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Cobra Products Inc. v. Federal Insurance Co.

December 31, 1998

COBRA PRODUCTS, INC., PLAINTIFF-APPELLANT,
v.
FEDERAL INSURANCE COMPANY D/B/A CHUBB GROUP OF INSURANCE COMPANIES, DEFENDANTS-RESPONDENTS, AND DEIDRE BURKER, AN INDIVIDUAL, DEFENDANT.



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

Argued: December 9, 1998

[9]    Before Judges King and Wallace.

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

I.

This matter arises from a property loss insurance dispute. The plaintiff Cobra Products, Inc. filed a complaint against defendant Federal Insurance Company seeking to recover the value of a property loss by theft. The defendant insurance carrier refused payment claiming the thefts constituted employee dishonesty and were excluded under the terms of the policy. Judge Mariano granted summary judgment in favor of defendant.

Plaintiff raises these issues on appeal:

I. The motion Judge erred in granting summary judgment in favor of defendant because the disputed honesty exclusion is vague, ambiguous, and does not apply to non-employees or employees acting outside the scope of their employment.

II. The motion Judge erred in denying plaintiff's motion to compel depositions and granting defendant's summary judgment motion before the plaintiff completed discovery.

III. The motion Judge erred by denying plaintiff's request to orally argue its opposition to the motion for summary judgment.

We agree with the motion Judge's ruling and affirm.

II.

On May 20, 1996 plaintiff Cobra Products, Inc. (Cobra) filed a complaint against defendants Federal Insurance Company (FIC), doing business as Chubb Group of Insurance Companies (Chubb), and Deidre Burker (Burker). The first count sought recovery of plaintiff's first- party insurance claim against defendant FIC for losses sustained during a series of thefts between October 1993 and March 21, 1994. The second count alleged bad faith against defendant FIC and demanded punitive damages. The third count alleged bad faith against defendant Burker, a claims representative employed by Chubb.

In April 1997 defendant FIC filed a motion for summary judgment returnable May 30, 1997. Prior to the return date defendant FIC agreed to withdraw its motion pending further discovery and in return, plaintiff agreed to dismiss its claims for attorney fees, extracontractual or bad-faith damages against FIC, and bad-faith damages against Burker, individually. Moreover, on May 21, 1997 defendant agreed to wait sixty to ninety days before reapplying for summary judgment to allow plaintiff to complete discovery, including the deposition of Burker. On May 30, 1997 the parties filed a stipulation of dismissal with prejudice as to counts II and III of the complaint and the claim for attorney's fees only. Plaintiff's counsel took Burker's deposition on June 25, 1997.

On September 12, 1997 defendant filed a second notice of motion for summary judgment. Plaintiff filed a notice of cross-motion to compel depositions on September 29, 1997. Both parties filed briefs and reply briefs in support of their motions. Both parties requested oral argument. R. 1:6-2(d).

The Judge, for some unknown reason, denied the parties' requests for oral argument and decided the matter on the briefs. On October 10, 1997 Judge Mariano read into the record a two-page statement summarizing the undisputed facts, his finding that the dishonesty exclusion was "clear and unambiguous," and issued an order granting summary judgment in favor of defendant FIC.

III.

Plaintiff Cobra is a New Jersey corporation with its principal place of business at 1064 Industrial Drive, Berlin Township, Camden County. Cobra manufactures sewer-cleaning equipment including manual and commercial-grade power-driven models of drain-cleaning machines called "plumbing snakes" which are sold under the names of "Qwikie Electric," "Mighty Qwik," and "Mighty Rooter." Cobra also owns a factory and warehouse in Willingboro where it manufactures and stores the sewer-cleaning equipment.

As of October 1, 1989 FIC insured the plaintiff under a commercial property insurance policy, number 3527-96-18. FIC renewed Cobra's commercial insurance coverage policy annually through October 1, 1994. The policy provided that FIC agreed to pay for "direct physical loss or damage to each Subject of Insurance except as stated in Limitations or Exclusions." Subjects of insurance included "personal property," which the policy defined as

"all your business personal property and business personal property in which you have an insurable interest, but not your building, on the premises stated ...


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