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Tuscany Bistro, Inc v. Sirius America Insurance Company

August 12, 2011

TUSCANY BISTRO, INC., PLAINTIFF-APPELLANT,
v.
SIRIUS AMERICA INSURANCE COMPANY, DEFENDANT-RESPONDENT, AND SASCO INSURANCE SERVICES, INC. AND WAYNE BRENGAL, DEFENDANTS.



On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-994-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted October 6, 2010

Before Judges Fuentes and Gilroy.

Plaintiff Tuscany Bistro, Inc. is a New Jersey corporation that owned and operated a restaurant business located in the Village of Pluckemin, Bedminster Township. Defendant Sirius America Insurance Co. sold plaintiff a commercial policy insuring against loss from a fire. After the restaurant was heavily damaged from a fire, defendant denied coverage under the policy, claiming plaintiff had violated a material condition of the policy requiring it to maintain a fire suppression system.

Plaintiff filed a declaratory judgment action against defendant seeking a judicial determination of coverage.

Defendant moved for summary judgment arguing plaintiff had violated a material condition of the policy. The motion judge agreed with defendant's position and dismissed plaintiff's complaint with prejudice. Plaintiff now appeals. We affirm.

IOn July 14, 2003, plaintiff applied for a business owner's insurance policy through Sasco Insurance, Inc., an agent of defendant. The policy was underwritten by G&G Underwriters, LLC (G&G). The loss control form attached to plaintiff's application indicated the insured informed the agent the restaurant was equipped with a central station fire alarm system and a central burglar alarm system. Defendant issued the policy and gave plaintiff a $375 credit against the premium because of the dual-alarm systems.

G&G arranged to have the restaurant inspected by H&S Technical Services. The risk assessment report prepared by H&S Technical does not mention having found or inspected a centrally monitored fire alarm system. We note, however, that the report consists mainly of a check-off list of items grouped together under particular categories. The information relating to fire protection measures was under section 5, denoted "PROTECTION." Check marks placed next to preprinted categories indicate the existence of sprinklers, "hardwired" smoke alarms, and three fire extinguishers. The box for "Manual Fire Alarm" is checked "No." By contrast, the section in the report denoted "BURGLARY" has the word "Yes" checked in the boxes asking whether there was a burglary alarm system connected to a central station.

Plaintiff's policy contained a protective safeguards - automatic fire alarm endorsement under which, as a condition of coverage, plaintiff was required to install and maintain an automatic fire alarm protecting the "entire building," connected to a central station or reporting to a public or private fire alarm station. Plaintiff was also required to inform defendant of any defect or suspension of service.

The actual language used in the policy read as follows:

COVERAGE MODIFICATION

A. As a condition of this insurance, you are required to maintain the protective safeguard described below.

Insurance under Part 1 for loss caused by, or resulting from, fire is suspended and we do not insure such loss if you fail to immediately notify us when you:

* Know of any suspension of service or impairment in the working order of the ...


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