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Miller v. New Jersey Insurance Underwriting Association

Decided: February 2, 1983.

ALPHONSO R. MILLER AND JEROME ROSENBERG, PLAINTIFFS-APPELLANTS,
v.
NEW JERSEY INSURANCE UNDERWRITING ASSOCIATION, DEFENDANT-RESPONDENT. ELIJAH NORWOOD AND THELMA NORWOOD, LILLIAN GILBERT AND MAURICE GILBERT, PLAINTIFFS-RESPONDENTS, V. NEW JERSEY INSURANCE UNDERWRITING ASSOCIATION, DEFENDANT-APPELLANT



On appeal from the Superior Court, Law Division, Essex County, whose opinion is reported at 177 N.J. Super. 584 (1981).

Matthews, Antell and Francis. The opinion of the court was delivered by Matthews, P.J.A.D.

Matthews

I(A)

Plaintiff Alphonso Miller appeals from the trial judge's award of $4,500, representing his insurable interest in property foreclosed by the City of Newark for nonpayment of taxes. He claims the award is inadequate. Plaintiff Rosenberg, who claimed to be a mortgagee on the property, appeals from the judge's finding that he did not have a mortgage or any other financial interest in the property.

When Miller's property was damaged by fire, he sought to recover under a fire insurance policy with defendant. However, prior to the date of the fire the City of Newark had completed tax foreclosure proceedings and obtained a judgment. When defendant learned that the City of Newark was the title owner, it refused to pay on its policy and plaintiffs instituted this action.

In his complaint plaintiff Miller alleged that defendant New Jersey Insurance Underwriting Association (NJIUA) had issued to him a loss-by-fire insurance policy in the amount of $30,000 for the building located at 226 Springfield Avenue, Newark. Jerome Rosenberg was allegedly named as mortgagee in the policy. Plaintiffs alleged that on or about October 21, 1975, while the insurance policy was in force, the building suffered damage by fire and that plaintiff Miller became entitled to the $30,000. Plaintiffs further alleged that defendant had agreed to make payment in the sum of $18,323.50, but that it had thereafter refused to pay that sum. Consequently, plaintiffs sought damages in the alternative of $18,323.50 or $30,000.

In its answer defendant admitted issuance of the policy, the fact of the fire, and that Jerome Rosenberg was named as mortgagee. As a second separate defense, however, defendant alleged that plaintiffs had no insurable interest in the subject property at the time of the loss. The trial judge granted defendant's motion for summary judgment, and this court affirmed

(with one judge dissenting), on the basis that Miller had no insurable interest in the property.

The Supreme Court reversed, Miller v. N.J. Ins. Underwriting Ass'n, 82 N.J. 594, 599 (1980), holding that plaintiff Miller had retained an insurable interest in the property although title had been lost to the City of Newark. The court remanded to give plaintiffs an opportunity to prove the value of their interests. Id. at 602-603.

The matter was heard on November 26, December 1 and December 3, 1980 before Judge Yanoff. He granted defendant's motion for dismissal of Rosenberg's claim at the close of plaintiffs' case, finding as fact that there was no mortgage on the subject property. Miller v. N.J. Ins. Underwriting Ass'n, 177 N.J. Super. 584 (Law Div.1981).

Judge Yanoff assessed Miller's interest in the property at the time of the fire to be $4,500.

I(B)

Plaintiffs Norwood instituted their action alleging that defendant had issued them a policy of insurance for loss by fire on a building located at 584 Springfield Avenue in Newark for the amount of $20,000. Plaintiffs alleged that while the policy was in effect the building had been damaged by a fire, on or about May 30, 1977. They sought judgment awarding the full amount of the policy.

In a second count Lillian and Maurice Gilbert, alleging that they were named as mortgagees on the policy, claimed the proceeds.

Defendant admitted issuance of the policy to the Norwoods and that the property insured had sustained damage by fire on or about May 30, 1977. Defendant also admitted that the Gilberts were shown on the policy as mortgagees. Defendant alleged in separate defenses that plaintiffs had failed to join indispensable parties, to allege a cause of action against it and to comply with the policy conditions precedent and subsequent.

Defendant also alleged that plaintiffs had no insurable interest in the subject property at the time of loss.

The trial court's grant of summary judgment in favor of defendant and this court's affirmance were reversed in Miller v. N.J. Ins. Underwriting Ass'n, 82 N.J. 594 (1980). As in Miller, the court found that plaintiffs' insurable interest in the property had not been destroyed because of Newark's tax foreclosure where plaintiffs had not received actual notice of Newark's action. 82 N.J. at 599-600. Thus, the court remanded to give plaintiffs an opportunity "to show the pecuniary value of their interests." Id. at 602.

In an oral decision delivered following testimony on remand, Judge Yanoff found that the Norwoods' reasonable expectancy at the time of fire was $13,332. He also found that Lillian Gilbert was entitled to the amount due on the mortgage out of the Norwoods' recovery. He reserved on plaintiffs' request for prejudgment interest and counsel fees.

In an opinion published at 177 N.J. Super. 584 (Law Div.1981), Judge Yanoff awarded the Gilberts counsel fees and prejudgment interest, at 588-590, but rejected the Norwoods' similar claims, at 587-588.

In the final judgment dated January 29, 1981 Lillian Gilbert*fn1 was awarded $5,142.12 plus interest from August 9, 1977 and $1,700 in counsel fees, for a total sum of $8,202.22. The Norwoods were awarded $8,189.88.

In response to objections by counsel, the final judgment was amended on February 26, 1981 so that interest awarded Lillian Gilbert was measured from September 9, 1977 (one month after institution of the action). The total amount of judgment in favor of Gilbert, however, remained unchanged.

Defendant filed a notice of appeal from the whole of the final judgment on March 9, 1981. The Norwoods filed a cross-appeal from the portion of the judgment denying their request for counsel fees, interest and costs.

II(A)

Plaintiffs argue that the trial judge erred in failing to find Rosenberg had a mortgage in the amount of $9,000 on the property, as testified to by both Miller and Rosenberg, and in disregarding the law that the seller has a vendor's lien for the unpaid purchase price equivalent to a mortgage. They argue that defendant waived the statute of frauds defense and that Miller acknowledged a promise to give a mortgage on the subject property. Plaintiffs also point out that the insurance policy names Rosenberg as mortgagee. They contend that denying Rosenberg "his recovery" gives the insurance company a windfall. Finally, they maintain that Rosenberg's vendor's lien is enforceable against defendant because it had notice of the mortgage.

Judge Yanoff granted defendant's motion for involuntary dismissal of Rosenberg's claim at the close of plaintiffs' case. He rejected Miller's and Rosenberg's contentions that an agreement contemporaneous with the purchase agreement had been entered into requiring Miller to give Rosenberg a mortgage on the 226 Springfield Avenue property. ...


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