For reversal and remandment -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Schettino and Haneman. For affirmance -- Justice Hall. The opinion of the court was delivered by Schettino, J. Hall, J. (dissenting).
[56 NJ Page 516] Plaintiffs instituted suit in the Superior Court, Law Division, seeking recovery from defendant insurer for damages caused by fire to their home.*fn1 An answer was filed on behalf of defendant asserting the statute of limitations as an affirmative defense. Thereafter, defendant moved for summary judgment based upon the pleadings, plaintiff Arthur A. Peloso's answers to interrogatories, and an affidavit of defendant's counsel. The trial court, finding that no genuine issue regarding any material fact existed and that the complaint had not been filed within the applicable one-year period of limitation, granted defendant's motion
for summary judgment. (102 N.J. Super. 357 (Law Div. 1969)). The Appellate Division affirmed in a per curiam opinion (105 N.J. Super. 474 (App. Div. 1969)), and we certified on plaintiffs' application. (54 N.J. 253 (1969)).
Plaintiffs are the owners of a multiple dwelling located in the Borough of Belmar. On or about October 20, 1964, defendant issued a three-year insurance policy covering the multiple dwelling and its contents against loss resulting from fire. The policy contained the standard statutory period of limitation as required by N.J.S.A. 17:36-5.20, which provides:
No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless . . . commenced within twelve months next after inception of the loss.
On September 12 and 13, 1965, the premises in question were damaged by fire. Plaintiffs gave defendant prompt notice of the fire and the resultant damage.*fn2
Defendant then advised plaintiffs that it intended to investigate the claim, following which notice would be given of its decision. Between November 1965 and March 1966, plaintiffs were informed by defendant, in response to inquiries made by them regarding their claim, that the claim was being investigated. In February 1966, plaintiffs' counsel informed defendant in writing that suit would be commenced unless the claim was immediately adjusted. In response, defendant notified plaintiffs in writing to submit to depositions regarding the details of the fire as required by the policy. Plaintiffs did so on April 6, 1966.
On May 11, 1966, plaintiffs' counsel telephoned defendant's attorney, who told him that defendant would be advised
to reject the claim and that plaintiffs should start suit on the policy. On June 13, 1966, plaintiff husband, who was no longer represented by counsel, called defendant's attorney, who advised plaintiff that defendant was denying liability on his claim. When plaintiff husband requested that the denial of liability be put in writing, defendant's counsel did so by letter dated June 15, 1966, in which he said that pursuant to reports furnished by him to defendant, liability would be "declined insofar as the loss of September 12-13, 1965 is concerned. Please be guided accordingly."
In July 1966, defendant's position was reaffirmed by its counsel in telephone conversations with plaintiff husband. The latter ended their final conversation on July 21, 1966, by stating that he would sue, and was told in turn that this would be the appropriate course to take.
Plaintiffs did nothing further about their claim until March 10, 1967, when they instituted this action to recover for their loss. Their complaint was filed some 18 months after the date of the fire and approximately 9 months after plaintiffs had received the letter of June 15, 1966, formally denying liability.
Before the Law Division, plaintiffs resisted the motion for summary judgment on two grounds, which they again raise on appeal. They contend that the statute of limitation did not begin to run until June 15, 1966, when liability was formally declined and that therefore their suit is timely. Alternatively, they argue that if suit was required within 12 months from the date of the fire, recovery should not be barred because defendant ...