On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1310-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lihotz and J. N. Harris.
Plaintiff Specialty Motorcars, LLC appeals from an order dismissing its complaint against defendant Erie Insurance Company for lack of in personam jurisdiction. We affirm.
Prior to review of whether the court may exercise jurisdiction, we briefly recite the undisputed facts leading to plaintiff's claims for coverage under the policy issued by defendant. Plaintiff is a Virginia limited liability company, with its principal office in Virginia that is engaged in the purchase and sale of pre-owned automobiles. Defendant is a Pennsylvania insurance company, with its principal place of business in Pennsylvania. Virginia is among the states in which defendant is licensed to do business; New Jersey is not. Upon plaintiff's request, defendant issued a garage/auto insurance policy (the policy) to plaintiff in Virginia.
In July 2008, plaintiff entered into an agreement with Samuel Moncayo and his affiliated companies, collectively referred to as MD Automasters, for the purchase and resale of used automobiles in New Jersey. The arrangement provided that Moncayo would locate, purchase and resell vehicles to New Jersey dealerships on behalf of plaintiff. Consistent with this agreement, plaintiff took title to the vehicles and Moncayo acted as plaintiff's agent to complete the third-party sale transactions.
In February 2009, without notice to plaintiff, Moncayo resold plaintiff's vehicles but personally retained the sale proceeds. In June 2009, when plaintiff first became aware Moncayo had wrongfully liquidated its New Jersey inventory, comprising twenty-seven vehicles, it notified defendant that it had suffered a loss, as required by the policy. Additionally, plaintiff initiated an action against Moncayo in the Law Division, which concluded with the entry of a default judgment.
On March 16, 2010, plaintiff formally sought reimbursement under the policy for $31,199.08 in investigation costs and $159,519.00 in lost inventory caused by Moncayo's defalcations. Defendant paid only $25,000, citing the policy's loss by false pretenses limitation provision. Under the policy, "loss" is defined as "direct and accidental damage or loss" and "false pretense" is defined as "parting with an owned auto by trick, scheme or false pretext[.]" The policy limits loss by false pretense, stating:
We will deduct the Actual Cash Value of property or any money you have received toward payment for the auto from the amount of your loss. We will pay no more than $25,000 for loss caused by any one person in one policy period.
Plaintiff initiated this declaratory judgment action challenging defendant's denial of coverage and seeking declaration that the $25,000 limitation is a per vehicle loss.
Plaintiff sought compensation for the full amount of its loss and related investigation costs. In lieu of an answer, defendant moved to dismiss the action for want of personal jurisdiction, averring it had no contacts with the forum.*fn2
Plaintiff responded, arguing its loss represented a forum-related event triggering jurisdiction. Plaintiff contended the policy's territory of coverage clause represented defendant's acknowledgement it could be sued in any state where a loss was suffered. The clause provided, "The policy applies to accidents or losses that happen during the policy period in the United States of America, its territories and possessions . . . ."
After oral argument, Judge Paul Innes rejected plaintiff's view of the territory of coverage clause and disagreed that plaintiff's loss was a forum-related event. The judge noted the policy's terms provided coverage to plaintiff's Virginia facility and plaintiff's disclosures when requesting coverage admitted its location for displaying or storing its owned property was Virginia. Further, the court rejected plaintiff's jurisdictional assertions, finding defendant had insufficient minimum contacts with New Jersey to justify the State's exercise of personal jurisdiction, and had taken no action to avail itself of the benefits of the forum. Applying the Court's holding in Waste Management, Inc. v. Admiral Insurance Co., 138 N.J. 106 (1994), cert. ...