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Asbell v. Pearl Assurance Co.

Decided: February 1, 1960.


Goldmann, Conford and Freund. The opinion of the court was delivered by Conford, J.A.D.


Plaintiffs sued on two fire policies for losses resulting from two separate fires to a small, unoccupied store building in Camden, one on August 27, 1957 and the other on September 12, 1957. Judge Wick, sitting in the Law Division without a jury, allowed a recovery of $3,000 in respect to the first loss but denied the claim for the second on the ground that there had been an increase of the hazard within the scope of an exclusion clause in the policies. Plaintiffs appealed, and defendant cross-appealed, the consequent judgment, but the latter appeal has been abandoned.

The proviso of the policy invoked by the trial court for its ruling is clause (a) of the paragraph which reads as follows:

"Unless otherwise provided in writing added hereto this company shall not be liable for loss occurring (a) while the hazard is increased by any means within the control or knowledge of the insured; or (b) while a described building, whether intended for occupancy by owner or tenant, is vacant or unoccupied for a period of sixty consecutive days * * *."

The inclusion and language of this provision in fire policies is specified by statute. N.J.S.A. 17:36-5.20; and see Goldman v. Piedmont Fire Ins. Co. , 198 F.2d 712, 715 (3 Cir. 1952). In disallowing recovery for the second fire

loss the trial court acted upon the following factual showing. The premises consisted of an 11-foot-wide, two-story structure with only the ground floor usable, situated in an economically depressed area and vacant for some time when the fires occurred. Two or three days after the August fire plaintiffs sent a building contractor to board up the store in order to prevent ingress and to clean out debris. The doors and windows had been broken by the firemen in extinguishing the fire. The contractor testified to having removed some of the debris and having boarded and secured the windows and doors with plywood. Considerable debris was left unremoved, however. Plaintiffs conceded that they had not inspected the premises in order to ascertain whether or not the job was done as directed. The fire chief, who was present at the second fire, denied that the doors at that time were boarded and said they were covered only with the tar paper affixed by the firemen after the first fire. This testimony was corroborated by an insurance adjuster who visited the premises about 10 days after the first fire and found no boarding of the doors. There was also evidence to indicate that vagrants had been in the structure and made fires there in a five-gallon can before the first fire.

Plaintiffs' first appellate contention is that the action of the trial court was, in effect, to deny them recovery because of the unoccupied condition of the building; that by separate indorsement, clause (b) of the proviso quoted above had been waived by the defendant and that therefore suspension of the policy on the ostensible ground of increased hazard violated the bargained-for deletion of the 60-day vacancy clause. We do not agree. The defendant relied upon something more than mere vacancy or unoccupancy, as such, in defending on the basis of the increase of hazard clause. Leaving a structure open to the incursions of vagrants, Goldman v. Piedmont Fire Ins. Co., supra (198 F.2d , at p. 714), and failing to clean up combustible debris remaining after a prior fire with reasonable dispatch, after actual or constructive knowledge of such conditions, constitute an increase

of the fire hazard, separate and apart from such increase of hazard as may inhere in a 60-day vacancy per se. Cancellation of the stipulation as to the latter contingency did not abate the operation of the increase of hazard clause as to circumstances actually augmenting the hazard and distinct from the fact of vacancy in itself.

Plaintiffs place further reliance on the provision of the policies which states: "Any loss hereunder shall not reduce the amount of this policy." It is contended that since the first fire was a "loss" under the policy, any attribution of an increase of hazard to the existence of conditions in the property caused by the fire must in effect nullify the clause quoted, contrary to the intent of the parties. This is entirely without substance. The clause relied upon has no relevant relationship whatever to the subject matter of the increased hazard adjudicated by Judge Wick.

Next plaintiffs argue that the alleged failure to board up the property and remove debris has legal significance only to the extent that it may be considered a violation of the policy provision to the effect that:

"This Company shall not be liable for loss by fire * * * caused, directly or indirectly, by * * * (i) neglect of the insured to use all reasonable means to save and ...

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