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Valley National Bancorporation v. American Motorists Insurance Co.

October 27, 1998

VALLEY NATIONAL BANCORPORATION, PLAINTIFF-APPELLANT,
v.
AMERICAN MOTORISTS INSURANCE COMPANY, DEFENDANT-RESPONDENT.



Before Judges Muir, Jr., Keefe, and Eichen.

The opinion of the court was delivered by: The opinion of the court was delivered by Muir, Jr., P.j.a.d.

[9]    Argued September 29, 1998

On appeal from the Superior Court of New Jersey, Law Division, Essex County.

Plaintiff, a mortgagee of commercial property that sustained fire loss damage, filed this action claiming defendant liable for the fire damage under a multi-peril insurance policy defendant issued to the owner/mortgagor. Defendant filed a motion for summary judgment. It contended, as a matter of law, the policy had been effectively canceled. Relying on a policy provision that required it to be given ten days written notice prior to the effective date of (1) cancellation for nonpayment of premium or (2) non-renewal, plaintiff contended effective notice had not been provided. The trial court concluded the notice defendant claimed it had given was sufficient and entered summary judgment. Plaintiff appeals. We reverse.

The record discloses the policy in question covered the period from September 21, 1993, to September 21, 1994. It provided fire loss coverage with a $50,000 fire damage limit.

At the policy's issuance date, plaintiff held a mortgage on the insured property. *fn1 The mortgage required the mortgagors to maintain a fire insurance policy "with mortgagee clause satisfactory to Mortgagee naming Mortgagee as an insured party." The mortgage gave plaintiff control over any policy loss proceeds.

The policy named plaintiff as mortgagee. Under the caption "Mortgage Holders," it provided, in relevant part:

"b. We will pay for covered loss of or damage to buildings or structures to each mortgage holder shown in the Declarations in their order of precedence, as interests may appear."

"c. The mortgage holder has the right to receive loss payment even if the mortgage holder has started foreclosure or similar action on the building or structure."

"d. If we deny your claim because of your acts or because you have failed to comply with the terms of this Coverage Part, the mortgage holder will still have the right to receive loss payment if the mortgage holder:"

"1) Pays any premium due under this Coverage Part at our request if you have failed to do so;"

"2) Submits a signed, sworn statement of loss within 60 days after receiving notice from us of your failure to do so; and"

"3) Has notified us of any change in ownership, occupancy or substantial change in risk known ...


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