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Last v. West American Insurance Co.

Decided: February 24, 1976.

RAYMOND A. LAST, PLAINTIFF-APPELLANT,
v.
WEST AMERICAN INSURANCE COMPANY, DEFENDANT-RESPONDENT



Fritz, Seidman and Milmed. The opinion of the court was delivered by Seidman, J.A.D.

Seidman

[139 NJSuper Page 458] The issue involved in this case is whether a personal property fire loss sustained by plaintiff was excluded from a homeowner's insurance policy issued by defendant as "property carried or held as samples or for sale or for delivery after sale." Plaintiff brought suit to recover the amount of the loss after the insurance company rejected the claim; defendant filed an answer setting forth the exclusion as a defense, and both thereafter moved for summary judgment. After hearing argument the trial judge found that the exclusionary language in the policy was unambiguous and applicable to the facts presented, and judgment was entered in favor of defendant. Plaintiff appealed.

Essentially, the facts are not in dispute. Plaintiff owned two rifles which he had acquired "as a huntsman, hobbyist and skeet shooter." Their total value, including the gun cases, was stated to be $1510. In July 1973 he delivered the rifles "on consignment" to Sportsmen's Development Corp., a distributor of arms, ammunition and shooters' supplies, for the express purpose of having them sold. Before a sale was effectuated the guns were destroyed by fire. The record before us does not reveal the date of the occurrence, but the proof of loss was furnished the insurance company on November 8, 1973. Plaintiff made no use of the rifles during this period.

The homeowner's policy issued by defendant, in effect at the time of the loss, covered unscheduled personal property, subject, however, to eight exclusions, the one pertinent here being "property carried or held as samples or for sale or for delivery after sale."

Plaintiff contends that he was entitled to a judgment as a matter of law. He argues that the clause in question has a business connotation which, when read in conjunction with the other terms in the provision, "has an overwhelming effect of being directed toward business property." His ownership and use of the guns, he urges, were unrelated to any business or profit-making endeavor, and their availability for sale was inherently in connection with his participation in his hobby or sport. He points to a prior instance when, after placing one of the guns for sale, he withdrew it from consignment to make personal use of it in skeet shooting. Plaintiff also asserts that the language of an insurance policy is to be interpreted liberally in favor of the insured and that the provisions in issue here are of sufficient latitude to allow an insured to draw the conclusion that personal property related to a business endeavor is not covered and that all other personal property is covered.

The position of the insurance company is that the terms of its policy are plain and unambiguous and excludes from coverage the loss here involved.

There are no reported New Jersey cases construing similar exclusionary language and there is but a handful of cases on the subject elsewhere.

It is, of course, basic that insurance contracts are to be liberally construed in favor of the insured, and if the language of a policy will fairly support two meanings, an interpretation in support of coverage will be applied. Kievit v. Loyal Protective Life Ins. Co. , 34 N.J. 475, 482 (1961); Corcoran v. Hartford Ins. Co. , 132 N.J. Super. 234, 243 (App. Div. 1975); Boonton Handbag Co. v. Home Ins. Co. , 125 N.J. Super. 287, 290 (App. Div. 1973). We also recognize that exclusionary clauses are to be given a strict interpretation. Butler v. Bonner & Barnewall, Inc. , 56 N.J. 567, 576 (1970). Yet these rules of construction cannot be applied in disregard of exclusionary language the import and intent of which is clear. Westchester Fire Ins. Co. v. Continental Ins. Co. , 126 N.J. Super. 29, 41 (App. Div. 1973), aff'd o.b. 65 N.J. 152 (1974). We will not rewrite a policy or create a better one than that which the insured purchased. Kampf v. Franklin Life Ins. Co. , 33 N.J. 36, 43 (1960); Boonton Handbag Co., supra , 125 N.J. Super. at 290.

The exclusion in question appears to have a plain meaning which is not subject to a "business" property limitation. It clearly relates broadly to unscheduled personal property held for sale (whether on or off the premises is immaterial). While in any given situation that which is held for sale may constitute business property, this does not mean that the exclusion relates solely to such property, particularly in view of the additional provision in the policy specifically excluding "business property away from the described premises." The fact that exclusions may overlap does not justify a conclusion that they deal with identical subject matter.

We are not persuaded by plaintiff's additional contention that the sale was incidental to his personal use of the rifles.

Their delivery on consignment to the distributor had no purpose other than their sale, and the rifles were in the possession of the consignee for more than three months from the ...


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