July 3, 2007
JAMIL KASABRI, AN INFANT BY HIS GUARDIAN AD LITEM, SALIM KASABRI, AND SALIM KASABRI, INDIVIDUALLY, AND ROUTE 23 SHELL, PLAINTIFFS,
JOSEPH A. LISA, JR., MICHAEL FITZPATRICK & SONS, INC., AND FORD MOTOR CREDIT CO., DEFENDANTS, AND RICHARD M. DEMARCO, DEFENDANT/THIRD-PARTY PLAINTIFF-- APPELLANT,
CUMBERLAND INSURANCE COMPANY, INC. (INCORRECTLY PLEADED AS CUMBERLAND MUTUAL FIRE INSURANCE GROUP) THIRD-PARTY DEFENDANT/FOURTH-PARTY PLAINTIFF--RESPONDENT/CROSS-APPELLANT,
AMALGAMATED GENERAL AGENCIES, FOURTH-PARTY DEFENDANT/FIFTH-PARTY PLAINTIFF-- CROSS-RESPONDENT,
CONSUMER FINANCE CORPORATION, FIFTH-PARTY DEFENDANT.
On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Morris County, L-3135-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: October 31, 2006
Before Judges Kestin, Payne and Lihotz.
This is a dispute over automobile insurance coverage. Richard M. DeMarco appeals from orders denying his motion for summary judgment on his third-party complaint against Cumberland Insurance Company, Inc. (Cumberland), and granting Cumberland's motion for summary judgment and dismissing the third-party complaint. In a conditional cross-appeal, Cumberland argues that, if DeMarco prevails, a consent order dismissing its fourth-party complaint against Amalgamated General Agencies (Amalgamated) should be vacated and the fourth-party complaint reinstated.*fn1 Amalgamated joins Cumberland in arguing that Cumberland's notice of cancellation of the insurance policy at issue was effective and the trial court's summary judgment rulings were correct.
The lawsuit began as a personal injury action arising from a motor vehicle accident, in which DeMarco was named as one of the defendants. After the plaintiffs in the matter settled their claims against other defendants and by taking payment from their own insurer under the uninsured motorist provisions of their policy, that carrier, subrogated to their rights, sued DeMarco for the amount paid, $300,000. DeMarco claimed coverage under a policy of insurance issued by Cumberland to Consumer Finance Corporation (CFC), the owner of the vehicle DeMarco had been driving at the time of the accident. Cumberland disclaimed and DeMarco filed his third-party complaint. That complaint generated Cumberland's fourth-party complaint against the insurance agent, Amalgamated, which, in turn, sued CFC in a fifth-party complaint.
Because the issues before the trial court arose on motions for summary judgment, the court was obliged, in considering Cumberland's motion, to view the facts of the matter indulgently in favor of the non-movant, DeMarco. See Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995). We are governed by the same standard. See Prudential Property Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div. 1998).
The questions in this matter have nothing to do with the scope of coverage under the policy. Rather, they bear upon cancellation and the notice required by law when an insurance carrier cancels an insurance policy.
The parties have not addressed DeMarco's standing to litigate the effectiveness of a policy of insurance issued to another, and we will not consider the question. DeMarco's connection with CFC, the owner of the vehicle he was driving at the time of the accident, is unclear. He testified in a deposition that he did not have an ownership interest in CFC. Apparently, he was not employed by CFC either, but rather was a close friend of CFC's principal, Steven Rosamilia. DeMarco testified that they occupied the "same office space" and "[o]ther than trying to help . . . in a business way[,]" DeMarco was "always try[ing] to give [Rosamilia] advice . . . ."
It is clear, nevertheless, that DeMarco was involved in the events surrounding the cancellation and attempted renewal of the policy. He acknowledged, also, that, while Rosamilia usually dealt with Amalgamated's representative regarding "insurance coverage and other matters[,]" when such calls were received "on occasion[,] . . . I would talk to her, say, hey, the premium[']s going to be late, Steve, and I lent the money for this . . . ."
Taking the factual background as presented by DeMarco, he has given us no reason to reject the motion judge's assessment of the parties' legal rights in respect of the third-party claim. Accordingly, we affirm.
