On appeal from the Superior Court of New Jersey, Law Division, Hudson County.
Released for Publication January 6, 1997.
Before Judges Kleiner and Coburn. The opinion of the court was delivered by Kleiner, J.A.D.
The opinion of the court was delivered by: Kleiner
The opinion of the court was delivered by
Progressive Casualty Insurance Company (Progressive) and New Jersey Automobile Insurance Plan Commercial Automobile Insurance Procedure (Plan) appeal from the entry of an order, following a bench trial, requiring the reformation of an automobile insurance policy that they issued to respondent, Hudson County Collision Company (Hudson County). Specifically, the trial Judge ordered that the policy's effective date be changed to April 1, 1992, at 12:01 a.m., thereby permitting Hudson County recourse to the policy for the accident which occurred on that same date involving one of its drivers. The accident resulted in injuries to plaintiffs Diana Rodriguez, a passenger in the Hudson County vehicle, and Francisco Garcia, the operator of a vehicle struck by the Hudson County vehicle.
In reaching this decision, the trial Judge concluded that third-party defendant Jannine Richter, a broker with the R.C. English Agency, acted as an agent of the Plan and Progressive. We conclude that the Judge misconstrued the facts presented at trial. Richter was not the agent of the Plan or Progressive, nor did she have actual or apparent authority to bind either the Plan or Progressive. The record on appeal clearly demonstrates that Richter was simply a broker. Based on Richter's status as a broker, her negligence in arranging an insurance policy for Hudson County may not be rectified by reformation of the insurance policy. We therefore reverse the order entered by the trial Judge.
From January 1989 until March 1993, Richter worked as office manager and licensed insurance producer at the R.C. English Agency, an insurance agency. In this capacity, she was responsible for a number of clients including Hudson County, which maintained a garage policy providing liability coverage with Public Service Mutual Insurance Company (PSM).
In January 1992, PSM notified both Richter and Hudson County that the garage policy was going to be canceled, effective April 1, 1992, because of excess loss. Richter spoke with Peter Begovich, president of Hudson County, about the imminent cancellation, and he asked her to find a replacement carrier. Richter attempted to do so but was without success in the voluntary insurance market. Richter advised Begovich that, as a last resort, she would have to go through the Plan, a New Jersey sponsored entity that assists in obtaining coverage for otherwise uninsurable risks. On March 24, 1992, Richter sent Begovich a quote from the Plan. Begovich subsequently instructed her to apply for a policy through the Plan.
The Plan, New Jersey Automobile Insurance Plan Commercial Automobile Insurance Procedure, consists of guidelines encompassed in twenty-five sections. Section 12 is entitled "Designation of Servicing Carrier and Effective Date of Coverage." Section 12 is further divided as follows:
A. For Private Passenger, Light Trucks, Motorcycles, Recreational Trailers, Motor Homes and Camper Bodies Only:
B. For All Applicants Other Than Those Defined in Subsection A
Unquestionably, Hudson County intended to insure vehicles which do not fall within Section 12A. Section 12B of the guidelines applies in ...