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Janicky v. Point Bay Fuel

November 28, 2007

THOMAS AND KAREN JANICKY, PLAINTIFFS-RESPONDENTS,
v.
POINT BAY FUEL, INC., AND USF INSURANCE COMPANY, DEFENDANTS, AND THE POWDERHORN AGENCY, INC., DEFENDANT-APPELLANT.



On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-3278-04.

The opinion of the court was delivered by: Skillman, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued October 30, 2007

Before Judges Skillman, Winkelstein and Yannotti.

This appeal presents another illustration of the recurrent problem of a litigant securing a certification of finality from a trial court under circumstances that do not qualify for such certification in order to circumvent this court's exclusive authority to determine whether leave should be granted to appeal an interlocutory order.

Plaintiffs own a single-family residence in Brick. Defendant Point Bay Fuel supplies heating oil to residential customers and also repairs and maintains their fuel oil systems. In addition, Point Bay sells its customers a fuel oil service protection program called a "ProGuard Accidental Release Protection Certificate." This program entitles purchasers to reimbursement, up to the maximum amount specified in the Certificate, for the costs of cleaning up oil accidentally released from their fuel oil systems and of repairing or replacing those systems.

Defendant Powderhorn Agency is the promoter and administrator of the ProGuard Certificate program. A fuel oil dealer that participates in the program, such as Point Bay Fuel, forwards the money paid by its customer to purchase a Certificate to Powderhorn Agency, which arranges for an insurer to issue a policy that covers the risk of any claim.

Point Bay Fuel sold a ProGuard Certificate to plaintiffs for a term running from March 1, 2003 through March 1, 2004. Point Bay forwarded plaintiffs' payment for the certificate to Powderhorn Agency, which obtained insurance from defendant USF Insurance Company for the obligations Point Bay assumed under the certificate.

On August 22, 2003, plaintiffs discovered an accidental fuel oil discharge on their property and subsequently submitted a claim to defendants for the costs of cleanup. However, defendants refused to pay part of plaintiffs' claim.

As a result, plaintiffs filed a six-count complaint against Point Bay, Powderhorn Agency and USF for breach of the contractual obligations undertaken by defendants under the ProGuard Certificate. This complaint also asserted claims for violations of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, based on defendants' alleged failure to disclose that Point Bay was not authorized to issue insurance, and of statutes governing the sale of insurance.

Powderhorn Agency and USF filed a motion to dismiss based on a provision of the ProGuard Certificate mandating arbitration. The trial court denied the motion, but entered an order requiring plaintiffs' breach of contract claims to be submitted to arbitration while retaining jurisdiction of plaintiffs' claims under the Consumer Fraud Act and the statutes governing the sale of insurance.

Powderhorn Agency and USF subsequently moved for summary judgment on the ground that the trial court should not consider plaintiffs' Consumer Fraud Act and insurance claims, because the Department of Banking and Insurance has primary jurisdiction over the threshold issue of whether the ProGuard Certificate is an insurance contract or a contract for services. Plaintiffs filed a cross-motion for summary judgment seeking a declaration that the ProGuard Certificate is an insurance contract.

In response to these cross-motions, the trial court issued a letter opinion which concluded that plaintiffs' ProGuard Certificate is a contract of insurance. After mistakenly entering an order that granted plaintiffs' partial summary judgment on their Consumer Fraud Act and insurance claims, the court entered an amended order which indicated that its ruling was purely declaratory on the issue of ...


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