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Inchon, L.L.C., Russian Radio Network, L.L.C. and Wrbs Radio Ethnic v. the Hartford Fire Insurance Company (A/K/A the Hartford); and the


January 18, 2011


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-6006-07.

Per curiam.


Submitted January 3, 2011 - Decided

Before Judges Lisa and Reisner.

Plaintiffs Inchon, L.L.C., Russian Radio Network, L.L.C., and WRBS Radio Ethnic Media Partners MVI (collectively "Inchon" or "plaintiffs") appeal from a January 23, 2009 trial court order dismissing their complaint on summary judgment in favor of defendants The Hartford Fire Insurance Company and The Hartford Insurance Company of the Midwest (collectively "Hartford" or "defendants"), and from a March 6, 2009 order denying reconsideration. We affirm.


These are the most pertinent facts. Inchon provided its customers with access to foreign language radio stations over a cable modem connection. To provide access, Inchon leased server equipment through several finance companies. Inchon insured the equipment with Hartford under a "marine policy" and a "business policy." Under the terms of the marine policy, Hartford imposed certain duties in the event of loss or damage including:

c. As soon as possible, give us a description of how, when and where the loss or damage occurred. . . .

e. At our request, give us complete inventories of the damaged and undamaged property. Include quantities, costs, values, and amount of loss claimed.

f. Permit us to inspect the property and records proving the loss or damage. Also permit us to take samples of damaged property for inspection, testing and analysis.

i. Cooperate with us in the investigation or settlement of the claim.

The policy also precluded recovery for damages or loss resulting from:

Dishonesty: Dishonest or criminal act by you, any of your partners, "members," officers, "managers," employees, directors, trustees, authorized representatives or anyone to whom you entrust the property for any purpose:

(1) acting alone or in collusion with others; or

(2) whether or not occurring during the hours of employment.

This exclusion does not apply to acts of destruction by your employees; but theft by employees is not covered.

The business policy imposed similar duties on the insured to assist in the investigation of the loss and precluded recovery arising from: fraud, intentional concealment or misrepresentation of a material fact, by you or any other Insured, at any time, concerning 1. This Coverage Part;

2. The Covered Property;

3. Your Interest in the Covered Property; or

4. A claim under this Coverage Part.

In October 2005, Inchon partially relocated the business from Parsippany to Hackensack. On October 10, 2005, an alleged burglary occurred at the company's Hackensack location, during which a significant number of servers and encoders were stolen. A security camera at Inchon's office building recorded a vehicle pulling up to the side entry late one Friday night. Two quarter-inch holes were discovered on the side door, one above the crash bar and one below. The vehicle's headlight shone into the security camera, making it impossible to identify the vehicle or its occupants. Inchon subsequently filed a police report and a claim under each Hartford policy.

Hartford undertook an investigation of the claims. During an interview with a Hartford investigator on October 17, 2005, David Moro, the chief executive officer and president of Inchon, told the investigator that "'[n]othing like that has ever happened to me before so tell me what I have to do, you're the professional investigators." Jonathan Rose, a Hartford Senior Property General Adjuster, certified that on October 18, 2005, he met with Moro to inspect the loss location and discuss the claim. When asked "if he had made any prior insurance claims," Moro responded "no."

Contrary to Moro's statement, Hartford's investigator later learned that on August 17, 2003, Inchon had reported the theft of $300,000 worth of computer equipment and had filed a claim with its insurer at the time, Travelers Insurance. The Travelers adjuster who handled the claim reported that the insurer refused to settle the claim after determining that it was fraudulent. A detective at the Englewood Cliffs Police Department described the suspicious nature of the 2003 theft report, and told the Hartford investigator that the police concluded the report was false but did not arrest Moro.

