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Allstate Insurance Co. v. Meloni

Decided: December 8, 1967.


Conford, Collester and Labrecque. The opinion of the court was delivered by Labrecque, J.A.D.


Defendants Vincent Meloni and Marion Meloni appeal from a judgment declaring void a certain policy of insurance issued by plaintiff Allstate Insurance Company (Allstate).

On or about April 2, 1964 Mrs. Meloni, having purchased a used Rambler automobile, applied to Allstate for insurance coverage thereon. Its agent, Froio, called at her home with an application which, when completed, was to become part of the policy. One of the questions (declarations) contained in the application was: "With respect to the applicant or any member of his household; * * * Has any license or permit to drive any automobile been revoked, suspended, or refused?" To this question Mrs. Meloni answered, "No." When the application had been completed, and after she had allegedly "glanced" at it "briefly", she signed it. The policy here involved was subsequently issued.

Actually, Mrs. Meloni's husband Vincent had had two previous suspensions of his New Jersey driver's license, the first in December 1962 for a point system violation, and the second on January 16, 1964 for failure to maintain proof of financial responsibility. He continued to be without a driver's license during the period here involved. The Rambler which Allstate covered had been purchased in Mrs. Meloni's name in March 1964 after Mr. Meloni had disposed of a Chevrolet he owned at the time his license was suspended. At the time she applied for the insurance Mrs. Meloni told Allstate's representative that she would be the only driver, and that her husband did not have a driver's license and would not be driving.

Although at one time the policy in question was lapsed for nonpayment of premium, it was reinstated without change of terms on June 13, 1964 when Mrs. Meloni substituted a Plymouth automobile for the Rambler. She testified that at

the same time she told Froio that her husband's license had been revoked, and was thereupon informed by him that "as long as there were no deaths involved [in the loss of his license?] he would be insured." When cross-examined as a witness for plaintiff Froio denied there had been any discussion on that day concerning Mr. Meloni's use of the car.

On February 25, 1965 Mr. Meloni was involved in an accident while driving the Plymouth. Separate actions were instituted against the Melonis by Joseph G. Munger III (Munger), the driver of the other vehicle involved, for his injuries, and by Ruth Maria Rubino, administratrix ad prosequendum of Nicola Rubino (Rubino), a passenger in the Meloni car, for his death. During the course of its investigation of the accident Allstate learned for the first time of the previous suspensions of Vincent's driver's license. It thereupon filed the present declaratory judgment proceeding seeking an adjudication that the policy was void ab initio and by reason thereof it was not obligated to defend any suit brought against Vincent or Marion or to pay any judgment based thereon. Munger and Rubino were joined as defendants, but only Rubino was represented at the trial. The trial judge, sitting without a jury, resolved the issue of credibility in favor of plaintiff and determined that Mrs. Meloni had misrepresented the status of her husband's driver's license in answer to the cited question in the application; that the misrepresentation was material, and that when she made it she was aware of the fact her answers to the questions in the application were required to be forth-right. A finding of reliance by the insurer is clearly to be implied from the court's overall findings. Actually, this was conceded by counsel for defendants at the oral argument. A concomitant judgment was entered which held the policy void ab initio and absolved plaintiff from any obligation thereunder. Only the Melonis appeal.

In general, a representation by the insured, whether contained in the policy itself or in the application for insurance, will support the forfeiture of the insured's rights

under the policy if it is untruthful, material to the particular risk assumed by the insurer, and actually and reasonably relied upon by the insurer in the issuance of the policy. Merchants Indemnity Corp. of New York v. Eggleston, 68 N.J. Super. 235, 244 (App. Div. 1961), affirmed 37 N.J. 114 (1962); Citizens Casualty Company of New York v. Zambrano Trucking Co., Inc., 140 N.J. Eq. 378 (Ch. 1947), affirmed 141 N.J. Eq. 310 (E. & A. 1948).

Here the untruthfulness of Mrs. Meloni's representation is conceded, but it is contended that she was justified in assuming that the question referred to her driver's license only. The trial judge was not impressed with this contention -- nor are we. The wording of the question was clear. It referred to the applicant or any member of his household. Almost immediately below it and just above Mrs. Meloni's signature she declared:

"I declare that the statements made by me in this application, and any supplemental questionnaire hereto, are true. Fully understanding that the company may investigate the truthfulness of said statements through motor vehicle or police department records and the use of inspection services, I hereby request the Company to ...

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