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Boddy v. Cigna Property & Casualty

October 30, 2000

JEROME BODDY, PLAINTIFF-APPELLANT,
v.
CIGNA PROPERTY & CASUALTY COMPANIES, DEFENDANT, AND ATLANTIC EMPLOYERS' INSURANCE COMPANY, DEFENDANT-RESPONDENT.



Before Judges Petrella and Braithwaite.

The opinion of the court was delivered by: Petrella, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 2, 2000

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

Plaintiff Jerome Boddy appeals from the grant of summary judgment in favor of defendant Atlantic Employers Insurance Company (Atlantic). *fn1 Boddy had sought a declaratory judgment that his homeowners' insurance policy issued by his insurer, Atlantic, effective June 26, 1997, covered the theft of his motorcycle and damage to his vehicle.

The policy provided coverage for "personal property you or a household member owns or uses anywhere in the world." "Personal property" was defined as "any tangible property other than real estate." The policy states, "We will generally cover property losses that result from a theft or attempted theft. We will also cover property if it disappears from a known location and it is probable that the loss was caused by theft." The policy excludes from coverage, among other things, "[m]otorized land vehicles including their equipment or accessories, except those vehicles which are not licensed for road use and are used to assist the handicapped or to service a place where you or a household member regularly lives."

Boddy asserts that, on or about February 12, 1998, his residence in Mahwah was broken into by an unknown person or persons and that his 1991 Harley Davidson Electra-Glide FLH motorcycle was stolen and his 1987 Chevrolet automobile was damaged in the course of the theft. Boddy sought approximately $20,000 for the loss of the motorcycle and $800 for the damage to his automobile. At the time the motorcycle was stolen it was off the road for the winter and was not otherwise insured. The motorcycle insurance was allowed to lapse because Boddy had suffered a stroke which left him unable to ride the motorcycle. He took the position that when his motorcycle was garaged at his house it was covered by his homeowners' insurance because the policy covered property damage. Likewise, at the time his automobile was damaged it was neither registered for road use nor insured under a separate automobile insurance policy. Boddy took the position that since both the motorcycle and automobile were unlicensed, they came within the exception to the "motorized land vehicle" exclusion.

Atlantic denied coverage based on the "motorized land vehicle" exclusion, and Boddy instituted suit. Thereafter, Atlantic successfully moved for summary judgment.

At the hearing, Boddy argued that the term "motorized land vehicles" is ambiguous and that the policy was not written in a simple, clear, and easily readable manner. Boddy relied on his retained expert's report which stated:

If the intent of the exclusion is to exclude coverage under the policy for automobiles, motorcycles, mopeds and similar motor vehicles, whether licensed for road use or not, then the wording employed by Atlantic Employers fails to achieve this purpose and creates a material and substantive ambiguity in the mind of the reader and certainly in the mind of the average named insured who purchases a policy.

The motion judge agreed with Atlantic, concluding that the policy language was unambiguous and that the interpretation of the insurance agreement was "a pure legal question" for the court to decide.

I.

Boddy asserts that the exclusion clause was not written in a "simple, clear, understandable and easily readable" manner as required by the Plain Language Act (N.J.S.A. 56:12-1, et seq.) (the Act), specifically under N.J.S.A. 56:12-2 as to insurance policies. The Act lists various guidelines that the court "may consider in determining whether a consumer contract as a whole complies" with this requirement. These factors include, among other things, confusing cross references, exceptions to exceptions, double negatives, and words that are either obsolete or have a legal meaning different from their common meaning. N.J.S.A. 56:12-10(a). Although an insurer may seek certification of compliance with the Act from the Attorney General or Commissioner of Insurance, the "[f]ailure to [seek certification] does not show a lack of good faith nor does it raise a presumption that the contract violates this act." N.J.S.A. 56:12-8(e).

The policy exclusion provision at issue in this case contains an exception within an exception, which the statutory guidelines imply should be avoided. N.J.S.A. 56:12-10(a)(3). However, the existence of the exception to the exclusion does not necessarily indicate noncompliance so as to vitiate the exclusion. N.J.S.A. 56:12-2 indicates that a contract must be "written in a simple, clear, understandable and easily readable way as a whole." (emphasis added). Although the insurance policy exclusion in this case contains an exception within an exception, Boddy did not establish that the policy or the provision as a whole violates the statute, and the judge did not so find. See Wheatly v. Sook Suh, 217 N.J. Super. 233, 239 ...


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