With respect to the Hartford claim, Moro submitted to an examination under oath (EUO) on January 17, 2006. When asked if Inchon had ever submitted a previous insurance claim during his time with Hartford, Moro responded "no." However, he admitted that he had filed a claim with Travelers Insurance in the summer of 2003. Moro stated that the claim was denied because "we had acquired that equipment as part of a small-company acquisition and although we had listed equipment, we didn't have the serial numbers . . . and it became very difficult to prove individual items." According to Moro, the company ultimately decided that it was not in its best interest to pursue legal action against Travelers for denying the claim. Moro did not mention that the claim was denied because Travelers concluded it was fraudulent.

At Moro's EUO, Hartford demanded that Inchon provide numerous documents concerning the allegedly stolen equipment, including invoices and receipts. A series of letters from defendants' counsel to Inchon's counsel memorialized Inchon's repeated failure to provide the requested documents. The final letter from Hartford's counsel, dated May 12, 2006, specifically threatened to deny coverage due to Inchon's non-cooperation.

Finally, on August 11, 2006, Hartford denied Inchon's insurance claims on the bases that: the allegedly stolen computer servers either did not exist or were worth less than the value represented to the finance companies; the insured made numerous misrepresentations during the course of the investigation, including the existence of a prior claim; and the insured failed to cooperate with Hartford's investigation by supplying the necessary documents.

Later events put the disputed documents conclusively out of reach of either party. On October 31, 2007, the federal government filed criminal charges against Moro. The criminal complaint alleged that in violation of 18 U.S.C.A. § 1342 Moro devised a scheme to defraud Citi Capital Business Technology Finance Group and Hewlett Packard Financial Services Company, both commercial financing companies from whom Moro sought equipment lease financing, by submitting false tax returns and overstating the cost of the computer servers. Inchon's business documents were seized as part of the federal investigation.

On December 10, 2007, Inchon filed suit against Hartford seeking coverage for the allegedly stolen equipment. Hartford moved for summary judgment on December 5, 2008. Hartford argued that Inchon breached the terms of the insurance agreement by misrepresenting that it had not filed a previous insurance claim with Travelers and failing to cooperate with the investigation. In opposition, Moro submitted an affidavit attesting that "Inchon cooperated fully and to the best of its ability with the investigation and processing of the insurance claim." Moro did not address the allegation that he misrepresented the existence of a previous insurance claim.

A hearing on the motion was held on January 23, 2009. In an oral opinion, Judge Harris concluded that there were no genuine issues of material fact and that Hartford was entitled to judgment as a matter of law. Judge Harris found that on at least one occasion, Moro misrepresented to the insurer that he had never filed a previous insurance claim, when there was in fact a claim filed with Travelers Insurance in 2003. The judge reasoned that "whether or not there were similar incidents or other property loss claims . . . are as material as one could imagine for the [insurance] investigators." The judge found no evidence that the misrepresentation was a mere oversight or mistake and concluded that it justified the denial of coverage. He noted that his decision did not hinge on assessing the credibility of Rose, Hartford's investigator, and Moro because Moro did not challenge Rose's allegation of misrepresentation in his opposing affidavit.

The judge also found no genuine dispute that Inchon failed to cooperate with Hartford during the investigation. Moro's abstract statement that "Inchon cooperated fully and to the best of [its] ability" was insufficient to overcome Hartford's evidence demonstrating the contrary. "[I]t explains nothing when compared to the voluminous information in terms of questions asked and the examination under oath, the follow up letters and correspondence."

The judge rejected Inchon's position that summary judgment was inappropriate because discovery had not yet been completed. He reasoned that the plaintiffs did not identify with any specificity the information sought to be obtained through discovery. Additionally, the information necessary to defeat the motion for summary judgment was within the knowledge of plaintiffs, who could supply evidence of the extent of their cooperation and whether there was a misrepresentation regarding the Travelers' claim. A January 23, 2009 order memorialized the court's decision.

Inchon moved for reconsideration on February 11, 2009. In support of that motion, Moro submitted an additional certification in which he alleged for the first time that "Inchon fully disclosed the prior insurance claim filed with Travelers Insurance at all times during the investigation, including during the Examination Under Oath." Moro also asserted that there was no "intention to conceal any prior insurance claims" from Hartford. Additionally, he attested that Inchon "cooperated fully and responded to all discovery requests submitted to it during Hartford's investigation," including the requests that Hartford attached to its summary judgment motion.

