On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-4263-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 31, 2007
Before Judges Cuff and Lisa.
Based upon injuries allegedly incurred in an automobile accident on September 3, 2004, plaintiff brought this action against the driver of the other vehicle, Steven W. McCarthy, and the owner of that vehicle, Republic Service of NJ, LLC, for compensatory damages, and against plaintiff's automobile insurer, Clarendon National Insurance Company, for personal injury protection (PIP) benefits. Judge Quinn granted defendants' summary judgment motions, finding that plaintiff's policy had been cancelled for non-payment of premium prior to the accident, as a result of which (1) Clarendon was not obligated to pay PIP benefits to plaintiff, and (2) as an uninsured motorist, plaintiff was prohibited by statute from pursuing a personal injury action. Plaintiff argued before the trial court that because Clarendon had previously accepted late payments from plaintiff, a material issue of fact existed as to whether Clarendon waived its right to terminate plaintiff's policy for late premium payment, as a result of which plaintiff should have withstood summary judgment. The judge rejected that argument. Plaintiff makes the same argument on appeal. We reject it as well and affirm.
The Clarendon policy period was from October 23, 2003 to October 23, 2004, with an annual premium of $989, payable in six installments, each due on a specified date. Plaintiff paid each of the first four installments after the due date. Clarendon accepted and retained each of those payments. When plaintiff failed to pay the fifth installment by the due date, Clarendon issued a notice of termination, advising plaintiff that if he did not make the payment by July 7, 2004, his policy would be cancelled. The notice further advised that if Clarendon received payment postmarked before the termination date, plaintiff's coverage would be reinstated. Plaintiff made the payment by check dated July 5, 2004 and Clarendon apparently received the check (or it was at least postmarked) before July 7, 2004. As a result, Clarendon reinstated plaintiff's policy with no lapse in coverage, and so notified plaintiff.
When plaintiff failed to timely pay the sixth installment, Clarendon issued another notice of termination, advising plaintiff that if he did not make the payment by September 1, 2004, his policy would be cancelled. Like the prior notice, it also advised plaintiff that if Clarendon received payment postmarked before the termination date, his coverage would be reinstated. Plaintiff issued a check for the required amount dated August 30, 2004, but did not mail it until September 1, 2004, as reflected by the postmark bearing that date. On September 7, 2004, Clarendon returned plaintiff's check, advising that it was returned because the policy was cancelled for non-payment on September 1, 2004, and confirming that the envelope was postmarked on September 1, 2004. On September 9, 2004, Clarendon sent plaintiff a "Confirmation of Cancellation," formally confirming that plaintiff's policy was cancelled for non-payment of premium effective September 1, 2004.
The record does not reveal the date on which plaintiff notified Clarendon of the September 3, 2004 accident or the date on which plaintiff applied for PIP benefits. The record contains Clarendon's letter to plaintiff of April 30, 2005 denying his PIP claim because the policy had been cancelled prior to the date of the accident. There is no suggestion in the record that Clarendon was aware of the accident when it returned plaintiff's premium check and notified plaintiff of cancellation of the policy.
When considering a motion for summary judgment, the judge must decide whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party. . . . If there exists a single, unavoidable resolution of the alleged disputed issue of fact, that issue should be considered insufficient to constitute a "genuine" issue of material fact for purposes of Rule 4:46-2. [Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).]
On appeal, we apply the same standard as the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We decide first whether there was a genuine issue of material fact. Ibid. If there was not, we then decide whether the trial court's ruling on the law was correct. Ibid.
Applying the Brill standard, we agree with Judge Quinn that, viewing the evidence most favorably to plaintiff, a rational factfinder could not find in his favor, and defendants were entitled to judgment as a matter of law.
As a general principle, an insurer can waive any provision in an insurance policy included for its benefit. Bruni v. Prudential Ins. Co. of Am., 51 N.J. 408 (1968), rev'g on dissent 100 N.J. Super. 154, 159-68 (App. Div. 1967). A waiver of a forfeiture or cancellation provision can be found where "the conduct of the insurer gives reasonable grounds to the assured, as a layman unversed in insurance provisions, to believe that such a forfeiture will not be incurred and the assured relies thereon to his prejudice." Bruni v. Prudential Ins. Co. of Am., 100 N.J. Super. 154, 164 (App. Div. 1967) (Carton, J., dissenting) rev'd on dissent, 51 N.J. 408 (1968). Accordingly, if a fact-finder could reasonably conclude that an insurer affirmed an insurance contract after receiving information of fraud or breach, the issue is one of fact for the jury. Bonnet v. Stewart, 68 N.J. 287, 294 (1975).
Applying this principle, New Jersey courts have only recognized waiver in cases where the insurer either retained a late premium payment or engaged in some other course of conduct that clearly manifested an intent on the part of the insurer to continue coverage. See, e.g., Bonnet, supra, 68 N.J. at 296 (material issue of fact as to whether insurer waived its right to cancel coverage for non-payment of premium after it retained the late premium payment); Bruni, supra, 51 N.J. at 409 (material issue of fact as to whether insurer had any intention of canceling the policy after it retained the insured's late premium payment and sent an agent to the insured's home to obtain the additional premium it needed for reinstatement); Allen v. Metropolitan Life Ins. Co., 44 N.J. 294, 296-98, 312 (1965) (insurer could not cancel policy after it accepted payment of first premium and told insured there would be immediate coverage upon payment); Merchants Indemnity Corp. v. Eggleston, 37 N.J. 114, 131-32 (1962) (insurer affirmed policy because it continued to represent an insured in a lawsuit even after it found out coverage was fraudulently obtained); Iafelice v. Arpino, 319 N.J. Super. 581, 589 (App. Div. 1999) (insurer waived its right to cancel coverage after it gave the insured an opportunity to correct a faulty check); Englishtown Auction Sales, Inc. v. Mount Vernon Fire Ins. Co., 112 N.J. Super. 332, 335-36 (App. Div. 1970) (insurer's receipt and retention of insured's partial payment constituted a waiver of the previously issued cancellation notice); Barbera v. John Hancock Mut. Life Ins. Co., 127 N.J.L. 122, 125 (Sup. Ct. 1941) (fact question as to whether insurer's "conscious and unconditional" retention of the premiums until after the death of the insured manifested an intent to keep the policy in force).
Unlike those cases, Clarendon did not retain plaintiff's late payment that was received after the cancellation date set forth in the termination notice, nor did it engage in conduct manifesting an intent to continue plaintiff's coverage after the cancellation date. On the contrary, Clarendon sent plaintiff a termination notice that complied with the statutory requirements, see N.J.S.A. 17:29C-8 and -10, and the ...