In his arguments, DeMarco emphasizes a change of address request Rosamilia made to Christine Gravel, an employee of Amalgamated; and suggests that the change was either incorrectly recorded by Gravel, or inaccurately reported to Cumberland, or improperly logged into Cumberland's records. Much is made in DeMarco's contentions regarding misaddressed communications from Cumberland, including the notice of cancellation for non-payment of premium. But, it is undisputed that, on March 11, 2002, Gravel sent a copy of the notice of cancellation by facsimile transmission to DeMarco at CFC, with an "Urgent" memorandum entreating payment of the delinquent premium so that it would be received by Cumberland prior to the March 20 cancellation date.
It is also undisputed that CFC, through DeMarco, actually received this communication. DeMarco concedes in his brief: "Gravel specifically instructed DeMarco to stand by the fax machine as she transmitted the fax." It is also undisputed that DeMarco wrote a check for the $1,109.40 due; that the check, with a notation of the policy number, was dated March 19, 2002; that, on the strength of that check, Cumberland, on March 20, 2002, sent CFC a notice rescinding the prior cancellation; and that the check was dishonored for insufficient funds, as memorialized in a "chargeback notice" dated March 29, 2002.
Cumberland, on April 5, 2002, then sent another notice of cancellation to CFC effective April 20, 2002, followed by a confirmation of cancellation to CFC on May 1, 2002. DeMarco contends these latter notices, sent to the correct street address, but with an incorrect post office box number, were never received by him, Rosamilia, or Gravel until after the automobile accident on May 4, 2002. The motion judge found there could be no genuine factual dispute whether DeMarco, particularly, knew, before the accident date, that insurance coverage for the vehicle he was driving had been rescinded. We have been given no reason to gainsay the judge's assessment.
We see no merit in DeMarco's lack-of-constructive-notice arguments regarding the notice of cancellation. He contends that, Cumberland, in one way or another, did not follow existing notice requirements as strictly as prevailing standards dictate. We reject those arguments because there is nothing to construe. It is clear that DeMarco, at least, if not also Rosamilia and CFC, had actual notice well in advance of the accident date that the policy had been cancelled for non-payment of premium, and that DeMarco's effort to pay the premium due with a check for which there were insufficient funds cannot be considered effective to revive the coverage.
The strict and rigorous requirements of law governing an insurance carrier's obligations in canceling coverage--as established in statute, regulation, and decisional law--are meant to protect the policyholder from the risks of operating a motor vehicle after an insurance policy has been cancelled. See Romanny v. Stanley Baldino Constr. Co., 142 N.J. 576, 582 (1995). The detailed procedures mandated by law are designed to provide assurances that every reasonable step has been taken to provide the policyholder with notice of the cancellation. See Lopez v. N.J. Automobile Full Ins. Underwriting Ass'n, 239 N.J. Super. 13, 19-20 (App. Div. 1990). They are not intended as a talisman for forestalling cancellation to be used by a consumer who actually knows that the policy has been cancelled, or to protect any customer who seeks to overcome the risks of non-coverage by issuing a check that is not backed by sufficient funds. See Lilly v. Allstate Ins. Co., 218 N.J. Super. 313, 324-25 (App. Div. 1987); Tucker v. Allstate Ins. Co., 195 N.J. Super. 230, 234 (App. Div. 1984). See also Abdel-Rahman v. Ludas, 266 N.J. Super. 46, 53 (App. Div. 1993) (recognizing that New Jersey has adopted the conditional payment rule).
Another of DeMarco's contentions is of no avail, either: that, had the check been presented for payment to his bank one day later than it was, "there would have been sufficient funds in DeMarco's account because his military pension check was directly deposited on that [later date]." See Lovett v. Alan Lazaroff & Co., 244 N.J. Super. 510 (App. Div. 1990). The argument is, on its face, meritless.
DeMarco's argument that he is entitled to payment by Cumberland of his counsel fees for the defense of the underlying tort action and in respect of his third-party claim are, in the light of the foregoing, also manifestly without merit and do not warrant discussion. See R. 2:11-3(e)(1)(E). Given the conditional nature of Cumberland's cross-appeal, we need not address any of the issues raised therein.