On appeal from the Superior Court of New Jersey, Chancery Division, General Equity Part, Essex County, C-5298.
Before Judges Petrella, Kestin and Alley.
The opinion of the court was delivered by: Per Curiam
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: September 10, 2001
This lawsuit, as initially commenced, arose from alleged defaults on mortgage financing. Two of the defendants filed a third party complaint against James L. Watkins alleging negligent appraisal of several properties which were the subject of plaintiff's claim. Watkins, in turn, filed a fourth-party action for coverage and a defense against St. Paul Fire and Marine Insurance Company (St. Paul) under claims-made professional liability insurance policies issued by St. Paul to Watkins.
Both parties in the fourth-party action filed motions for summary judgment. After a plenary hearing on a single issue, the trial court denied Watkins's motion for summary judgment and granted St. Paul's, dismissing the fourth-party complaint. Watkins appeals from the order memorializing that ruling.
We note at the outset that this appeal is interlocutory.
A third-party or fourth-party claim is, by definition, part of the lawsuit in which it arises. Disposition of such a claim alone does not dispose of the underlying proceeding. Finality does not attach, because there has been no resolution "both as to all issues and all parties." Pressler, Current N.J. Court Rules, comment 2 on R. 2:2-3 (2001). However, St. Paul has not discharged its responsibility to move for dismissal of the appeal on that ground, see ibid., and the parties have fully briefed and argued the issues presented. We elect, therefore, to regard Watkins's notice of appeal as a motion for leave to appeal, which we grant nunc pro tunc.
Most of the operative facts are undisputed. St. Paul issued a real estate appraiser's professional liability policy to Watkins for a one-year term beginning March 27, 1996. The policy was of the "claims-made" type insuring against "claims or suits for covered loss only when . . . first made or brought  while this agreement is in effect or during the limited reporting period." The "limited reporting period" was defined as "one year [from] the end date of this agreement[.]" The policy also provided that "[t]he limited reporting period will apply if this agreement is cancelled or not renewed for any reason. It may not be cancelled once it applies."
On March 27, 1997, the expiration date of the policy, a letter from J. A. Price Agency, Inc., St. Paul's agent, advised Watkins that the policy term had expired and that he had not applied or paid for a renewal or an "extended reporting period endorsement." The letter informed Watkins that he could either renew the policy or extend the reporting period by paying the annual premium, $595, within thirty days. Watkins submitted a renewal request form dated April 29, 1997, and St. Paul issued a renewal policy for an additional one-year term ending March 27, 1998. The renewal policy, however, provided for a sixty-day limited reporting period rather than the year which had been established in the initial policy.
On August 3, 1997, the renewal policy was cancelled by reason of Watkins's failure to pay the premium. A letter dated August 20, 1997 informed Watkins of the cancellation and offered him an opportunity to purchase an extended reporting endorsement for an amount equal to the annual premium. Watkins made no such choice, and St. Paul subsequently took the position that his rights under the policy "expired 60 days after [its] end date . . . August 3, 1997, the date of cancellation."
In April 1998, the claim underlying this suit was made against Watkins based upon appraisals he had made in June 1997. The claim was reported to St. Paul on Watkins's behalf on June 19, 1998. In a letter dated July 11, 1998, St. Paul disclaimed on the basis that the claim was not first made against Watkins and reported to St. Paul during the term of a policy or within the specified sixty-day limited reporting period of the renewal policy.
Watkins took the position that he had never received notification that the renewal policy contained a reduced limited reporting period. He testified to that effect at the plenary hearing the trial court held to receive evidence which would permit the limited issue to be resolved. Specifically, Watkins testified that he had never received from St. Paul any policy other than the initial one. St. Paul relied upon a certification from Rodney L. Olsen, President of J. A. Price, which declared: "I forwarded this policy to Mr. Watkins at the address shown on the application." The certification was submitted at the judge's instruction in lieu of Olsen's live testimony. Based upon the evidence received, the trial court found Watkins's testimony "to be lacking in credibility and not believable," and that he had received the second policy. The judge held, as a matter of law, that Watkins was under an obligation to read the renewal policy and was bound by its terms.
The judge specifically determined that Watkins was not relying upon the one-year limited reporting period that is referenced in the first policy. In fact, I find that he did not know what the limited reporting period is because of two things. First, he didn't read the policy when it was mailed. And secondly, he had no such discussion with counsel [in which, he asserted, he first learned of the limited reporting period in the first policy]. I think ...