On appeal from the Superior Court of New Jersey, Law Division, Camden County.
Michels, Long and Muir, Jr. The opinion of the court was delivered by Michels, P.J.A.D.
Defendant New Jersey Insurance Underwriting Association (Association) appeals from a judgment of the Law Division that awarded plaintiff Donna Needham damages in the amount of $38,594.57 in this fire insurance case. Plaintiff cross-appeals.
The facts giving rise to this action may be summarized as follows: In November 1985, plaintiff, who resided with her husband Thomas Needham at 3065 South Atlanta Road in Camden, New Jersey, purchased a single family home located at 801 Crown Point Road in Westville, New Jersey, with the intention of converting it into a rental duplex. Plaintiff asked her husband, who was manager of her restaurant-lounge, to obtain fire insurance for the property. She gave him permission to sign her name to any necessary forms.
On November 6, 1985, Mr. Needham contacted defendant James Reyes (Reyes), an insurance broker doing business under the name Regency Insurance Company. Mr. Needham had obtained insurance coverage for plaintiff's restaurant-lounge through Reyes. Mr. Needham went to Reyes' office on November 7, 1985, to sign the insurance forms. The paperwork was not completed when he arrived, however, so he signed his wife's name to a blank insurance application and provided Reyes with the information necessary to complete the application. Mr. Needham also asked Reyes to arrange financing for a portion of the insurance premium. To this end, Reyes filled out a financing agreement form that had been supplied by defendant Security Pacific Insurance Premium Financing, Inc. (Security Pacific). Mr. Needham signed his wife's name to the form and gave Reyes a check for $135.00 as a deposit for the insurance. At this time Reyes signed a Security Pacific draft in the
amount of $229.00. This amount was the total required premium on the fire insurance policy.
On November 15, 1985, the Association received the application for insurance, a copy of the Security Pacific financing agreement and the Security Pacific draft. Mr. Cassels, Association's claims manager, testified that the application indicated that the insured property was located at 801 Crown Point Road in Westville, New Jersey. The mailing address for plaintiff-insured was listed as 3065 South Atlantic Road, Camden, New Jersey. Plaintiff's correct address, however, is 3065 South Atlanta Road, Camden, New Jersey. The Security Pacific draft was accepted as full payment of the premium and the Association issued a fire insurance policy covering plaintiff's property on November 26, 1985. Plaintiff received the policy through the mail in spite of the fact that it bore an incorrect address.
The Security Pacific draft was deposited into the Association's premium account. It made its way through the banking system until it was returned to Security Pacific for approval. The draft was rejected when Security Pacific's business manager was unable to match the draft to a corresponding financing agreement which normally would have been provided by the broker. The draft department at Security Pacific stamped "DO NOT PRESENT AGAIN" and "RETURN FOR ENDORSEMENT" on the draft and returned it to the bank. Once the Association received the dishonored draft it implemented an "account cancellation". This procedure results in a notice of cancellation being mailed to both the insured party and the broker.
Esther White, the Association employee responsible for reviewing notices of cancellation, testified as to the standard procedure used in preparing and mailing notices of cancellation. A notice of cancellation is prepared on a multicopy form. The name and address of the insured party is on the top of the form and the name and address of the broker is on the bottom of the form. When a notice of cancellation is sent to an insured party,
a copy of that notice is also sent to the broker. Ms. White further testified that on December 11, 1985, she personally reviewed a notice of cancellation that was addressed to plaintiff at 3065 South Atlantic Road. She made certain that the address and policy amount corresponded to the information provided on the insurance application and she signed the notice. She sorted the copies and placed them in windowed envelopes with the addresses of plaintiff and Reyes showing through the windows of the respective envelopes. She put stamps on the certificates of mailing and handed the certificates and the envelopes containing the notice to the mail clerk who was responsible for carrying the certificates and envelopes across the street to the post office. The mail clerk returned a short time later and gave Ms. White the postmarked certificates of mailing. She attached these certificates to the office copy of the notice of cancellation and made a notation of the time on the office copy.
On April 24, 1986, a fire caused extensive damage to plaintiff's newly renovated building. At trial, plaintiff and her husband both testified that they assumed the building was insured because they had not received a notice of cancellation. Plaintiff acknowledged, however, that she received a computer generated notice of expiration approximately five months after the fire.
Plaintiff instituted this action against the Association, Security Pacific and Reyes, seeking to recover damages sustained as a result of the fire. She charged that (1) the Association breached its obligation to pay the loss under its fire insurance policy; (2) Security Pacific breached its obligation under an insurance premium financing agreement to pay the insurance premiums on the insurance policy, and (3) Reyes failed to keep and maintain in force fire insurance on her property. Prior to trial, a default judgment was entered against Reyes.
The trial court bifurcated the trial on the issues of liability and damages. At the conclusion of plaintiff's liability case, the
trial court granted the Association's motion for involuntary dismissal of those claims of plaintiff that sounded in negligence either directly against the Association or vicariously for Reyes' negligence. At the same time, the trial court granted Security Pacific's motion for involuntary dismissal of all claims and cross-claims against it. At the conclusion of the proofs, the Association moved for a judgment in its favor on the grounds that (1) it had proven that it had a right to cancel the insurance policy and (2) it had conclusively proven that it mailed the notice of cancellation thereby cancelling the policy. The trial court held as a matter of law that the Association had a right to cancel the policy and informed counsel that it would instruct the jury accordingly. The trial court reserved decision, however, with respect to the Association's claim that it had conclusively proven mailing of the notice as a matter of law. This matter was submitted to the jury and the jury found that the Association had not mailed the notice of cancellation. The trial court denied the Association's motions for a judgment notwithstanding the verdict and for a new trial as to liability. Thereafter, following a bench trial, the trial court awarded plaintiff damages in the amount of $38,594.57. This appeal followed.
The Association seeks a reversal of the judgment and a new trial as to both liability and damages. It contends that (1) the trial court erred in denying its motion for a new trial because the jury verdict was against the weight of the evidence; (2) the trial court's instruction to the jury that it could infer non-mailing of the notice of cancellation from evidence of non-receipt of the notice constituted plain error; (3) plaintiff's counsel's opening remarks to the jury concerning Reyes' financial status were improper and prejudicial; (4) the trial court erred in admitting into evidence a computer printout of plaintiff's construction costs and (5) plaintiff failed to meet her burden of proving the actual cash value of the loss. Plaintiff, by way of cross-appeal, contends that the trial court erred in holding, as a matter of law, that the Association had the right to cancel the policy.
At the outset, we are convinced that the trial court properly held that the Association had a right to cancel the policy issued to plaintiff. The thrust of plaintiff's argument to the contrary is that Reyes was the agent of the Association for the purpose of transmitting the premium payments to the Association and, therefore, the Association was vicariously liable ...