On appeal from Superior Court of New Jersey, Law Division, Union County.
Before: Judges Conley, Wallace and Carchman.
The opinion of the court was delivered by: Conley, J.A.D.
In 1991, plaintiff insured, Victory Peach Group, Inc. (Victory Peach), owned and operated a motor inn in Springfield. On November 10, 1991, the property was insured by defendant Greater New York Mutual Insurance Company (Greater New York) under a commercial property insurance policy entitled "Protecto-Guard Policy." On that day, the property sustained damage as a result of a storm during which rain entered the interior through the roof which was being repaired. Greater New York denied coverage; Victory Peach filed a declaratory judgment action. The coverage and damage issues were bifurcated. On May 19, 1995, a judgment of liability was entered and, following the vacation of a default judgment of $205,847.60 plus $53,545.74 prejudgment interest by order entered September 16, 1996, a jury returned a verdict for $100,000 in damages. Final judgment was entered in favor of Victory Peach for that amount plus $26,215.07 prejudgment interest. Greater New York appeals the May 19, 1995 order for judgment on liability; Victory Peach cross-appeals from the September 16, 1996 order vacating the default judgment. On appeal, Greater New York contends:
POINT I. A TARP TEMPORARILY PLACED OVER AN OPENING IN THE ROOF MADE BY THE INSURED DURING REPAIRS DOES NOT CONSTITUTE A ROOF AS A MATTER OF LAW AND, THEREFORE, THE POLICY'S LIMITATION OF COVERAGE UNDER SECTION C.1.c APPLIES.
POINT II. PLAINTIFF'S CLAIMS FOR DAMAGES TO PERSONAL PROPERTY ARE EXCLUDED UNDER SECTION B.2.j. AS SUCH DAMAGES WERE CAUSED BY RAIN TO PERSONAL PROPERTY IN THE OPEN.
POINT III. THE POLICY'S LIMITATIONS AND EXCLUSIONARY PROVISIONS SHOULD BE ENFORCED REGARDLESS OF ANY DISTINCTION BETWEEN "ALL RISK" AND "NAMED PERIL" POLICIES.
Victory Peach on its cross-appeal contends there was no excusable neglect to justify a setting aside of the default judgment. As to the cross-appeal, we affirm the September 16, 1996 order vacating the default judgment on damages substantially for the reasons set forth by judge Span in her September 13, 1996 oral decision. See Parker v. Marcus, 281 N.J. Super. 589, 592-93 (App. Div. 1995), certif. denied, 143 N.J. 324 (1996). We note, moreover, that the total default judgment of $258,393.34 was premised upon unsworn estimates, without any findings as to their reasonableness. Cf. Morales v. Santiago, 217 N.J. Super. 496 (App. Div. 1987). We address Greater New York's appeal from the May 19, 1995 order for judgment on liability in favor of Victory Peach. Our consideration of the pertinent provisions of the policy, the particular circumstances of the damage sustained by Victory Peach's property, and the applicable law convinces us that Judge Span correctly concluded that the policy provided coverage for the damage. Here is what occurred. Prior to November 10, 1991, Fred Murray, a principal of Victory Peach, had observed a few leaks in the interior of the building and had observed "seams [in the roof] that were open from the wind and, . . . from months of weather." The roof was a "rubbertex" material. He decided to repair the roof by building troughs on it to divert the water and assist in drainage. The troughs were created by making cutouts in the roof, relining the cutouts and securing them with the heat of a blow torch and then reseaming the roof. The repairs were not completed at the end of the day. In an effort to protect the seams that remained unfinished, three large, heavy, vinyl tarpaulins were placed over the troughs and nailed down to the roof using roofing nails and flat shingles. That night a rainstorm with high winds ripped off the tarpaulins and securing shingles. Rainwater entered the building and caused water damage to its interior and its contents. The policy provides in pertinent part: A. COVERAGE We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.
Coverage, then, depends upon whether the damaged property is "Covered Property" and whether the damage is "caused by or resulting from" a "Covered Cause of Loss." As to whether property is "Covered Property," the policy provides in pertinent part: Covered Property, as used in this Coverage Part, means the following types of property for which a Limit of Insurance is shown in the Declarations:
a. Building, meaning the building or structure described in the Declarations, including: