On appeal from Superior Court of New Jersey, Law Division, Sussex County, L-328-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 10, 2008
Before Judges A. A. Rodríguez, Payne and Waugh.
Plaintiff, Selective Insurance Company, filed a declaratory judgment action seeking to void or rescind homeowners' insurance coverage issued to defendant, Laurel Fox, as the result of alleged material misrepresentations that no business was being conducted on the premises, contained in the policy application and a later policy renewal questionnaire, and alleged fraud by Fox in her submission of a claim for damage to a barn on the premises and its contents as the result of a fire. Fox counterclaimed, alleging in counts one and two of her counterclaim that Selective had improperly refused to pay Fox's claims and in count three that it had violated the Consumer Fraud Act, N.J.S.A. 56:8-1 to -166. Both compensatory and punitive damages were sought. Additionally, Fox brought a third-party action against insurance agent, Crum-Genova Insurance Agency, and Fox's fiancé, Michael Stasak, intervened as a plaintiff and joined in Fox's suit against Crum-Genova. Claims against Crum-Genova were later settled under terms that have not been disclosed.
Following cross-motions for summary judgment by Selective and Fox, the motion judge dismissed the punitive damage aspect of Fox's action as well as her claim under the Consumer Fraud Act, but otherwise denied relief. Upon cross-motions for reconsideration, the judge granted summary judgment in Selective's favor, determining that Fox's activity of growing and selling rhododendrons constituted a "business" that she failed to disclose in the policy and renewal applications, thereby materially misrepresenting the activities conducted on the premises and voiding coverage for the fire. Although evidence suggested a basis for finding that Stasak conducted an antiques business from the premises and that Fox was involved in internet sales of antiques, the judge declined to determine whether those sales by Fox and Stasak constituted sufficient continuous activity to constitute a "business" under principles established in Carroll v. Boyce, 272 N.J. Super. 384 (App. Div. 1994).
Fox has appealed; Selective has not filed a cross-appeal. We thus focus solely on the issue of misrepresentation that was determined as a matter of law by the judge. We decline to consider evidence of Fox's and Stasak's sale of antiques in determining issues on appeal.
The facts relevant to this matter follow. In May 1992, Fox purchased property at 376 River Road in Carpentersville, Sussex County, New Jersey. Since that time, Fox has continued to live there with Stasak. The property encompasses thirteen acres and includes a residence, a smokehouse, a small barn and a large barn. In 1995,*fn1 Fox obtained homeowners' insurance coverage for the property from Selective through the Crum-Genova Insurance Agency. Renewals of coverage occurred, and at the time of the fire at issue, renewal coverage was in place, effective from May 28, 2001 to May 28, 2002.
The policy at issue provided, in Section I, coverage for fire loss to Fox's dwelling and "other structures on the 'residence premises' set apart from the dwelling by clear space." However, the policy provided:
We do not cover other structures:
1. Used in whole or in part for "business" purposes.
Business was defined by the policy to "include trade, profession or occupation."*fn2 Additionally, the policy provided in a section titled "Sections I and II - Conditions":
The entire policy will be void if, whether before or after a loss, ...