The opinion of the court was delivered by: Hillman, District Judge
Before the Court are a motion for partial summary judgment and cross-motion for summary judgment filed by plaintiff and counter-defendant Certain Underwriters at Lloyd's of London ("Lloyd's), a motion for partial summary judgment against Lloyd's filed by defendant, crossclaimant, and counterclaimant GMAC Mortgage and Ally Bank Corporation (collectively "GMAC"), and a motion for partial summary judgment against Salvatore Alesi ("Alesi") filed by GMAC. For reasons explained below, Lloyd's motion for partial summary judgment against Alesi will be granted in its favor as to the personal contents claim, the lost rental income claim, and Alesi's bad faith claim. Lloyd's motion will be granted in part and denied in part as to its claim of violation of the New Jersey Insurance Fraud Prevention Act. Lloyd's motion regarding its requests for admissions directed to Alesi will be denied. GMAC's motion for partial summary judgment against Lloyd's will be denied, and Lloyd's cross-motion for summary judgment will be granted with regard to GMAC's claim to the insurance proceeds for the property claim. GMAC's motion against Alesi on grounds that Alesi agreed to "net zero" on the sale of the premises including the insurance proceeds will be denied due to the ambiguity of the agreement.
This declaratory judgment matter involves a dispute over an insurance claim for damage sustained to real property located at 7608 Bayshore Drive, Margate, New Jersey ("premises"). In or about May 2002, Salvatore Alesi purchased the premises in cash for more than $300,000, and then borrowed money to make improvements. In 2005, Alesi married Sherri Krasner ("Krasner") and the two lived in the premises together. In July 2007, the couple began divorce proceedings. Although the couple reconciled, Krasner later sought and was awarded a temporary restraining order against Alesi. In or about October 2007, Alesi executed a mortgage in favor of defendant GMAC.
During that same month, on October 25, 2007, Alesi filed a police report concerning certain items that he represented were stolen from the premises, including Rolex watches (Submariner and DateJust), his wedding band, a television, a DVD player, a Gibson guitar, an Erte painting, a bronze dolphin, a Japanese "Block" painting, an ivory statue and an "oriental dancer."*fn1 On December 10, 2007, Alesi was convicted of simple assault against Krasner in Margate Municipal Court.
In or about February 2008, Alesi obtained homeowner's insurance from Certain Underwriters at Lloyd's of London ("Lloyd's"). Alesi and Krasner again attempted reconciliation and Alesi moved back into the premises in or around May 2008. Alesi moved out again in June 2008, and on July 19, 2008, Krasner obtained another temporary restraining order against Alesi. While Krasner was at the police station presumably obtaining the retraining order, Alesi was permitted to return to the premises to remove certain items. Alesi and his father removed additional items in August 2008, after which Alesi vacated the premises.
By this time, Alesi had defaulted on his mortgage with GMAC and was approximately one year in arrears on his payments.*fn2 The parties believe Krasner left the premises permanently on November 30, 2008.*fn3 Alesi testified that he had the water and electricity turned off sometime before November 30, 2008.*fn4
Sometime during November 30-December 1, 2008, the Margate City Police were dispatched to the premises after a neighbor reported that water was running out of the front door. The police found the interior of the premises extensively damaged. Certain fixtures such as sinks, countertops, and toilets were destroyed, the walls and ceiling were damaged, and the ceiling seemed in danger of collapse as a result of the water damage. On December 1, 2008, Alesi was notified of the damage by the police. Alesi and his father inspected the premises and found that all the faucets in the house had been turned and left on.
Alesi and GMAC submitted insurance claims to Lloyd's. David M. O'Brien ("O'Brien") was retained by Lloyd's as the adjuster. Within two or three days, O'Brien contacted Alesi and on December 10, 2008, O'Brien met with Alesi to review the damage. Alesi provided O'Brien with a preliminary, handwritten contents list of personal items that Alesi represented were either removed or damaged as a result of the loss. O'Brien estimated that the costs necessary to repair the building would be $69,023, and that Alesi could claim $11,000 more if other repairs were completed. Alesi submitted a building estimate from Brindisi Builders for repairs, first in the amount of $210,000, and then later in the amount of $154,176. Alesi also claimed a loss of personal contents in an amount more than $100,000, and lost rental income of $9,000.
On December 28, 2008, O'Brien sent Alesi an email reminding him to get in touch with him and to submit a final claim for contents. Alesi responded on January 14, 2009 that he had about 75% of the receipts and on February 8, 2009 stated to O'Brien that he needed to get in touch with Krasner before he could complete his contents list. On March 8, 2009, O'Brien sent Alesi an email asking him to present his contents claim "ASAP." The parties dispute whether a contents list was provided at that time or not until September 2009, although both Lloyd's and Alesi acknowledge that Alesi needed to speak with Krasner about what items had been in the house, and that Alesi's efforts were hampered by the retraining order against him.
During her deposition, Krasner testified that a washer and dryer contained on Alesi's contents list were given to her by her father and removed to a tanning salon where she worked after Alesi turned off the water supply to the premises. She testified Alesi knew of the removal of the washer and dryer. Krasner also testified that she saw Alesi wearing a Rolex watch in February 2010 that he had included on his contents list. Krasner further testified that Alesi sold some of the artwork to his sister because he was experiencing financial difficulty. Krasner also testified that Alesi had taken other items later claimed to have been lost or destroyed. Although her testimony is not a model of clarity, it appears that Alesi brought some of the items he removed back to the premises only to have removed them all at a later date and perhaps stored them at his sister's house.
Alesi admits Krasner provided this testimony, but argues that her testimony should be barred because Krasner asserted her Fifth Amendment privilege and refused to testify to matters regarding: whether she removed property from the premises when she left in November 2008; her knowledge or information about the damage to the premises; who knew that she was leaving and who helped her move; and the condition of the premises when she left and whether the water had been turned on.
Alesi also submitted a lost rent claim of $9,000 based on a lease with his cousin's son, Chris Brindisi, for rental of the premises in the summer of 2008. The premises could not be leased, however, because Krasner was residing at the property at that time and had a restraining order in effect against Alesi. Alesi maintains that the property could have been rented after Krasner left if the property had not been destroyed.
After filing a complaint in mortgage foreclosure in January 2008, GMAC agreed to permit Alesi to sell the premises "as is" in a short sale in exchange for full and final payment of the mortgage. In or about March 2010, the premises was sold to a third party for $325,000, an amount substantially less than the amount owed on the mortgage.
On April 8, 2010, Lloyd's filed this action seeking declaratory relief that it did not owe insurance coverage to defendants for damages sustained to the premises because such damage was caused by Alesi or his estranged wife, or both, and because Alesi misrepresented facts to its investigator. Alesi filed an answer and counterclaim against Lloyd's alleging breach of contract and bad faith for failing to pay the insurance claim. Lloyd's filed an amended complaint on June 3, 2010, adding a claim against Alesi under the New Jersey Insurance Fraud Prevention Act ("IFPA"), N.J.S.A. § 17:33A-1 to 30. GMAC filed a counterclaim against Lloyd's seeking insurance coverage for damage to the premises, and a cross-claim against Alesi arguing that any insurance payments paid to Alesi belong to GMAC.
Plaintiff alleges that this Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000, exclusive of interest and costs. The plaintiff, Certain Underwriters at Lloyd's of London, is incorporated under the laws of the United Kingdom, and has a principal place of business in London, England. Defendant, GMAC Mortgage, is incorporated in the Commonwealth of Pennsylvania with its principal place of business in Pennsylvania. Defendant, Ally Bank Corporation, is incorporated in the State of Utah with its principal place of business in Michigan. Defendant, Salvatore Alesi, is an individual and citizen of the Commonwealth of Pennsylvania.
B. Summary Judgment Standard
Summary judgment is appropriate where the Court is satisfied that "'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)(quoting Fed. R. Civ. P. 56©)).
An issue is "genuine" if it is supported by evidence "such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A fact is "material" if, under the governing substantive law, a dispute about the fact might affect the outcome of the suit. Id. "In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party's evidence 'is to be believed and all justifiable inferences are to be drawn in his favor.'" Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255, 106 S. Ct. 2505).
Initially, the moving party has the burden of demonstrating the absence of a genuine issue of material fact. Celotex, 477 at 323, 106 S. Ct. 2548. Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id. at 324, 106 S. Ct. 2548. Thus, to withstand a properly supported motion for summary judgment, the nonmoving party must identify specific facts and affirmative evidence that contradict those offered by the moving party. Anderson, 477 U.S. at 256-57, 106 S. Ct. 2505. A party opposing summary judgment must do more than just rest upon mere allegations, general denials, or vague statements. Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).
C. Lloyd's Motion for Partial Summary Judgment
(1) Personal Property Loss
In its motion for partial summary judgment, Lloyd's seeks a declaratory judgment that it has no duty to provide insurance coverage for Alesi's alleged personal property losses. Lloyd's argues that an insurance policy may be voided by an insurer for a willful misrepresentation of a material fact and that Alesi made numerous material and willful misrepresentations to Lloyd's investigator.
Alesi has claimed in excess of $100,000 in personal property damage for items he claimed were either destroyed or removed from the premises during the loss. Lloyd's maintains that the list of contents that was provided by Alesi almost eleven months after the loss, despite repeated attempts by their investigator David O'Brien to secure a contents list, contains items that were not in the premises at the time when the property was vandalized during November 30-December 1, 2008. The items Lloyd's disputes on the list are:(1) three Samurai swords*fn5 ; (2) a Rolex watch; (3) a washer and dryer; (4) three McKnight paintings/limited prints;*fn6 (5) guitars; (6) an "Erte";*fn7 (7) a "dancing lady";*fn8 (8) an Ansel ...