On appeal from Superior Court, Law Division, Essex County.
Before Judges Petrella, Brochin and Cuff.
The opinion of the court was delivered by
This appeal arises from the grant of a cross-motion for summary judgment against Harvester Chemical Corporation (Harvester) dismissing its declaratory judgment complaint against Aetna Casualty & Surety Company (Aetna). Harvester asserts that Aetna wrongfully terminated Harvester's annual insurance contract. For various reasons Harvester contends that the insurance contract should be considered to have been in effect on the date when an incident occurred giving rise to a products-liability-type personal injury claim.*fn1
Harvester argues that the cross-motion for summary judgment should not have been granted against it because: (1) Aetna did not properly notify it of the May 23 cancellation and, hence, that cancellation notice was ineffective; (2) the dates of cancellation were ambiguous; (3) the cancellation was contrary to public policy; and (4) Aetna is bound by promissory estoppel.
The arguments on the public policy issue and the timeliness of the cancellation notice have merit. The other issues raised are essentially without merit, R. 2:11-3(e)(1)(E), and we need not discuss them. Although fact issues exist on the question of the effectiveness of the first cancellation notice,*fn2 our opinion does not turn on that point in the first instance because the insurance
contract between Aetna and Harvester would violate public policy if it could be cancelled, as Aetna argues, merely by giving thirty days' notice "for any reason," which means even if the reason is only subjective to Aetna or no reason, or no good cause. The subject termination provision should properly be construed as requiring that Aetna must demonstrate a sufficient objective reason for cancellation mid-term, as opposed to non-renewal at the end of the policy term.*fn3
On November 11, 1984, Harvester, through National Insurance Associates (NIA), its insurance agent, renewed its general liability insurance policy with Aetna. Harvester borrowed $9,600 from AFCO, a premium finance company, towards payment of the annual premium of approximately $12,500.*fn4 Under its agreement with NIA, AFCO sent $9,600 to NIA on December 10. Harvester paid the balance to NIA on December 26, 1984.
An amendment to the policy provided that:
With respect to the cancellation for any reason other than nonpayment of premium, this policy may be canceled by mailing to the named insured, at the address shown in this policy, written notice stating when not less than thirty days thereafter, such cancellation shall be effective. (Emphasis added).
On May 23, 1985, Aetna purported to cancel the policy for "underwriting considerations."
Aetna asserts that the policy permits cancellation for any reason by mailing notice to the insured at least thirty days before the effective date of cancellation, and moreover, that an unspecified "underwriting reason" constitutes "any" reason.
According to certifications Aetna submitted with its cross-motion, Aetna claims it mailed a cancellation notice on April 23 to be
effective May 23, 1985. Harvester disputes this, stating it has no record of receipt of such a notice. Aetna presented no documented records of mailing the specific notice. Aetna offered proof with its cross-motion by way of certification that employees adhered to company mailing procedures and company pre-cancellation telephone notification procedures. Additionally, Aetna relied on deposition testimony alleging ...