Lewis, Carton and Mintz. The opinion of the Court was delivered by Mintz, J.A.D.
[122 NJSuper Page 128] In this declaratory judgment proceeding plaintiffs sought an adjudication of coverage under a homeowners' policy "Broad Form" issued by defendant Continental Insurance Company (Continental) to John Solomon and Bertha Solomon. Plaintiffs asserted additional claims of equitable estoppel to deny coverage, and reformation, if necessary, of the policy so as to provide coverage, indemnification
by Continental for any loss they might sustain through the negligence of Continental's agent, Dittmar Insurance Agency (Dittmar), and indemnification from Dittmar for any loss sustained because of Dittmar's negligence in obtaining the insurance coverage requested by plaintiffs.
Following a nonjury trial the judge found adversely to plaintiffs on all issues. Post-trial motions were made and denied. This appeal ensued.
In 1938 plaintiffs John and Bertha Solomon purchased property located in Howell Township consisting of 16 I/2 acres on which was situated a dwelling, a chicken coop and a hatchery. They used the dwelling for their residence and engaged in chicken farming until 1956. After that, plaintiffs raised corn on the property until 1963 or 1964. Thereafter the property was used by them for residential purposes only.
Plaintiff Eugene Solomon is the son of plaintiffs John and Bertha. He lived on the premises until July 1967, at which time he married and established a separate residence. In 1964, while residing on the premises, Eugene started a gun shop. His gunsmithing activities were conducted in a portion of one of the buildings that was formerly used as a chicken hatchery. This activity began as a hobby. However, in 1967 he grossed approximately $50,000 a year, and netted about $2000 that year from this gunsmithing business, which included the sale of guns, ammunition and shooting clothing. He attributed the small profit margin to the fact that he did most of his dealings with friends and acquaintances. It should be noted that Eugene also had full-time employment elsewhere. Eugene further testified that he had business cards, and stationery with a business letterhead on it -- "E. H. Solomon and Shooter Supplies" -- but that this stationery was used to procure orders from distributors. He did not otherwise advertise.
On November 12, 1967, four months after Eugene had changed his residence, a fire broke out in the building where Eugene carried on his gunsmithing activities. Robert Lucas
was a volunteer firearm fighting the fire. He allegedly was injured as a result of a gunpowder explosion, and filed suit against all plaintiffs seeking recovery for said injuries. This declaratory judgment proceeding was initiated upon Continental's refusal to defend the Solomons in the Lucas litigation.
Originally, plaintiffs John and Bertha Solomon did their insurance business with the Butcher Agency, which was taken over by defendant Dittmar. In 1963 Dittmar, as agent for Fidelity-Phoenix Insurance Company, issued to plaintiffs a homeowners' policy "at the suggestion" of Mr. Dittmar, a corporate officer of Dittmar.
The policy was to expire on October 11, 1966. Prior to that date Mr. and Mrs. Solomon received a letter from Dittmar pointing out that the old policy was about to expire and suggesting increased coverage. Mrs. Solomon visited Dittmar to discuss the renewal. She testified that upon arriving at the agency she was referred by Mr. Dittmar to an unidentified girl who made no other inquiry than "how many rooms are there?" and then stated that "we'll take care of everything; we'll send you the policy. You're insured for all." Significantly, Continental does not allege any misrepresentation by Mrs. Solomon or her husband in the procurement of the policy.
In due course the Continental homeowners' policy was issued, to run from October 11, 1966 to October 11, 1969. The pertinent ...