On appeal from the Superior Court of New Jersey, Law Division, Monmouth County. On appeal from the Superior Court of New Jersey, Law Division, Monmouth County.
Approved for Publication October 31, 1995.
Before Judges Shebell, Stern and Wallace. The opinion of the court was delivered by Stern, J.A.D.
The opinion of the court was delivered by: Stern
The opinion of the court was delivered by STERN, J.A.D.
This is an appeal by defendant New Jersey Automobile Full Insurance Underwriting Association (NJAFIUA) from a final judgment entered in favor of plaintiff-insured in the amount of $61,600. Judgment was also entered in favor of third party defendant Chase Manhattan Service Corporation (Chase) against plaintiff as a result of a default on an automobile lease. There is no cross appeal, and Chase has not participated in this appeal. The trial Judge also entered a supplementary order awarding prejudgment interest to plaintiff.
On May 18, 1989, plaintiff, Patrick Gatto (Gatto), leased a 1989 Mercedes Benz model 560SEC automobile from Ray Catena Motor Car Corporation pursuant to a "Closed-End Vehicle Lease Agreement" which was assigned to Chase. Pursuant to the lease requirements, plaintiff obtained automobile insurance through the Frank W. Cerra Insurance Agency (Cerra).
On April 24, 1990, the car was stolen from plaintiff's driveway. Plaintiff thereafter filed a claim under the policy issued by NJAFIUA and its servicing carrier, Travelers Insurance Company (Travelers). Coverage was denied because the policy had expired. Plaintiff thereafter filed this action against NJAFIUA, Travelers and Cerra.
After plaintiff's motion for summary judgment on coverage was granted, *fn1 a bench trial was conducted on the issue of damages. The trial Judge rendered a finding in plaintiff's favor for $61,600.
Plaintiff obtained vehicle coverage from NJAFIUA through Cerra commencing in March 1984. He owned or leased several vehicles from March 1984 to March 1990. All were covered for one-year policy terms, beginning and ending on March 3 of each year. The policies were all "direct bill" policies, meaning that "all policies, billings, premium due notices, premium unpaid notices, renewal offers and cancellation notices were sent directly to plaintiff" by the NJAFIUA's servicing carriers.
The 1989 Mercedes was added to plaintiff's policy when leased in March 1989. Travelers subsequently withdrew as a NJAFIUA servicing carrier, and Computer Services Corporation (CSC), the new servicing carrier, assumed responsibility for the Travelers' policies. Plaintiff's policy was therefore assigned to CSC as a "roll over" policy.
Pursuant to its normal procedure, CSC "automatically generate[s]" a "renewal quotation" thirty days before the policy's expiration date. According to CSC's computer records, a "renewal quotation" "was generated for Mr. Gatto . . . on February 2, 1990 ... along with all other policies having a March 3, 1990 expiration date." The notice was not printed, however, until Saturday, February 3, 1990. Thus, as renewal notices are dispatched by "ordinary mail" to the insured, the agent and all lienholders, the renewal notice in this case would not have been mailed until Monday, February 5, 1990, less than thirty days before the expiration date.
According to Cerra, he received the "Agent Copy" of the "Personal Auto Coverage Renewal Quote," "on or about February 2, 1990." The "Renewal Quote" was dated February 3, 1990 and indicated that the policy was offered for renewal for the term March 3, 1990 to March 3, 1991. The notice provided that "if the payment is not received by 12:01 A.M." on March 4, 1990, "the policy will expire." *fn2 It was uncontested that the quoted premium of $1,523.52 was not paid.
On March 2, 1990, plaintiff was involved in an accident with the leased vehicle. Plaintiff telephoned Cerra to file a claim for the damages caused by the accident. According to Cerra, during the telephone conversation, he informed plaintiff that his insurance policy was to expire in "a day or two." He asked if plaintiff had paid the renewal premium, and received an affirmative response that plaintiff "was sure" he had. As a result, Cerra had no reason to do anything further with respect to the renewal, even though Cerra received no notification from CSC prior to the theft that Gatto had not paid the premium.
According to Cerra, "some time in late March 1990, [he] received a letter from Lisa Gatto, Plaintiff's wife, with a copy of a letter from Meritor Credit Corporation ... addressed to Plaintiff." Mrs. Gatto's letter stated that plaintiff "asked if you could take care of this." The enclosure, a letter dated March 22, 1990, informed plaintiff that Meritor, the lienholder under another vehicle lease agreement, had received notice that coverage under plaintiff's automobile policy had expired on March 3, 1990, and that it was plaintiff's obligation under that lease to maintain insurance coverage on the vehicle. Meritor asked for evidence of coverage reflecting that ...