On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-3193-99.
Before Judges Skillman, Cuff and Winkelstein.
The opinion of the court was delivered by: Skillman, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This is an appeal by defendants Connecticut Indemnity Company and Connecticut Specialty Insurance Company *fn1 from a final judgment in favor of plaintiffs for $22,000 plus $3,612 in prejudgment interest on a claim under a "Jewelers Block" insurance policy.
Plaintiffs Paul and Theresa Chu own and operate Sherwood Products, Inc. (Sherwood), a jewelry company that does most of its sales at trade shows. In May 1994 plaintiffs submitted an application for insurance coverage on their inventory through a broker. The application form included questions concerning the applicant's bookkeeping practices, which the Chus answered as follows:
a. Do you keep a detailed and itemized inventory of your stock? YES
b. Do you keep a record of purchases and sales? YES
c. Do you maintain detailed records of the property of others in your care, custody or control? YES
d. How often do you take a physical stock inventory? YEARLY Based on the information contained in plaintiffs' application, defendants issued a Jewelers Block policy to Sherwood. Endorsement #2 of the policy specifically provided for off premises coverage at trade shows.
The policy issued to plaintiffs included a section which required them to maintain specified records of their inventory, purchases and sales, and any merchandise taken from its premises to another location:
You will keep accurate records of your business and retain them for three years after the policy ends.
These records will consist of: (1) An itemized inventory of all your stock in trade;
(2) Records of all purchases and sales whether cash or credit; (3) Records of the property of others in your care, custody or control; (4) A detailed listing of travelers stock; and (5) Records of all other property away from your premises.
You will also take a physical inventory of all your stock in trade at least every 12 months.
On May 4, 1997, the Chus and two other Sherwood employees went to a four-day trade show in Atlantic City. They brought approximately 600 pieces of jewelry, which had an aggregate value of $250,000 to $300,000, with them. They carried most of the jewelry in a Samsonite case. However, Mrs. Chu also carried some "special items" in a brown handbag. When the Chus set up ...