On appeal from Superior Court of New Jersey, Law Division, Middlesex County, L-2151-07.
The opinion of the court was delivered by: Parrillo, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo, Yannotti and Espinosa.
The opinion of the court was delivered by PARRILLO, P.J.A.D.
Plaintiff, AMB Property, LP (plaintiff), appeals a summary judgment dismissal of its action seeking: (1) a declaration, as an additional insured, that defendant Penn America Insurance Company (Penn America) owes plaintiff a defense and indemnification for an underlying claim; and (2) damages against defendant Jimcor Agency, Inc. (Jimcor), the managing general agent for Penn America, for professional negligence. Defendants cross-appeal, arguing that even if the policy was improperly canceled, plaintiff would not have been covered as an additional insured. We affirm the summary judgment dismissal, and therefore need not reach the issues raised on the cross-appeal.
The essential facts are not in dispute. Plaintiff owns property, including a warehouse, where Mystic Express, Inc. (Mystic) was a tenant. Under the lease and licensing agreements between Mystic and plaintiff, Mystic was required to obtain a liability insurance policy, with plaintiff and plaintiff's property manager, Matrix Realty, Inc. (Matrix Realty) as additional insureds. The lease also required plaintiff to obtain insurance and, as landlord, to maintain and repair, among other things, the roof of the warehouse.
Mystic obtained insurance from Penn America using Suburban General Insurance Agency (Suburban), its retail insurance broker, who procured a general liability policy through Jimcor, the wholesale insurance producer acting as Penn America's managing general agent. The initial policy term was from October 2, 2003 to October 2, 2004. On October 2, 2004, Mystic renewed the policy through Suburban. The renewal policy (the policy) had a term of October 2, 2004 through October 2, 2005. The policy contained an "additional insured" endorsement, naming plaintiff and Matrix Realty.
Mystic funded the premium through a premium financing agreement with AICCO, Inc. (Imperial), which paid the annual policy premium in full, and then billed Mystic in installments. The agreement included the following under "Representations & Warranties of Broker or Agent":
The Agent or Broker will hold in trust for LENDER any payments made or credited to the Insured through the Agent or Broker directly, indirectly, actually or constructively, by any of the insurance companies listed in the Schedule of Policies and will pay the monies to LENDER upon demand to satisfy the then outstanding balance hereunder.
There is nothing in any Policy that would require Lender to notify or get the consent of any third party to effect cancellation of such Policy.
The agreement also contained a power of attorney provision, permitting Imperial to act as Mystic's attorney-in-fact to cancel the policy in the event of nonpayment:
2.a. Irrevocably appoints LENDER Attorney-in-Fact with full authority, in the event of default, to (i) cancel the said policies in accordance with the provisions herein, (ii) receive all sums assigned to LENDER and (iii) execute and deliver on behalf of the undersigned all documents, forms and notices relating to the insurance policies listed on the SCHEDULE OF FINANCED POLICIES in furtherance of this Agreement . . . .
Mystic did not sign the premium finance agreement; instead, it was signed by its broker, Suburban, on behalf of Mystic. Ibid.
On October 7, 2004, Imperial sent Mystic a notice of acceptance, which detailed the premiums, down payment, amount financed, finance charge, and the rate of interest. It also showed the monthly payment amount. The notice of acceptance provided that:
Your agent or broker has warranted that either (1) you have signed the premium finance agreement, or (2) you have authorized him/her to sign on your behalf. If your Premium Finance Agreement was signed by your Insurance Agent or Broker, such Agent or Broker warrants that he is authorized to act as agent for you in the signing of the Premium Finance Agreement and has forwarded your down payment check for credit to your account. You may rescind the terms of the Premium Finance Agreement and this Notice of Acceptance by mailing to Lender at the address shown on the reverse side, notice of such rescission within 10 days of the date of mailing of this notice. If no such notice of rescission is so received, the terms of the Premium Finance Agreement and this Notice of Acceptance shall be binding upon all parties.
The security for this financing is the unearned premiums on the policies financed. The finance charge begins to accrue as of the earliest policy effective date. Do not confuse this premium finance loan with the type of credit that revolves from month to month and permits late payments with a penalty.
IF YOU DO NOT PAY YOUR PREMIUM FINANCE INSTALLMENTS ON OR BEFORE THE DUE DATES, YOU MAY RISK LOSING YOUR INSURANCE PROTECTION.
The notice referred to the power of attorney provision in the premium finance agreement:
Your premium finance agreement contains a power of attorney authorizing Lender to cancel the indicated policies under certain conditions, including nonpayment. This finance agreement is secured by the unearned premium on your policies, and Lender must act promptly to recover ...