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Palisades Safety & Insurance Association v. Bastien

October 10, 2001

PALISADES SAFETY & INSURANCE ASSOCIATION, PLAINTIFF-RESPONDENT,
v.
LEONEL BASTIEN, PAULE BASTIEN, DEFENDANTS-APPELLANTS, AND MARY LAROCHE, DEFENDANT.



On appeal from the Superior Court of New Jersey, Law Division, Union County, L-5802-98.

Before Judges Skillman, Carchman and Wells.

The opinion of the court was delivered by: Wells, III.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 11, 2001

Leonel and Paule Bastien, defendants in a declaratory judgment action filed by plaintiff, Palisades Safety and Insurance Association, an automobile insurance carrier, appeal from a final order of the Law Division, Hudson County, which declared a policy of insurance issued to Leonel did not provide personal injury protection (PIP) benefits to Paule, his wife. The order was entered upon a motion for summary judgment.

The facts before the motion judge were undisputed.

Leonel applied for automobile coverage from Palisades on November 18, 1996. He listed his address as "1436 Frances Lane, Plainfield, N.J., 07060." He falsely listed himself as the only resident and described himself as single even though Leonel was married to Paule who lived with him at 1436 Frances Lane. Two cars, registered in the name of Leonel, were to be covered, a "1990 Hyundia (sic) Excel, 2dr" and a "1995 Land Rover Discover." Leonel also signed a Palisades Membership Authorization in November 1996, which falsely listed him as the only driver of the two vehicles and certified to the truth of the information. We note that there was no evidence that Paule knew of or participated in the false representations.

Palisades issued a policy of insurance effective November 22, 1996, for one year. It contained a provision which stated the company did not provide coverage for any person who has knowingly concealed or misrepresented any material fact at the time of the application. In July 1997, Leonel added coverage for a "97 Mazda 626." He made no other changes to the information supplied to Palisades.

Palisades' underwriting manager certified that the premium, based on Leonel's application as submitted, was $2201. She stated that had the application revealed the existence of Paule as a second resident driver, the premium would have been $2350, a difference of $149.

On October 3, 1997, Paule, driving the Mazda in the company of her mother, Mary LaRoche, suffered a motor vehicle collision. Both were injured as the result. Paule and Mary filed PIP claims. On December 1, 1997, Palisades filed a declaratory judgment action seeking a declaration that the insurance policy issued to Leonel "be declared void from its inception." Following a period of discovery, Palisades filed a motion for summary judgment. The court granted the motion as to Paule and also limited Mary LaRoche's PIP benefits to the minimum. Thereafter, following a motion to reconsider the judge once again granted Palisades summary judgment as to Paule Bastien with respect to its claims that she "is not entitled to the status of innocent third party as set forth in Lovett v. Alan Lazaroff & Co., 244 N.J. Super. 510 (App. Div. 1990)."

We affirm. In Allstate Ins. Co. v. Meloni, 98 N.J. Super. 154, 158-159 (App. Div. 1967), we held:

In general, a representation by the insured,

whether contained in the policy itself or in the application for insurance, will support the forfeiture of the insured's rights under the policy if it is untruthful, material to the particular risk assumed by the insurer, and actually and reasonably relied upon by the insurer in the issuance of the policy. [Citations omitted.]

There the misrepresentation was that no member of the insured's household had his or her driver's license suspended when in fact the insured's spouse had suffered several suspensions. Other cases have applied the rule in various factual scenarios. Fisher v. New Jersey Auto. Full Ins. Underwriting Ass'n, 224 N.J. Super. 552, 556-57 (App. Div. 1988)(holding that the false representation that the insured vehicle was registered in New Jersey was material and justified voiding it); Marotta v. New Jersey Auto. Full Ins. Under. Ass'n, 280 N.J. Super. 525, 532-33 (App. Div. 1995)(holding that a misrepresentation that the insured ...


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