March 11, 2009
IVAN VALENTIN AND SANDY VALENTIN, PLAINTIFFS-APPELLANTS,
FRANSISCO J. BATISTA, DEFENDANT, AND LIBERTY MUTUAL INSURANCE CO., DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-7882-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 30, 2009
Before Judges C.L. Miniman and King.
This is a claim for $120,000 in personal injury protection (PIP) benefits under a motor vehicle insurance policy. We conclude that the case should not have been decided on summary judgment under Rule 4:46, but should have gone to a plenary hearing because issues of material facts and the reasonable inferences which could be drawn from those facts required determination at a plenary hearing.
On June 22, 2004 at 4:30 p.m. plaintiff's named insured, Ivan Valentin, was driving his 1989 Ford F-150 pick-up truck on the Garden State Parkway in Lakewood. Because of heavy rain and a malfunctioning windshield wiper, plaintiff pulled off onto the side of the Parkway and stopped his truck in a grassy area. While parked, his pick-up truck was hit in the rear by a MAX box truck operated by defendant, Fransisco J. Batista. Plaintiff suffered a severe left knee injury and had two surgeries with total medical expenses of $120,000, none paid by his PIP insurance carrier. He may require future surgery.
At the time of the accident, the plaintiff's 1989 Ford F-150 pick-up truck was covered by automobile insurance under a standard Liberty Mutual Insurance Company (Liberty) automobile policy, which included coverage for PIP benefits effective March 27, 2004 to March 27, 2005. See N.J.S.A. 39:6A-4. The same Liberty policy also insured plaintiff's 2001 Dodge Caravan as a private passenger vehicle. The policy provided PIP coverage for each vehicle under separate premium charges.
Eventually, Liberty disclaimed PIP coverage. The record is unclear as to when, if ever, a formal denial of the claim actually occurred. Plaintiff claims this did not occur until more than two years post-accident, in October 2006. In an October 17, 2006 certification filed in this litigation, Liberty's attorney stated in paragraph six that the carrier denied PIP benefits because the vehicle was not being used as a personal vehicle at the time of the accident, as allegedly required by the policy. Curiously, the same attorney, on December 5, 2006 signed and filed a certification stating that the information in paragraph six of the October certification was "inaccurate" and "an inadvertent error" and that "to date, Liberty Mutual Fire Insurance Company has not denied Mr. Valentin's claim." The second certification was made almost three years post-accident.
Plaintiff asserted that throughout this matter he advised Liberty of the true status of his use of the vehicle. The original use was exclusively personal, particularly for his hobbies: fishing and hunting. Sometime in 2003 or 2004 he changed the registration to commercial so that he could put advertising on the outside of the truck for his new landscaping business.
Plaintiff states that this "occasional business" use was explained to Liberty's representative in a recorded interview on January 11, 2005. When the policy again was renewed in 2005 under a commercial vehicle registration, plaintiff said Liberty well knew the truck's use because Liberty had received a copy of the commercial registration, as required. Plaintiff insists that Liberty was copied with the commercial registration each time the vehicle was so registered and has provided appropriate certifications to this effect.
Plaintiff asserts that Liberty, while fully informed of the change to a commercial registration and an occasional business use, continued to collect premiums; never cancelled any vehicle coverage, PIP or otherwise; and continued to collect the premium on the standard auto policy. Plaintiff contends that Liberty should not now be permitted to treat the policy as void ab initio, especially since it never questioned the change to a commercial registration while knowing of occasional business use.
Plaintiff explained that he registered the truck as a commercial vehicle in order to promote the business he hoped to be able to operate in the future. He explained that business was slow and he had the truck parked "across the street" for public view as advertising. Defendant certified and deposed that he always sent Liberty a copy of his commercial registration when they asked for it and Liberty never contacted him or protested with respect to the commercial registration or the nature of his actual use.
The evidence is sufficient here to create a factual dispute on the ultimate question as to the extent of Liberty's coverage under the policy, particularly as to PIP benefits. The underwriting file and the policy file are contained in the record before us with a certification by defense counsel, who admitted during oral argument that she did not have any personal knowledge about these files. Some knowledgeable person should have been available to testify about the underwriting file insofar as it may help explain to any extent this murky coverage situation. See R. 1:4-4(b) ("Certification in Lieu of Oath"). Rank hearsay without personal knowledge of an underwriting or policy file is not good enough. R. 1:6-6; Murray v. Allstate Ins. Co., 209 N.J. Super. 163, 169 (App. Div. 1986), appeal dismissed, 110 N.J. 293 (1988).
Plaintiff, in sum, claims that Liberty decided to do its underwriting, and claim the policy was void, only after the June 22, 2004 accident. Plaintiff stresses that Liberty well knew of the change to a commercial registration and the incidental business use at the time of the accident and of periodic registration renewals.
Of course, the vague concept of "customary usage" arises because of N.J.S.A. 39:6A-2a which states in pertinent part:
"Automobile" means a private passenger automobile of a private passenger or station wagon type that is owned or hired and is neither used as a public or livery conveyance for passengers nor rented to others with a driver; and a motor vehicle with a pickup body, a delivery sedan, a van, or a panel truck or a camper type vehicle used for recreational purposes owned by an individual or by husband and wife who are residents of the same household, not customarily used in the occupation, profession or business of the insured other than farming or ranching.
Plaintiff asserts that while his use was on business at the time of the accident, this was an incidental use, not a "customary" use, which should not in itself void the policy. The policy (and the statute) does not exclude pick-up trucks with "commercial" registrations; it only by definition excludes pickup trucks used customarily in business from the definition of automobile.
Finally, as we view the present record, Liberty actually never did officially void or cancel the policy ab initio and return the premium. Liberty simply denied the PIP claim which plaintiff submitted, arguably because of the change to a commercial registration and the alleged incidental business use on the day of the accident. Of course, the plaintiff says this was not a customary use of the pick-up. Liberty appears to contend that the pick-up was customarily used in business.
We recall Judge Carton's dissent in a suit on a policy where the facts were not clear as to the insurer's actions in denying the claim. His dissent in this court was the basis for the Supreme Court's reversal of a dismissal after the plaintiff's case. This premature dismissal procedurally and practically "served to camouflage the basic issue by permitting to remain undivulged relevant evidence as to conduct of the insurer and its agents which could not fail to shed light on the waiver issue, as well as on the veracity of plaintiff's testimony." Bruni v. Prudential Ins. Co. of Am., 100 N.J. Super. 154, 159 (App. Div. 1967) (Carton, J. dissenting), rev'd on dissent, 51 N.J. 408 (1968). Judge Carton in Bruni explained that the evidence created a sufficient question of fact to require the insurance company to proceed with a defense before the trier of fact and the Supreme Court agreed. So the record is here. See Merchs. Indem. Corp. of N.Y. v. Eggleston, 37 N.J. 114, 130-31 (1962) (explicating principles of waiver and estoppel in insurance disclaimers).
In our view, the evidence before the motion judge was not so clear and one-sided that Liberty should prevail as a matter of law. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 533 (1995). We are confident that a plenary hearing will expose all of the facts in a clear and orderly manner and ensure a proper result based on truth.
We reverse and remand for a plenary hearing.
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