On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-1341-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Wefing, Payne and Koblitz.
Plaintiffs, Grande Leather and Fur, L.L.C., New Wave Leather Products L.L.C., Grande Industries, L.L.C., Vincent Grande and Kim Grande appeal orders of summary judgment entered against them and in favor of defendants Edward P. Bond, CPA, Certain Underwriters at Lloyd's of London and Pacific Insurance Company, Limited. On appeal, plaintiffs present the following arguments:
I. THE TRIAL COURT ERRED IN DISMISSING PLAINTIFFS' CASE AGAINST DEFENDANT EDWARD BOND WHERE THE COURT HELD THAT THE PLAINTIFFS' ENTIRE CASE AGAINST DEFENDANT, EDWARD BOND, MUST FAIL IF THE PLAINTIFFS CANNOT RELY UPON THE TESTIMONY OF AN EXPERT AT THE TIME OF TRIAL.
II. THE TRIAL COURT ERRED IN DECIDING THAT THE STATUS OF THE FISCAL AGENT WAS THAT OF A PERSON JUST STANDING IN THE PLACE OF THE PLAINTIFFS RATHER THAN HOLDING THAT THE FISCAL AGENT WAS A SEPARATE ENTITY THAT HAD NO PRIOR CLAIM HISTORY WHERE THE FISCAL AGENT ACTED FOR HIS PRINCIPAL AND NOT ON BEHALF OF THE PLAINTIFFS AND HAD COMPLETE AUTONOMY AND CONTROL OF THE BUSINESS AND UNDER THE CIRCUMSTANCES OF THIS CASE THE INFORMATION AS PROVIDED BY THE FISCAL AGENT SHOULD NOT HAVE BEEN USED AS A BASIS TO DENY COVERAGE.
III. THE TRIAL COURT ERRED IN HOLDING THAT THE NEW JERSEY CONSUMER FRAUD ACT IS NOT APPLICABLE AND SHOULD HAVE PERMITTED THE PLAINTIFFS TO AVAIL THEMSELVES OF THE ACT'S PROTECTION AND REMEDIES.
IV. PLAINTIFFS' CLAIMS REGARDING THE INSURERS' BAD FAITH SHOULD NOT HAVE BEEN DISMISSED BY WAY OF SUMMARY JUDGMENT WHERE THE PLAINTIFFS PROVIDED A SUFFICIENT BASIS FOR SAME.
V. THE TRIAL COURT ERRED IN HOLDING THAT THE EXECUTION OF A RELEASE IN FAVOR OF THE INSURANCE COMPANIES COULD BE USED TO EXTINGUISH COVERAGE OF INSURANCE AB INITIO WHERE THE UNDERWRITERS DEMANDED THE RECEIPT OF THE RELEASE IN ORDER TO RETURN THE PREMIUM PAID AFTER THE UNDERWRITERS IMPROPERLY VOIDED COVERAGE.
VI. THE TRIAL COURT ERRED IN DENYING PLAINTIFFS' REQUEST FOR LEAVE TO AMEND THE COMPLAINT.
VII. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT WHERE THERE ARE MATERIAL ISSUES OF FACT THAT ARE GENUINELY DISPUTED INCLUDING THE STATUS OF THE FISCAL AGENT, THE ISSUE OF FACTUAL MISSTATEMENTS BY DEFENDANTS AND BREACH OF DEFENDANT, EDWARD BOND'S, PROMISES TO PLAINTIFFS.
Plaintiffs Vincent and Kim Grande have been, since 1997, the owners of the corporate plaintiffs, businesses initially selling leather and fur clothing at a store located on Route 22 in Union, New Jersey. In 1999, the Grandes opened an additional store in Linden, New Jersey. The Route 22 store was closed in June 2003.
During the operation of the businesses, a number of losses occurred as the result of theft. In 1999, the plaintiffs submitted to insurer CNA Insurance Company a claim for a loss of between $16,000 and $18,000 arising from a theft at the Union location. In 2000, a theft occurred at the Linden location, resulting in a claim for losses in the amount of $50,000 that was submitted to CNA. In 2002, a further loss of $110,000 occurred at the Linden location, for which a claim was submitted to plaintiffs' new insurer, Kemper Insurance Company. In 2003, plaintiffs obtained coverage from Peerless Insurance Company. However, that company declined to renew the coverage when the policy expired in January 2004. Thereafter, plaintiffs were unable to obtain theft insurance, and remained uninsured for a period of approximately one and one-half years.
During that period of time, plaintiffs suffered business reverses. In 2005, following a default in loan payments, creditor bank PNC filed a verified complaint and order to show cause in the Chancery Division seeking the appointment of a receiver to bring to a close the day-to-day operations of the three companies and liquidate the inventory and other assets. On June 9, 2005, a consent order was entered, instead appointing Edward P. Bond, CPA, a principal in the accounting firm of Bederson & Company, L.L.P., as a fiscal agent over the assets of the companies. The order directed that he take enumerated actions, including obtaining possession of all inventory, opening new bank accounts, collecting amounts owed to the companies, paying normal operating expenses, and monitoring the sales of existing inventory. The order also contained provisions concerning actions that Bond was not authorized to take without notice and further court order and a provision requiring that Bond report to the court on the status of the businesses within fourteen days.
In accordance with the court's order, Bond submitted a June 16, 2005 certification that recommended that a receivership be established. In cataloguing the status of the ...