On appeal from the Superior Court of New Jersey, Law Division, Camden County.
Approved for Publication March 31, 1995
Before Judges Skillman, Wallace and Kleiner. The opinion of the court was delivered by Kleiner, J.A.D.
The opinion of the court was delivered by: Kleiner
Plaintiff New Jersey Automobile Full Insurance Underwriting Association ("NJAFIUA") by its servicing carrier, Liberty Mutual Insurance Company, appeals from an order denying its motion for summary judgment in a declaratory judgment action seeking a determination of insurance coverage.
On October 5, 1987, Anthony Marotta and Concetta Marotta were residents of Philadelphia. Anthony owned a condominium in Wildwood, and the Marottas used that condominium regularly during the summer and occasionally on non-summer weekends. On that date, Anthony, representing himself as a New Jersey resident, applied for a $500,000 single limit automobile liability insurance policy which was issued by plaintiff. The policy was renewed on October 5, 1988.
On October 10, 1988, Anthony struck a motor vehicle in Philadelphia operated by defendant Jack Berk, in which Eileen Berk was a passenger. The Berk vehicle was insured by defendant International Insurance Company ("International"). That vehicle was also insured under a business policy by American InsuranceCompany ("American"). Berk's insurance policies both provided uninsured/underinsured motor coverage with policy coverage limits less than the liability insurance coverage limits insuring the Marotta vehicle.
In June 1989, the Berks filed a complaint in the Court of Common Pleas in Philadelphia for compensatory damages and named Anthony Marotta as defendant. An answer was filed by the NJAFIUA through its servicing carrier. That suit is still pending.
Thereafter, based upon an investigation, plaintiff concluded that Marotta had misrepresented facts which it contended rendered Marotta ineligible for a policy of liability insurance issued by the NJAFIUA. N.J.S.A. 17:30E-3m, provides in part:
"Qualified applicant" means a person domiciled in New Jersey who is an owner of an automobile registered, or to be registered within 60 days of application, and principally garaged in this State, who has been refused coverage in the voluntary market, and who cannot be or is not placed in the voluntary market through the procedures established pursuant to subsection a. of section 26 of P.L. 1983, c.65 (C.17:30E-14).
More specifically, plaintiff contended that Marotta's motor vehicle was not registered or principally garaged in New Jersey, and that Marotta's domicile was in Pennsylvania.
Plaintiff then filed a complaint for declaratory judgment seeking to avoid all claims against the policy of liability insurance it had issued Marotta, or alternatively, to limit the extent of insurance coverage to the statutory mandatory compulsory insurance of $15,000 per person, $30,000 per accident and $5,000 property damages prescribed in N.J.S.A. 39:6A-3 and N.J.S.A. 39:6B-1. *fn1
After discovery was complete, plaintiff filed a motion for summary judgment, and defendants International and American eachfiled separate cross-motions for summary judgment seeking an order declaring that plaintiff's entire policy limit of $500,000 must be provided to indemnify Marotta against the Berks' pending claims. *fn2 After oral argument, the motion Judge denied plaintiff's motion and granted summary judgment on each defendant's cross-motion. We reverse and conclude that plaintiff must indemnify Marotta only to the extent of the compulsory insurance proscribed in N.J.S.A. 39:6A-3 and N.J.S.A. 39:6B-1.
The responsibility of an insurance carrier for claims arising prior to a retroactive revocation of a liability insurance policy was most recently discussed in Dillard v. Hertz Claim Management, 277 N.J. Super. 448, 650 A.2d 1 (App. Div. 1994). In Dillard, the policy of a host driver was canceled retroactively for nonpayment of the initial insurance premium. Id. at 449. The date of revocation was subsequent to an automobile accident in which the host driver's passenger was injured. Ibid. Dillard relied upon our decision in Fisher v. New Jersey Automobile Full Insurance Underwriting Ass'n, 224 N.J. Super. 552, 557-58, 540 A.2d 1344 (App. Div. 1988), where a liability policy was retroactively void due to the lack of qualification of ...