DEBRA ALLYN NOWAKOWSKI v. SELECTIVE WAY INSURANCE COMPANY

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.




                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-5416-15T1

DEBRA ALLYN NOWAKOWSKI,
EXECUTRIX OF THE ESTATE
OF JESUS SANTIAGO, t/a
CAR CRAFT AUDIO AND CAR
CRAFT AUTO CORP.,

        Plaintiffs-Appellants,

v.

SELECTIVE WAY INSURANCE
COMPANY, a New Jersey
Corporation,

        Defendant-Respondent,

and

RICHARDS & SUMMERS, INC.,
a New Jersey Corporation;
THE LYNOXX GROUP, LLC, a New
Jersey Limited Liability
Corporation; TOWN OF DOVER, a
Municipal Corporation, ALLEN
BELL, JR., FIRE CHIEF JON FILOSA,
and TOWN OF DOVER FIRE DEPARTMENT,

     Defendants.
_________________________________

              Argued November 28, 2017 – Decided December 12, 2017

              Before Judges Fasciale and Sumners.
            On appeal from Superior Court of New Jersey,
            Law Division, Middlesex County, Docket No. L-
            0908-13.

            Edward H. Lee argued the cause for appellants
            (Mindas & Morris, LLC, attorneys; Edward H.
            Lee, on the brief).

            Eric G. Siegel argued the cause for respondent
            (McElroy, Deutsch, Mulvaney & Carpenter, LLP,
            attorneys; Michael J. Marone, of counsel and
            on the brief; Eric G. Siegel, on the brief).

PER CURIAM

     Debra Allyn Nowakowski (a/k/a Debra Allyn Koeppel) (Koeppel),

Executrix of the Estate of Jesus Santiago (Santiago), t/a Car

Craft Audio and Car Craft Auto Corp. (Car Craft) (collectively

plaintiffs) appeal from a December 4, 2015 order granting summary

judgment to defendant Selective Way Insurance Company (Selective);

and a July 8, 2016 order denying reconsideration.1                     The judge

determined   that   Selective    had   properly   canceled        a   policy    of

insurance    for   non-payment   of    premiums   and,   as   a       result,    he

dismissed the complaint in its entirety.          We affirm.

     When reviewing an order granting summary judgment, we apply

"the same standard governing the trial court."           Oyola v. Liu, 
431 N.J. Super. 493, 497 (App. Div.), certif. denied, 
216 N.J. 86

(2013).   We owe no deference to the motion judge's conclusions on



1
    In entering these orders, the judge denied plaintiffs' motion
for partial summary judgment.

                                       2                                 A-5416-15T1
issues of law.   Manalapan Realty, L.P. v. Twp. Comm. of Manalapan,


140 N.J. 366, 378 (1995).       In affirming the orders under review,

we look at the facts in the light most favorable to plaintiffs.

Here, we are mindful that plaintiffs had moved for the same relief,

at least on the cancellation issue, implying the parties believed

that    resolution   of   the   motions    involved   a   legal   question.

Nevertheless, we recite the facts giving plaintiffs the benefit

of all reasonable inferences.

       Selective issued a commercial insurance policy to Santiago

for the period of February 19, 2011 through February 19, 2012.             On

or about February 28, 2012, Selective prepared an invoice for the

renewal of the policy for one additional year.                The invoice

notified plaintiffs that a renewal premium was due on March 19,

2012.

       Koeppel had been married to Santiago, who passed away in

March 2014.    Koeppel acted as Santiago's operations manager and

handled Car Craft's insurance needs.         She testified that she and

Santiago knew payment was due on March 19, 2012.              Plaintiffs,

however, did not make the payment on purpose.

       On March 24, 2012, Selective issued a cancellation notice to

plaintiffs.   The notice stated that Selective would "continue [the

insurance] coverage without lapse if full payment is received

prior to [April 10, 2012]."              Koeppel testified that she and

                                     3                             A-5416-15T1
Santiago received the cancellation notice and intended not to make

the payment.      Koeppel corroborated this intention by candidly

admitting in her deposition testimony that "we were letting all

policies lapse."2

     In addition to Koeppel, plaintiffs (Santiago and Car Craft)

confirmed   their    unwillingness       to   make   any   further   premium

payments.   Plaintiffs state in paragraph twelve of the statement

of facts of their merits brief that "upon receipt of the premium

bill . . . with respect to the renewal of the policy, [p]laintiff

was not intending to pay same."       Selective therefore canceled the

policy after plaintiffs failed to make the requisite premium

payment.    On April 14, 2012, a fire occurred at Car Craft.

