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Verbesky v. Liberty Mutual Insurance Co.


April 22, 2009


On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Morris County, Docket No. DC-5663-07.

Per curiam.


Submitted November 19, 2008

Before Judges Rodríguez and Waugh.

Plaintiff Steven Verbesky, the subrogee of his daughter Stevie Lee Verbesky, appeals from a no cause decision, following a bench trial, of his declaratory judgment suit against defendant Liberty Mutual Insurance Company (Liberty Mutual). We affirm.

It is undisputed that in May 2004, Stevie Lee purchased a 2004 Hyundai Tiburon. Plaintiff co-signed the purchase loan. In October 2005, Stevie Lee applied for insurance through the New Jersey Personal Automobile Insurance Plan (PAIP) because she was not eligible for insurance coverage in the voluntary insurance market. Licensed Insurance Agent Robert Seidenberg assisted her. The Plan assigned Liberty Mutual as Stevie Lee's insurance carrier. Liberty Mutual issued a one-year policy of insurance beginning October 4, 2005.

Stevie Lee supplied a Florida driver's license and a Michigan vehicle registration to Liberty Mutual. Liberty Mutual advised her of her obligation to furnish proof of the vehicle's New Jersey registration and that the failure to do so, or provide a valid New Jersey Driver's License, could result in the cancellation of her policy. According to Liberty Mutual, this letter was sent to Stevie Lee's address of record in East Hanover, New Jersey and a copy was sent to her insurance agent, Robert Seidenberg. Because Liberty Mutual did not receive a valid New Jersey Driver's License or a New Jersey vehicle registration, on December 6, 2005, Liberty Mutual mailed a Notice of Cancellation to Stevie Lee at the East Hanover address, advising of the policy's cancellation effective December 21, 2005. A copy of the Notice of Cancellation was also sent to Seidenberg. Upon mailing of the December 6, 2005 Notice of Cancellation, proof of mailing of the notice was duly recorded by Liberty Mutual.

A separate cancellation notice was mailed to Stevie Lee by the Finance Department at Liberty Mutual on December 23, 2005. This separate cancellation notice indicated the policy would be cancelled as of January 12, 2006, based on Stevie Lee's failure to pay her policy premiums. Thus, the policy was subject to cancellation for two independent reasons: failure to provide a New Jersey driver's license or registration; and failure to make premium payments. The policy was cancelled on December 21, 2005, pursuant to the first notice of cancellation.

On January 8, 2006, Stevie Lee was involved in an accident while operating the Tiburon. The vehicle was severely damaged and declared a total loss. Liberty Mutual disclaimed coverage on the basis that the policy had been cancelled on December 21, 2004, pursuant to the first notice of cancellation. Plaintiff paid the remaining balance due on the purchase loan for the Tiburon. Stevie Lee assigned all her rights in connection with this claim against Liberty Mutual to her father. Plaintiff filed this declaratory judgment action against Liberty Mutual, alleging a breach of contract and seeking to recover the value of the Tiburon.

Judge Michael Wright tried the matter without a jury. Stevie Lee testified at trial that she did not receive the October 28, 2005 letter or the December 6, 2005 cancellation notice because she had been the victim of identity theft, and would often not get her mail in a timely manner. She admitted that she never registered the Tiburon in New Jersey. She also admitted to receiving the second termination notice. She concluded that, pursuant to this notice, the Tiburon was insured until January 12, 2005.

David Moorhead, a manager in the Liberty Mutual Underwriting Department, testified as to the requirements for a valid policy cancellation for an insured's failure to comply with PAIP regulations. The cancellation notice must be mailed to the insured at their last known address and a proof of mailing, which indicates that the cancellation notice was, in fact, mailed to that address, must also be prepared and made a part of the underwriting file. According to Moorhead, and based on his review of the file, these procedures were followed in this case.

Judge Wright did not credit Stevie Lee's testimony that she had not received the first cancellation notice. The judge found as a fact that Liberty Mutual had satisfactorily demonstrated, as required by N.J.S.A. 17:29C-10, that the first termination had been mailed. The judge also found that Stevie Lee could not reasonably have relied upon the second termination letter that her policy would not be cancelled until January 12, 2005.

Plaintiff contends on appeal that "Liberty Mutual should be estopped from denying coverage as a result of conflicting termination notices sent to the insured." Plaintiff also contends that "Liberty Mutual failed to submit proper or adequate proofs to cancel the insured's insurance policy in accordance with N.J.S.A. 17:29C-10." His arguments are that the termination was ineffective because: (1) Liberty Mutual failed to prove service of the first termination letter; and (2) Stevie Lee received a second termination letter from Liberty Mutual, notifying her that the policy would be terminated as of January 12, 2006, unless the premium was paid. Plaintiff argues that the second termination created an ambiguity as to the date of termination, which should be decided against Liberty Mutual. Lastly, plaintiff argues that Liberty Mutual's proofs are deficient because the certification of mailing stamped on Liberty Mutual's copy is not signed, and the postal proof of mailing is not signed.

We reject these contentions and arguments, which are essentially a challenge to the judge's findings. It is "improper for the Appellate Division to engage in an independent assessment of the evidence as if it were the court of first instance." State v. Locurto, 157 N.J. 463, 471 (1999). Where the fact-finder has made credibility determinations, if the reasons for the trier of fact's determination may be inferred from the record, we are not free to make our own credibility determination. Id. at 472-75. When error is alleged in a judge's fact-finding, our scope of review is limited. We will only decide whether the findings made could reasonably have been reached on "sufficient" or "substantial" credible evidence present in the record, considering the proof as a whole. We give Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974).

Here, we conclude that there was sufficient testimony at trial for the judge to conclude that the proof of mailing satisfied the statutory criteria. Plaintiff relies on Celino v. General Accident Ins., 211 N.J. Super. 538 (1986). In Celino, the carrier admitted that it did not retain a contemporaneous copy of the termination. Here, there was proof that a contemporaneous copy had been retained. Moreover, pursuant to N.J.R.E. 406(a):

Evidence, whether corroborated or not, of habit or routine practice is admissible to prove that on a specific occasion a person or organization acted in conformity with the habit or routine practice.

Moorhead's testimony, which the judge credited, was sufficient to establish that the first notice was received by Stevie Lee. The policy was thus cancelled as of December 21, 2005.

Further, the judge found as a matter of fact that, because the two notices of cancellation indicated the policy was subject to cancellation on separate, independent grounds, no reasonable person could believe the policy coverage would continue past December 21, 2005. In light of the judge's finding that Stevie Lee's testimony lacked credibility, and given the substantial deference afforded such factual determinations where they are supported by substantial, credible evidence in the record, we see no reason to reject this finding. Therefore, the argument that a reasonable person would have understood that the second notice of cancellation created an ambiguity is rejected.



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