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Watchung Pool Supplies Inc. v. Aetna Casualty and Surety Co.

Decided: June 15, 1979.

WATCHUNG POOL SUPPLIES, INC., A NEW JERSEY CORPORATION, PLAINTIFF,
v.
THE AETNA CASUALTY AND SURETY COMPANY, A DIVISION OF AETNA LIFE AND CASUALTY COMPANY, DEFENDANT



MacKenzie, J.s.c.

Mackenzie

This declaratory judgment action, N.J.S.A. 2A:16-50 et seq. , seeks a determination of the obligation of defendant insurance company (hereinafter Aetna) as the result of a fire at one of plaintiff's (hereinafter Watchung) places of business. The applicable insurance policy, which was in full force and effect, contains a multiple location, "value reporting clause" which requires judicial interpretation. Research fails to disclose any reported New Jersey case which has considered such a provision.*fn1

Reargument of Watchung's previously denied motion for summary judgment is before the court, R. 4:46-2. The parties have stipulated that certain material facts are not controverted. The simple factual setting follows: Watchung operates a retail business of sale and service of swimming pools and accessory supplies at various New Jersey locations. The cause of action arose on July 7, 1977, when a fire destroyed Watchung's East Hanover, New Jersey, warehouse and the contents. As issued by Aetna on March 19, 1976, its three-year multi-peril policy insured this building for $50,000

and the contents against a maximum $100,000 loss. Other Watchung buildings and contents were also insured at the time of the fire under the policy. The original policy coverage was modified by a value reporting feature which had been added by endorsement on October 13, 1976. The endorsement required Watchung to advise Aetna in writing within 30 days of the end of each calendar month as to the total cash value of its inventory and other personalty stored in every warehouse. The declared value of contents then defines the insurance coverage. Coverage thus varies from month to month. The original $100,000 maximum remained as an upper limit of coverage.

Watchung understood its obligation to report the monthly value of the contents kept at each of its many buildings. Not only is the language of the policy endorsement readily understandable, but the necessity to report value was explained to the insured by its insurance agent. It was not clear, however, that Watchung recognized another policy provision limiting its coverage should value not be reported in timely fashion. In fact, a practice developed whereby Watchung forwarded value reports for all its building contents to the agent. The agent then sent the Watchung reports to Aetna. Reports, values declared and filing dates as received by Aetna follow:

Report for the

last day of Value of Contents Filed On

September 1976 $68,906. March 16, 1977

October 1976 59,347. March 16, 1977

November 1976 69,468. March 16, 1977

December 1976 71,990. March 16, 1977

January 1977 63,436. March 16, 1977

February 1977 61,932. May 12, 1977

March 1977 57,743. May 12, 1977

April 1977 65,503. May 12, 1977

May 1977 87,358. July 13, 1977

June 1977 101,976. July 13, 1977

During the nine-month period covered by the endorsement prior to the loss Watchung submitted only the April 1977

report within 30 days of the end of the prior month. Nevertheless, all the reports were accepted and filed by Aetna. No report was ever returned or rejected by Aetna nor was any notice of late submission given to Watchung prior to the fire. The only reports which appear to have been rejected during the policy ...


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