Selective declined insurance coverage on the fire loss for non-

payment of premiums.

     Plaintiffs     filed   this   complaint    alleging   four   causes     of

action against Selective: improper cancellation of the policy;

interference with Santiago's ability to secure insurance on the

date of loss; breach of the covenant of good faith and fair

dealing; and violation of the Consumer Fraud Act (CFA), N.J.S.A.





2 In March 2012, Selective also canceled plaintiffs' homeowners'
insurance policy for non-payment of premiums.



                                     4                               A-5416-15T1
56:8-1    to    -20.3     Selective       cross-moved    for   summary   judgment

contending that the undisputed facts demonstrated that it was

entitled to judgment as a matter of law.                 The judge agreed and

entered the orders under review.

      On appeal, plaintiffs argue that Selective failed to strictly

comply with the applicable statutory and regulatory provisions as

to the cancellation of the policy.                 In the event we disagree,

plaintiffs       assert   that    the      judge   mistakenly    dismissed     the

remaining causes of action.               Plaintiffs contend therefore the

judge erred by concluding that there could be no bad faith or CFA

violations once he determined that Selective properly canceled the

policy.

      Ordinarily, the cancellation of an insurance policy must

strictly       comply   with   the    statutory    requirements    of    
N.J.S.A.

17:29C-10.       "An insured need not actually receive a cancellation

notice in order for it to be effective, provided that the statutory

proof of mailing has been satisfied."               Hodges v. Pa. Nat'l Ins.

Co., 
260 N.J. Super. 217, 222-23 (App. Div. 1992) (citing Weathers

v.   Hartford     Ins.    Grp.,      
77 N.J.   228,   233-34   (1978)).      The

determinative factor is the mailing of the notice, not its receipt.

Needham v. N.J. Ins. Underwriting Ass'n, 
230 N.J. Super. 358, 369


3
    Plaintiffs had named other defendants in their pleadings, but
have since settled or dismissed the complaint against them.

                                           5                             A-5416-15T1
(App. Div. 1989).      Here, plaintiffs maintain that Selective did

not procure a certified mail return receipt card.            We accept that

contention for the purpose of this opinion.           However, there are

exceptions to the general rule that there be strict statutory

compliance.

     In general, courts have not required such compliance where

the insured admits receipt of the cancellation notice.              Pawlick

v. N.J. Auto. Full Ins. Underwriting Ass'n, 
284 N.J. Super. 629,

634 (App. Div. 1995).       Here, plaintiffs admitted they purposefully

declined to pay the premiums.          According to Koeppel, the failure

to pay the premiums meant Santiago and Car Craft were "out of

insurance."    She further testified that "I understand that th[e]

policy . . . was no longer paid.        Policy No. S1757545 was no longer

my policy.    [Selective was] not going to help me if anything had

happened."

     Koeppel, who testified as Santiago's operations manager and

the individual responsible for handling Car Craft's insurance

needs   and   whose   testimony   constitutes     statements   by   a   party

opponent   pursuant    to   N.J.R.E.    803(b),   candidly   admitted    that

plaintiffs deliberately decided not to pay the premium and let the

policy lapse.     As to the March 24, 2012 cancellation notice,

Koeppel testified:



                                       6                            A-5416-15T1
          Q. . . . And you said you and [Santiago] both
          read this document together?

          A. Yes.   We were aware.

          Q. . . . And so you understood that this
          document was saying that . . . failure to pay
          will result in the cancellation of your
          policy?

          A. Correct.

               . . . .

          Q. . . . And it also indicated that [Selective
          had] not received your payment of $1,372.00
          due [March 19, 2012].     [The notice stated]
          [w]e will continue your coverage without lapse
          if full payment is received prior to [April
          10, 2012]. You read and understood that?

          A. Yes.

          Q. . . . And you did not pay that premium at
          any time before April 10, 2012, did you?

          A. Correct.    No, we did not.

The record reflects, and we emphasize that plaintiffs concede on

appeal, that plaintiffs chose not to pay the premium knowing that

Selective would cancel the policy.

     We conclude that plaintiffs' remaining arguments are without

sufficient merit to warrant discussion in a written opinion.       R.

2:11-3(e)(1)(E).    We add the following brief comments.

     Plaintiffs were uninsured on the date of loss because they

decided to let the policy lapse, and because they declined payment

for insurance from another insurance company.   Likewise, there is

                                 7                         A-5416-15T1
no credible evidence on this record that Selective engaged in bad

faith, and plaintiffs have failed to make out a prima facie case

of a violation under the CFA, assuming it even applies to the

facts of this case.

     Affirmed.




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