On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5850-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: June 12, 2012 -
Before Judges Axelrad and Parrillo.
These back-to-back appeals involve the obtaining and interpretation of a builder's risk insurance policy. Plaintiffs Gloria and Glenda Salley, mother and daughter, had constructed the foundation and frame of a home on their property, and then sought to obtain a builder's risk insurance policy. They met with Nasir Beshay, president of ABL Insurance Services, Inc. (ABL), and he obtained a policy through Assurance Company of America (Assurance). After a fire caused damage to the property, plaintiffs were denied coverage by Assurance because the policy did not cover existing structures. Plaintiffs appeal the grant of summary judgment in favor of Assurance, arguing the terms of the policy were ambiguous and they were not given a copy of the policy before the fire. Beshay and ABL appeal the jury verdict and judgment against them based on a theory of negligence and breach of acceptable professional standards, arguing there was no basis to pierce the corporate veil and the court erroneously limited cross-examination. We affirm in both cases.
Plaintiffs filed an amended complaint against defendants Beshay, ABL, and Assurance on February 13, 2009. Plaintiffs claimed a fire caused extensive damage to their property in Jersey City, and Assurance declined payment on a builder's risk insurance policy that covered the property. Plaintiffs further alleged that if their loss were not properly covered by the policy, it was the result of professional errors by Beshay and ABL in processing and obtaining the policy. Defendants filed responsive pleadings.
Assurance moved for summary judgment. By oral decision and order of April 30, 2010, Judge Peter F. Bariso, Jr. granted summary judgment in favor of Assurance, dismissing plaintiffs' complaint with prejudice. The case against Beshay and ABL was tried by a jury in October 2010, with Judge Barry P. Sarkisian presiding. The jury rendered a verdict in favor of plaintiffs. Pursuant to a stipulation of damages, the court entered a judgment on October 27, 2010 for plaintiffs in the amount of $135,000. These appeals ensued and were calendared back-to-back.
The following facts are adduced from the summary judgment record and the trial testimony of plaintiffs and Beshay. Plaintiffs are the owners of property in Jersey City, where they began construction of a two-family home in 2005. The foundation and framing of the home were completed at that time, and sewer pipes were installed.
On or about January 29, 2007, plaintiffs met with Beshay, the president of ABL. Gloria*fn1 testified she scheduled the meeting because they needed a builder's risk insurance policy to obtain a $234,000 mortgage from their bank. Gloria testified that in her presence her daughter informed Beshay that the framing, foundation, and part of the roof were constructed on the property. Gloria certified she informed Beshay that although the construction project was unfinished, she intended to complete the project. In contrast, Beshay testified that plaintiffs told him the project had not yet been started and construction would not begin until after they obtained insurance.
Beshay contacted Streetsmart Risk Managers, an independent third-party insurance agent, to place the insurance application over the phone. The completed application, which plaintiffs did not see, was submitted to Assurance. The application indicated that plaintiffs sought a $235,000 "One-Shot New Construction" policy for one year, the project had not started, and plaintiffs were not seeking existing structure coverage. Assurance issued plaintiffs a builder's risk insurance policy. Plaintiffs received the declaration page from Beshay, and it was accepted by the bank.
There was no further construction. In August 2007, a fire caused extensive damage to the property. Plaintiffs submitted a claim to Assurance for the damage. Assurance denied coverage under the policy based on damage to a pre-existing structure.
Plaintiffs' complaint against Assurance was dismissed on summary judgment. Judge Bariso found the coverage provisions within the Assurance policy were unambiguous and did not provide coverage for "buildings or structures where construction was started or completed prior to the inception date of the policy." As a result of the undisputed fact that the damaged structure existed prior to the inception date of the Assurance policy, he found plaintiffs were not entitled to coverage for the damage to the existing foundation and frame under the express language of the policy.
At trial, defendants sought to question plaintiffs about a homeowner's policy that might have been in effect at the time of the fire to demonstrate that a reason why plaintiffs did not tell Beshay about the pre-existing structure was because they thought it was covered by homeowner's insurance. The judge permitted defendants to inquire whether plaintiffs had a homeowner's insurance policy on the property and whether they disclosed that to Beshay, "as it goes to the relevance of the credibility of the witness and full disclosure." However, the judge refused to allow further questioning relating to the policy because "the level of confusion that will create in the jury's mind under [N.J.R.E.] 403 is such that I'm not prepared to let you develop that point." Thus, the judge allowed questioning "for the limited purpose of going into the completeness of a discussion that took place between the plaintiff[s] ...