On appeal from the Superior Court of New Jersey, Law Division, Bergen County.
Plaintiffs Joseph and Pauline Catton appeal from the entry of summary judgment in favor of the defendant New Jersey Full Insurance Underwriting Association, commonly referred to as the JUA. The issue presented on appeal is whether the JUA may rescind an automobile insurance policy after erroneously extending coverage to an "unqualified applicant" under N.J.S.A. 17:30E-3(m) when that applicant did not make any misrepresentations in obtaining the contested policy. We hold that the summary judgment was mistakenly entered and reversed the judgment under review.
Despite the rather truncated facts and narrow issue presented to the Law Division judge, both parties have submitted documents containing factual information not before the
trial court. Such conduct is in violation of appellate rules. R. 2:5-4(a); Middle Dep't Insp. Agency v. Home Ins. Co., 154 N.J. Super. 49, 56, 380 A.2d 1165 (App.Div.1977), certif. den. 76 N.J. 234, 386 A.2d 858 (1978). However, because we find it necessary to reverse and remand the matter for further proceedings, we will utilize the additional material since it is largely immaterial to the outcome of the case and will provide guidance to the trial court on remand.
These are the facts. On December 19, 1984, plaintiff Joseph Catton entered into a lease agreement with Braman Cadillac Leasing Corp. of Miami, Florida, for a 1985 Porsche. At the time, plaintiffs were insured under a JUA policy issued by State Farm Insurance Companies (State Farm) on June 5, 1984 covering a 1983 Audi owned by plaintiffs. The policy indicated that plaintiffs lived in Oakhurst, New Jersey. Plaintiffs requested that the Porsche be added to the policy through their regular broker, R.S.A. Brokerage in Brooklyn, New York. The Porsche was not registered in New Jersey nor, apparently, was plaintiff Joseph Catton a licensed New Jersey driver. The declaration sheet of the policy was amended as requested and, thereafter, the policy was renewed in June, 1985.
On or about October 29, 1985 the Porsche was stolen from the driveway of plaintiffs' home located in Oakhurst. A report of the theft was filed with the Ocean Township Police Department. Thereafter, plaintiffs submitted a claim to State Farm for the loss of the Porsche. State Farm refused payment, claiming that plaintiffs were ineligible for coverage pursuant to N.J.S.A. 17:30E-3(m), which requires, among other things, that the insured automobile be registered in New Jersey. Thereafter, State Farm rescinded the policy and issued a check to plaintiffs for the amount of the premium.
In response to State Farm's refusal to satisfy the claim, plaintiffs filed this action. Prior to trial, State Farm moved for and was granted summary judgment. Plaintiffs do not challenge that decision. In due course, the case was assigned to a
judge for trial. Rather than proceed to a plenary hearing, the parties, at JUA's request, stipulated certain facts and presented a narrow issue to the trial judge for decision by way of summary judgment motion.
The parties stipulated that the Porsche was not registered in New Jersey and, for the purpose of the motion only, that there were no misrepresentations appearing in plaintiffs' application for insurance coverage. The precise issue presented to the trial judge, as contained in the summary judgment order executed by him, was "whether the defendant has the right to rescind the insurance policy rather than cancel it on the basis that the plaintiffs are not qualified applicants for insurance under the provision of N.J.S. 17:30E-1 et seq. (New Jersey Automobile Full Insurance Availability Act), in that it has been stipulated that plaintiffs' vehicle was not registered in the State of New Jersey and for purposes of this motion the court makes no finding as to any misrepresentation as to the registration appearing in the plaintiff's application for insurance." Based on that stipulation and the legal arguments presented, the trial judge upheld defendant's right to rescind the policy and dismissed plaintiffs' complaint with prejudice and without costs. This appeal followed.
Plaintiffs contend on appeal that, because they made no misrepresentations in obtaining the policy, they are entitled to coverage. JUA contends that it is irrelevant that plaintiffs made no factual misrepresentations in order to procure the insurance. It contends that under N.J.S.A. 17:30E-3(m) it is able to rescind the policy because: 1) plaintiff, Joseph Catton, did not possess a valid New Jersey Driver's License at the time ...