ESSEX INSURANCE COMPANY v. DIAMOND CREST MOTEL, INC.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6132-04T56132-04T5

ESSEX INSURANCE COMPANY,

Plaintiff-Appellant/

Cross-Respondent,

v.

DIAMOND CREST MOTEL, INC.,

Defendant-Respondent/

Cross-Appellant.

___________________________________

 
Telephonically argued June 7, 2006 -

Decided June 26, 2006

Before Judges Wefing, Wecker and Graves.

On appeal from the Superior Court of New

Jersey, Law Division, Hudson County,

L-6658-03.

Bruce Seidman argued the cause for appellant/

cross-respondent (Methfessel & Werbel,

attorneys; Marc L. Dembling and Mr. Seidman,

on the brief).

Ralph E. Polcari argued the cause for respondent/

cross-appellant (Drazin and Warshaw, attorneys;

Mr. Polcari, on the brief).

PER CURIAM

Plaintiff, Essex Insurance Company, appeals a final judgment entered upon a jury verdict, ordering that it provide a defense and indemnification under a certain policy of insurance issued to defendant and dismissing its complaint seeking a declaration that the policy it issued was null and void for failure to meet a condition precedent. Plaintiff also appeals the order denying its motion for judgment notwithstanding the verdict, and in its Notice of Appeal, plaintiff lists the order granting defendant attorneys' fees and costs incurred in this action. Defendant, Diamond Crest Motel, Inc., cross-appeals the denial of its motion for summary judgment ordering coverage under the policy.

Plaintiff contends first that the trial judge erred in failing to hold as a matter of law that Ferry was Diamond Crest's agent. Second, plaintiff contends that the verdict finding Ferry was not Diamond Crest's agent was against the weight of the evidence.

We have carefully reviewed the record in light of the contentions advanced on appeal and conclude that plaintiff's arguments are without sufficient merit to warrant extended discussion in a written opinion. See R. 2:11-3(e)(1). We therefore affirm, adding only these brief comments.

The coverage issue arose after Diamond Crest notified Essex, in accordance with the notice provisions of its liability policy covering the date of the accident, that a child had been injured in a fall from the motel's pool slide on August 6, 2002. Essex declined coverage and brought this declaratory judgment action.

The facts surrounding the origin of the policy are not substantially in dispute. Louis Introcaso, a principal of Diamond Crest, approached Rick Ferry, an insurance producer with whom it had dealt for some years, with a request that he "shop around" for a cheaper comprehensive liability policy covering the motel, which was located in Wildwood Crest. Ferry contacted Richard G. Munce, an agent of JIMCOR Agencies, a surplus lines carrier. Munce apparently told Ferry that he could offer a policy at an acceptable price, to be issued by Essex, as long as a slide in the motel's pool was removed. Ferry told Introcasco about the offered policy, including the slide removal. Introcaso told Ferry that he would remove the slide if necessary, but he preferred not to do so unless it was a requirement. Ferry told Munce that Diamond Crest would purchase the policy offered, and Essex issued the policy.

The parties agree that Introcaso never communicated directly with Munce, JIMCOR or Essex. The case was tried and went to the jury first on the question whether Ferry was the agent of Diamond Crest. The first question on the verdict sheet and the jury's answer were as follows:

1. Has the plaintiff (Essex Insurance Company) proven by a preponderance of the evidence that Ferry and his company were the agent of the defendant (Diamond Crest Motel) in connection with the issuance of the subject insurance policy?

Yes _____ No X Vote 6-0

If your answer is "No," stop your deliberations. A "No" answer means a judgment will be entered in favor of defendant. If your answer is "Yes," proceed to question 2.

Because the jury answered the first question in the negative, it did not reach the remaining three questions, which asked in turn whether plaintiff had proved a material misrepresentation respecting defendant's removal of the slide; if "yes," whether defendant intended plaintiff to rely upon such misrepresentation; and if "yes," whether plaintiff did so rely in issuing the policy. (The jury also was instructed after each question to stop deliberations and return its verdict if it answered "No" to the preceding question).

Essex issued its policy to Diamond Crest Motel covering the period from May 29, 2002 to May 29, 2003. The policy described the business as "motel with pool." Neither the Certificate of Insurance that was provided to Diamond Crest prior to the delivery of the policy, nor the declaration page, nor the policy itself sets forth Essex's purported "condition precedent" to the policy's issue: that the slide on the motel's pool must be removed. The Certificate of Insurance that Essex issued on May 31, 2002 described the covered "operation" as "motel with pool" and stated that the policy would issue

SUBJECT TO:

Satisfactory Inspection

Satisfactory Completed Signed Original Application

Affidavit-or-Certificate

There is no evidence that plaintiff inspected the property or received a signed application from defendant before it issued the policy, which was signed on June 5, 2002. Nonetheless, photos of the motel in evidence clearly show a slide extending from the side of the pool into the water. Essex's belated argument that it was denied inspection is immaterial in light of the open and obvious presence of the slide.

Under these circumstances, we perceive no error in the denial of plaintiff's motion for judgment notwithstanding the verdict. Plaintiff did not meet its burden to prove that it issued the policy on condition or in reliance upon defendant's material misrepresentation of fact concerning the slide. In light of our ruling on plaintiff's appeal, we have no reason to address defendant's cross-appeal.

Affirmed.

 

Plaintiff has not addressed that argument in its brief, as required by R. 2:6-2(a)(5), and we will not address it either, except to note that Rule 4:42-9(a)(6) provides for such an award.

We were informed by counsel that no complaint has been filed as yet on behalf of the injured child.

A Notice of Cancellation to be effective September 6, 2002, was mailed to Diamond Crest on August 5, 2002. The "REASON FOR CANCELLATION" that appears on the notice is "Lack of Cooperation with Inspection." Diamond Crest received the Notice on August 6, the day the child fell from the slide.

(continued)

(continued)

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A-6132-04T5

June 26, 2006