On appeal from Superior Court of New Jersey, Law Division, Morris County.
King, Baime and Keefe. The opinion of the court was delivered by Baime, J.A.D.
[239 NJSuper Page 26] This is an appeal from a summary judgment entered by the Superior Court, Law Division, determining that plaintiffs John and Lenora Cervone were entitled to coverage under an automobile insurance policy issued by defendant New Jersey Automobile Full Insurance Underwriting Association (Association) through its servicing carrier, Prudential Commercial Insurance Company (Prudential). The Association denied liability on the
basis that the policy had expired prior to the accident which resulted in the claim and that plaintiffs' attempt to renew was ineffective because the premium was received after the due date set forth in Prudential's conditional renewal offer. The Law Division judge granted plaintiffs' motion for summary judgment, holding that where a carrier's offer to renew is conditioned upon payment of a premium which is not received by the due date, the insured nevertheless continues to be covered unless a notice of cancellation is mailed in accordance with the requirements of N.J.S.A. 17:29C-10.
On appeal, the Association contends that where an insured fails to comply with a conditional offer to renew by not sending the premium prior to the due date the policy lapses and a notice of cancellation need not be mailed. We agree with this argument for the reasons expressed in our opinion filed this day in Lopez v. New Jersey Automobile Full Insurance Underwriting Association, et al, 239 N.J. Super. 13, 570 A.2d 994 (App.Div.1990). We are thus convinced that the Law Division judge erred by granting plaintiffs' motion for summary judgment. However, our review of the record persuades us that substantial questions exist with respect to whether the Association should be equitably estopped from denying liability on the basis that plaintiffs' policy expired. These questions were not directly raised by plaintiffs and hence were not addressed by the Law Division judge. We are thus constrained to remand the matter to insure full exploration of the relevant factual and legal issues presented.
Unfortunately, the sparse record is not entirely informative with respect to the precise chronology of events. This case concerns an automobile accident involving Lenora Cervone and her demand for coverage under a policy issued to her father, John Cervone. Prudential claimed that there was no policy in existence on the date of the accident, August 25, 1987, due to Cervone's failure to pay a renewal premium on time.
Prudential issued an automobile insurance policy to John Cervone on August 5, 1986. By its terms, the policy was to expire at 12:00 noon on August 5, 1987. The policy was issued by Prudential on behalf of the Association, a statutory non-profit organization established to provide insurance to individuals who are unable to obtain coverage in the voluntary market. N.J.S.A. 17:30E-2.
At least 30 days prior to the August 5, 1987 expiration date Prudential sent Cervone a letter offering to renew his policy. The offer to renew was conditioned upon Prudential's receipt of Cervone's premium payment on or before August 5, 1987. In its submissions to the Law Division, Prudential acknowledged that it was unable to locate a copy of its notice. However, Prudential supplied what it characterized as an "identical" notice, which is part of the record before us. Plaintiffs concede that they received a notice of Prudential's offer to renew. They do not acknowledge, however, that the document submitted to the Law Division is identical to the one they received.
In any event, the notice in the record sets forth the full premium amount, the minimum payment and the due date. The notice states further that the "premium payment is due on or before the due date" and that "[there] is no 'grace period' provision." The notice also provides that Prudential "must receive the minimum payment by the due date or this policy will expire." Also set forth in the notice is the statement that "[there] are no reinstatement privileges" and that "[a] payment received after the due date will not extend the insurance protection." The document also states that the insured "will not receive further notice."
Accompanying this notice was an "automobile policy declarations" sheet and an "insurance identification card." The declarations sheet sets forth the types and amounts of coverage, the named insureds and the described automobiles. The document states further that the "policy period" commences at "12:01 a.m. standard time" and runs from August 5, 1987 to August 5,
1988. Among other things, the insurance identification card provides that the policy is "effective" on August 5, 1987 ...