In a March 6, 2009 oral opinion, Judge Harris denied the motion for reconsideration. He concluded that Moro's second certification was materially the same as the first, and suffered from the same deficiency. The broad and ambiguous assertion that Moro did not misrepresent the previous claim was insufficient to create a genuine dispute of material fact. Once again, Moro failed to address Hartford's allegation that he misrepresented the existence of the previous insurance claim. Rather, Moro attested that he disclosed the claim with Travelers during the EUO, which was approximately three months after the alleged misrepresentation.

Judge Harris also found no competent evidence that Inchon complied with Hartford's document requests. He noted that federal investigators seized most, if not all, of the information being sought by Hartford. However, the seizure did not justify Inchon's non-compliance because it occurred a year after Moro's EUO, when defendants first asked for the documents.


Our review of the trial court's summary judgment decision is de novo. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Using the Brill*fn1 standard, we determine whether, giving the non-moving party the benefit of all favorable inferences, the undisputed material facts entitle the moving party to judgment. See Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 374 (2010).

Having reviewed the entire record with that standard in mind, we agree with Judge Harris that the case was ripe for summary judgment, plaintiffs' complaint was properly dismissed, and the reconsideration motion was appropriately denied. Except as addressed below, plaintiffs' appellate contentions are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons stated in the judge's oral opinions issued January 23, 2009, and March 6, 2009. We add the following comments.

In its summary judgment motion, Hartford presented legally competent evidence that Inchon had failed to cooperate with its document demands. In response, Inchon presented only general and conclusory statements from Moro that Inchon had fully cooperated with defendants' investigation and had provided the documents Hartford demanded. However, Moro provided no specifics as to the documents provided, the dates they were provided, who provided them or to whom they were sent.

Because Hartford's attorney was dealing with Inchon's attorney on these document requests, it is inconceivable that Inchon would have no written proof that it provided the requested documents. Had its attorney sent them to Hartford's attorney, there surely would have been at least a file copy of a cover letter transmitting the documents. Moro's conclusory and self-serving assertions, without supporting legally competent evidence, were insufficient to defeat defendants' summary judgment motion. See Puder v. Buechel, 183 N.J. 428, 440-41 (2005); Hoffman v., Inc., 404 N.J. Super. 415, 425-26 (App. Div. 2009). On this record, Hartford's undisputed evidence establishes that Inchon breached the cooperation clause by failing to provide the requested documents. See DiFrancisco v. Chubb Ins. Co., 283 N.J. Super. 601, 611 (App. Div. 1995); Brill, supra, 142 N.J. at 540.

Inchon also failed to submit legally competent evidence to contradict the sworn statement of Jonathan Rose that Moro told him that plaintiffs had never previously made an insurance claim. Moro's statement to Rose was palpably false. Inchon had previously made an insurance claim based on theft, a claim its insurer, Travelers, denied. That information was material to Hartford's investigation of Inchon's theft claim. See Longobardi v. Chubb Ins. Co. of New Jersey, 121 N.J. 530, 541-42 (1990). Moro did not admit making the previous insurance claim until months later, at his EUO.

Finally, in 2007, a federal criminal complaint was filed against Moro in connection with the equipment involved in this insurance claim, alleging that Moro participated in a scheme to defraud a number of financing entities for the cost of equipment leases and that he made false statements in connection with the theft claim. While this appeal was pending, Hartford submitted a copy of the November 16, 2010 verdict sheet in the federal criminal action. We took judicial notice of this document, in which a jury convicted Moro of thirty-three counts of mail fraud, wire fraud, bank fraud, money laundering, and making false and fraudulent statements to government officials.

In summary, we find no basis to disturb Judge Harris' well-reasoned decisions granting summary judgment and denying Inchon's motion for reconsideration.


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