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Richard Campiglia v. New Jersey Insurance Underwriting Association

July 27, 2011


On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-2957-07.

Per curiam.


Argued March 2, 2011

Before Judges R. B. Coleman and J. N. Harris.

Plaintiff Richard Campiglia appeals from an order granting summary judgment in favor of defendant New Jersey Insurance Underwriting Association (NJIUA) and dismissing plaintiff's complaint for insurance coverage of a loss due to fire. Finding no ambiguity in the terms of the policy issued by NJIUA, which provided coverage only for a two-family dwelling, the court concluded that full coverage was not provided for a second one-family structure on the parcel. We affirm.

In April 1999, plaintiff purchased real property on Orange for $135,000. The property contained two structures, a two-family building in the front and an additional building at the rear, which plaintiff occupied as his primary residence. In connection with the purchase, plaintiff met with insurance broker Jose E. Pantoja, who procured insurance for the property through NJIUA, an underwriting association created by the Legislature to provide essential property insurance to applicants who cannot secure coverage in the voluntary market. The application, dated April 8, 1999, described the property to be insured as an owner occupied, two-family frame building. NJIUA issued a new policy declaration of insurance for $150,000, beginning April 10, 1999 through April 10, 2000, covering a "frame owner occupied 2 family dwelling." Neither the application nor the policy made reference to the second structure on the property.

The description of the property on applications for continuation of coverage and on declarations for ensuing years remained unchanged. Thus, in each renewal application, plaintiff certified that the property continued to be owner occupied as described in the existing policy, and that there were no changes to the policy limits, perils, coverage, mortgagees, names and addresses.

According to the NJIUA's underwriting guidelines, "[i]nspections are conducted to confirm information provided on the application, or to verify insurability of property." A home inspection report is then sent back to the underwriter to be reviewed to determine whether or not the information on the application for insurance is correct. Pursuant to the guidelines, plaintiff's property was first inspected in 1999 for NJIUA by a field inspector, Raymond Bishof. While on site at the property, Bishof found a potential conflict between the NJIUA report he received for the property and what was physically there. Bishof noted on his April 25, 1999 home inspection report that the building was of frame construction, that the dwelling was occupied by two families, but that there was an absentee landlord, with the property not owner occupied.

The property was again inspected in late 2001, and in his second report, dated November 25, 2001, Bishof indicated that the dwelling was occupied by two families. It was reported as owner occupied and tenant occupied. He noted on the report, that "[t]his report covers only the front dwelling not the rear mercantile building." At no point did NJIUA's underwriter, Steve Mutterperl, follow up on any inconsistency between Bishof's two reports and the applications filed by plaintiff.

On December 8, 2006, a fire destroyed the structure at the rear of the property, where plaintiff lived with his family. Plaintiff alleges he was under the impression that for the preceding six years his one-family rear dwelling was included within his policy. He submitted a claim to the NJIUA to recover the full policy limit of $150,000 but that claim was denied. Instead, pursuant to Coverage B of the policy, NJIUA distributed to plaintiff ten percent of the policy's coverage, amounting to $15,000.*fn1

On April 11, 2007, plaintiff filed a complaint against NJIUA and insurance broker Pantoja*fn2 to recover the policy balance of $135,000 for the fire-damaged rear dwelling. NJIUA filed an answer and cross-claims for indemnification and contribution against co-defendant Pantoja. Following a period of discovery, NJIUA moved for summary judgment and that motion was granted. Finding no disputed issue of material fact in interpreting the insurance contract, the motion judge ruled that the property was insured in accordance with plaintiff's application:

While NJIUA's Guidelines may have required an inspector to compare the declaration page with the application, this does not amount to a duty of care owed to plaintiff.

The description of the property contained in the Declaration Page is not ambiguous but plain, ordinary language that any person of average intelligence would understand . . . that a "Frame owner occupied 2 Family Dwelling" did not refer to 3 Family Dwellings or 2 separate structures, but just one ...

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