May 26, 2010
RAMON MERCEDES, PLAINTIFF-RESPONDENT,
RUTGERS CASUALTY INSURANCE COMPANY, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5972-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 11, 2010
Before Judges Grall and LeWinn.
Defendant Rutgers Casualty Insurance Company appeals from a jury verdict in favor of plaintiff Ramon Mercedes on his claim that Rutgers breached a contract of homeowner's insurance by denying him coverage for property damage caused by a fire that started on his neighbor's property.*fn1 The jurors rejected Rutgers' claim that Mercedes' application included a material misrepresentation and determined that Rutgers had not delivered the policy upon which it relied to deny coverage. Rutgers objects to the jury instructions and the verdict sheet. Finding no merit in these arguments, we affirm.
On September 27, 2006, Mercedes applied for a policy of homeowner's insurance to cover a two-family dwelling in Bayonne he had contracted to purchase. When he applied for the policy, Mercedes intended to reside in one unit with his girlfriend and rent the other. The real estate transaction was closed in October 2006. Thereafter, Mercedes commenced renovations, and his girlfriend ended their relationship. Mercedes determined that he would not be able to cover expenses without his girlfriend's assistance until the summer of 2007, when members of his family would be able to assume occupancy with him and share costs. For that reason, he leased both units on a month-to-month basis.
The policy was issued to cover the period from September 28, 2006 to September 28, 2007. According to Mercedes' testimony at trial, he received the declarations page from his broker, but he never received the policy. The declarations page included a specification of the policy period, the coverages afforded and the policy limits.
The declarations page does not recite the policy provisions, which are incorporated by reference. Under the terms of the policy, the premises insured is a "[r]esidence premises," a term which is defined to include a "two, three or four family dwelling" in which the insured "reside[s] in at least one of the family units."
The fire that damaged Mercedes' two-family dwelling broke out on his neighbor's property on April 1, 2007. At that time, both units were occupied by Mercedes' tenants. Rutgers denied coverage.
Mercedes filed a complaint alleging that Rutgers' denial of coverage was a breach of the insurance contract. Rutgers filed a counterclaim. Rutgers alleged that it was not obligated to provide coverage because Mercedes misrepresented his intention to reside in the dwelling when he applied for the policy. In the alternative, Rutgers contended that no coverage was due under the policy because Mercedes did not reside in one of the units.
At trial, Mercedes denied any knowing misrepresentation and asserted that Rutgers failed to deliver the policy to him. That is the only document indicating that coverage under the policy is conditioned upon Mercedes' residing in one of the units. Celeste Paslay, the supervisor of Rutgers' mail room, testified on behalf of her employer as to the delivery practices regularly employed by Rutgers upon issuance of a new policy. She explained that the declarations page and policy are mailed together to the insured. There was no evidence of a record held by Rutgers indicating a mailing to Mercedes, and there was no record indicating the return of any mail sent to him, which Rutgers would have kept if the policy had been mailed and returned.
The jury determined that Mercedes established a breach by Rutgers and that Rutgers failed to establish a misrepresentation by Mercedes.
On appeal, Rutgers contends that delivery was not a material question for determination by the jury because the caption on the declarations page - "HOMEOWNER POLICY PROGRAM" - is sufficient as a matter of law to give the insured notice that the policy is issued to one who owns a structure and makes that structure his or her home. Even if we were to assume that delivery of a declarations page could satisfy the insurer's obligation to give notice of this limitation on coverage for his two-family dwelling, we could not conclude, as Rutgers urges, that use of the caption "HOMEOWNER POLICY PROGRAM" is sufficient to alert an insured that coverage is unavailable to an insured who owns a two-family home but rents both units. The plain and ordinary meaning of the term "homeowner" does not, as Rutgers argues, exclude a person who rents a residence he or she owns. See Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001) (requiring an interpretation of insurance policies in accordance with the plain meaning of the terms and consistent with the "reasonable expectations" of the insured).
Rutgers also contends that the judge's instruction to the jury did not give an adequate explanation of an insurer's obligations with respect to delivery. During the charge conference, the attorney for Rutgers did not alert the court to additional language that should be included in the charge. Rather, in an attempt to distinguish Sears Mortgage Corp. v. Rose, 134 N.J. 326 (1993), a case involving title insurance, the attorney for Rutgers argued:
I would suggest that there are other circumstances where it may be okay to provide a copy of a policy to some agent of the insured. I - I feel that what we're doing here by instructing the jury, we're giving them something that is very definitive, and that's not the status of the law. It is not this definitive no-exceptions circumstance.
I think that it may be too tedious to give them all of the exceptions that exist out there, and that the better alternative would be not to instruct them on the delivery of the policy issue at all.
When asked, at oral argument on this appeal, to identify information that was erroneously included in or omitted from the jury instruction on delivery, counsel for Rutgers indicated that the error was in giving the charge not its content. The implicit assertion is that Rutgers could rely on a provision of a policy it did not deliver to justify the denial of coverage specified on a declarations page received by the insured. The argument lacks sufficient merit to warrant any further discussion. R. 2:11-3(e)(1)(E); see Zacarias, supra, 168 N.J. at 602-04 (discussing interpretation of declarations pages and policy provisions).
Finally, Rutgers contends, for the first time on appeal, that the verdict sheet was confusingly inadequate because it did not call for the jury to make a specific finding on delivery. Rutgers' denial of coverage was undisputed; the only factual dispute relevant to Rutgers' breach was whether Rutgers had delivered the policy upon which it relied. In this circumstance, the omission of a specific question about delivery from the verdict sheet was not error; obviously, it was not error "clearly capable of producing an unjust result." R. 2:10-2.