy was issued to cover the period from September

28, 2006 to September 28, 2007.       According to Mercedes'


     1
          Rutgers filed a third-party complaint against the
owner of the adjacent property, which was dismissed for lack of
service and subsequently abandoned when Rutgers learned that the
property owner was "most likely judgment proof."



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testimony at trial, he received the declarations page from his

broker, but he never received the policy.   The declarations page

included a specification of the policy period, the coverages

afforded and the policy limits.

    The declarations page does not recite the policy

provisions, which are incorporated by reference.    Under the

terms of the policy, the premises insured is a "[r]esidence

premises," a term which is defined to include a "two, three or

four family dwelling" in which the insured "reside[s] in at

least one of the family units."

    The fire that damaged Mercedes' two-family dwelling broke

out on his neighbor's property on April 1, 2007.    At that time,

both units were occupied by Mercedes' tenants.     Rutgers denied

coverage.

    Mercedes filed a complaint alleging that Rutgers' denial of

coverage was a breach of the insurance contract.    Rutgers filed

a counterclaim.   Rutgers alleged that it was not obligated to

provide coverage because Mercedes misrepresented his intention

to reside in the dwelling when he applied for the policy.     In

the alternative, Rutgers contended that no coverage was due

under the policy because Mercedes did not reside in one of the

units.




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                                  3

     At trial, Mercedes denied any knowing misrepresentation and

asserted that Rutgers failed to deliver the policy to him.     That

is the only document indicating that coverage under the policy

is conditioned upon Mercedes' residing in one of the units.

Celeste Paslay, the supervisor of Rutgers' mail room, testified

on behalf of her employer as to the delivery practices regularly

employed by Rutgers upon issuance of a new policy.    She

explained that the declarations page and policy are mailed

together to the insured.     There was no evidence of a record held

by Rutgers indicating a mailing to Mercedes, and there was no

record indicating the return of any mail sent to him, which

Rutgers would have kept if the policy had been mailed and

returned.

     The jury determined that Mercedes established a breach by

Rutgers and that Rutgers failed to establish a misrepresentation

by Mercedes.

     On appeal, Rutgers contends that delivery was not a

material question for determination by the jury because the

caption on the declarations page -- "HOMEOWNER POLICY PROGRAM" --

is sufficient as a matter of law to give the insured notice that

the policy is issued to one who owns a structure and makes that

structure his or her home.    Even if we were to assume that

delivery of a declarations page could satisfy the insurer's




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obligation to give notice of this limitation on coverage for his

two-family dwelling, we could not conclude, as Rutgers urges,

that use of the caption "HOMEOWNER POLICY PROGRAM" is sufficient

to alert an insured that coverage is unavailable to an insured

who owns a two-family home but rents both units.   The plain and

ordinary meaning of the term "homeowner" does not, as Rutgers

argues, exclude a person who rents a residence he or she owns.

See Zacarias v. Allstate Ins. Co., 
168 N.J. 590, 595 (2001)

(requiring an interpretation of insurance policies in accordance

with the plain meaning of the terms and consistent with the

"reasonable expectations" of the insured).

    Rutgers also contends that the judge's instruction to the

jury did not give an adequate explanation of an insurer's

obligations with respect to delivery.   During the charge

conference, the attorney for Rutgers did not alert the court to

additional language that should be included in the charge.

Rather, in an attempt to distinguish Sears Mortgage Corp. v.

Rose, 
134 N.J. 326 (1993), a case involving title insurance,

the attorney for Rutgers argued:

         I would suggest that there are other
         circumstances where it may be okay to
         provide a copy of a policy to some agent of
         the insured. I -- I feel that what we're
         doing here by instructing the jury, we're
         giving them something that is very
         definitive, and that's not the status of the




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         law. It is not this definitive no-
         exceptions circumstance.

              I think that it may be too tedious to
         give them all of the exceptions that exist
         out there, and that the better alternative
         would be not to instruct them on the
         delivery of the policy issue at all.

    When asked, at oral argument on this appeal, to identify

information that was erroneously included in or omitted from the

jury instruction on delivery, counsel for Rutgers indicated that

the error was in giving the charge not its content.    The

implicit assertion is that Rutgers could rely on a provision of

a policy it did not deliver to justify the denial of coverage

specified on a declarations page received by the insured.      The

argument lacks sufficient merit to warrant any further

discussion.   R. 2:11-3(e)(1)(E); see Zacarias, supra, 
168 N.J.

at 602-04 (discussing interpretation of declarations pages and

policy provisions).

    Finally, Rutgers contends, for the first time on appeal,

that the verdict sheet was confusingly inadequate because it did

not call for the jury to make a specific finding on delivery.

Rutgers' denial of coverage was undisputed; the only factual

dispute relevant to Rutgers' breach was whether Rutgers had

delivered the policy upon which it relied.   In this

circumstance, the omission of a specific question about delivery




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from the verdict sheet was not error; obviously, it was not

error "clearly capable of producing an unjust result."

R. 2:10-2.

    Affirmed.




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