On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, L-5850-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Winkelstein, Gilroy and Chambers.
Defendants John and Rose Rehm own a single-family home in Budd Lake. They hired defendant Old Red House Construction as a general contractor to perform renovations to their home. Plaintiff Alexander Porowski was an independent carpenter, engaged by Old Red House, to do wood framing for the renovations. Defendant Hartford Casualty Insurance Company was the general commercial liability carrier for Old Red House. Plaintiff, who was seriously injured while performing work at the Rehms' home, brought claims against Old Red House, the Rehms and Hartford. During the litigation, the plaintiff dismissed his claims against the Rehms and Old Red House defaulted.
After the trial court twice denied Hartford's motion for summary judgment, the parties entered into a consent order in which judgment was entered against Hartford and Old Red House for $850,000. The order reserved to Hartford the right to appeal from the trial court's denial of its summary judgment motions. On appeal, Hartford claims, as it did in the Law Division, that: (1) plaintiff lacked standing to assert a direct cause of action against Hartford; (2) plaintiff had no right to coverage through Old Red House because Hartford properly cancelled Old Red House's policy for nonpayment of its premium, and gave proper notice to Old Red House of the cancellation; and (3) plaintiff is not a third party beneficiary of the certificate of insurance that Hartford issued to the homeowners. We agree with defendant's arguments and consequently conclude that summary judgment was warranted, dismissing plaintiff's claim against Hartford.
Before construction began, upon the Rehms' request, Old Red House provided the Rehms with a certificate of liability insurance. Hartford issued the certificate, dated November 26, 2002, naming Old Red House as the insured, and designating Jack Rehm as the "Certificate Holder." The certificate states that Old Red House was insured under a commercial general liability policy with an aggregate limit of two million dollars, with a maximum of one million dollars for each occurrence, effective from October 20, 2002 to October 20, 2003.
At the top of the first page of the certificate is a disclaimer, in all capital letters, that reads:
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
The certificate also contains the following cancellation provision:
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 10 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED [HEREIN], BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR REPRESENTATIVES.
A disclaimer on the reverse side of the certificate states: "The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s) and authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies issued thereon." The insurance policy referenced by the certificate only identifies Old Red House as an insured. No "additional insureds" are identified on the policy.
On March 14, 2003, Hartford cancelled the policy due to Old Red House's failure to pay premiums, and notified Old Red House accordingly. Neither Hartford nor Old Red House notified the Rehms that the insurance policy had been cancelled. Old Red House continued renovations to the Rehms' home, and plaintiff was injured on April 23, 2003, more than a month after the policy was cancelled.
On April 28, 2003, Old Red House sought a reinstatement of its policy; Michael Racanella, the principal of Old Red House, certified to Hartford that he was unaware of "any claims or any occurrences which may give rise to claims under the policy," from March 14, 2003 (the date of cancellation) to April 28, 2003 (the date of reinstatement). That statement was false because Racanella was present when plaintiff was injured. Based on Racanella's certification, Hartford initially reinstated the policy with "no lapse in coverage," but on October 20, 2003, Hartford notified Old Red House that Racanella's certification constituted a material misrepresentation because it did not advise Hartford of the April 23, 2003 incident involving plaintiff. As such, Hartford ...