On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-1456-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 19, 2012
Before Judges Graves and Guadagno.
Plaintiff GEICO (Government Employees Insurance Company) appeals from an order that granted summary judgment to defendants and denied its motion for summary judgment. The order compelled GEICO to pay defendant Martino's medical expenses and counsel fees. We reverse.
Ernesto Martino and Jacqueline Nelson have lived together in a domestic relationship for over sixteen years. They have one child, Anthony, and although they never married, they have been together since 1993 when Anthony was born. They purchased a three-bedroom home together in 1997. Both parties' names were on the mortgage and they shared household expenses with Martino paying the mortgage, cell phone and occasionally the electric bills, while Nelson paid the other expenses.
On December 14, 2006, Martino was involved in an automobile accident while driving a 1998 Lexus owned and registered to Nelson. He sustained injuries to his back and neck and incurred medical expenses exceeding $11,000.
Nelson was the sole named insured on a policy issued by GEICO. In August 2005, Nelson completed a GEICO questionnaire to renew coverage for two cars she owned at the time, a 1993 Pontiac and the Lexus. The section titled "Driver Information" required a listing of all drivers of the vehicles. Nelson identified only herself. To the question, "Are there any residents (15 or older) who will not be listed as drivers," Nelson checked "No." On another section of the form, the Lexus and Pontiac were listed and the insured was asked to "indicate which driver operates which vehicle the most." Nelson listed herself as the driver of both cars. Nelson also checked "None" to the following question:
If not previously reported to us, please provide the following information. Include any license suspension or revocation, convictions for traffic citations (other than parking) and accidents which have occurred within the past 9 years by any operator of your auto. By signing this questionnaire, you authorize us to confirm the driving records of all drivers and household members through the Department of Motor Vehicles.
Similar policy renewal questionnaires were submitted by Nelson on October 12, 2005, July 29, 2006, and October 12, 2006. Martino was not identified as a driver of any of Nelson's vehicles or a resident of the household in any of the completed questionnaires.
On December 10, 2008, Martino served a demand for no-fault arbitration on GEICO and Liberty Mutual Insurance Company*fn1 with the National Arbitration Forum.
On September 2, 2009, GEICO filed a complaint against Martino and Nelson, seeking to rescind and declare Nelson's auto policy void ab initio based on fraud and misrepresentation. GEICO also sought to preclude Martino from receiving personal injury protection (PIP) benefits under Nelson's policy.
In 2010 Martino filed an answer and counterclaim, seeking to compel payment of his medical expenses from GEICO. On January 31, 2011, Martino filed a motion seeking summary judgment. After hearing oral argument, the motion judge held a plenary hearing during which Martino and Robin Lubow, a GEICO underwriter, testified.
Martino testified that he and Nelson became engaged before their son was born in 1993. They purchased the home on Aldeberan Drive in 1997. He worked for a car dealership and painted cars for another auto body shop. He had access to cars through those jobs and frequently used "dealer plates" when driving those cars. When he didn't have access to a car through his employment, Martino "borrowed" one of Nelson's cars but always asked her permission. On the day of the accident, he was driving Anthony to a doctor appointment. Martino had access to a car from his job but Anthony wanted to go in the Lexus.
Martino was aware that Nelson had auto insurance for her two vehicles and he "looked at the insurance card once or twice." He knew that Nelson paid the premiums on the policy and was required to have insurance because she had a car loan, and "the bank would have notified somebody or something . . . so she had to have insurance." Martino had no insurance at the time of the accident but did have a motorcycle policy in 1992-93. When asked why he obtained an insurance policy after he purchased the motorcycle, Martino replied, "It's a no-brainer, man."
Robin Lubow, a Senior Underwriter for GEICO, testified that after the accident, GEICO added Martino to Nelson's policy as a driver, based on their determination that Martino and Nelson lived in the same household and Martino drove her cars. In setting the premium, GEICO's underwriters examined Martino's driving record for the past ten years and learned that he had a violation of "improper display/fictitious plates" in November 2005 and an "unsafe operation of a motor vehicle" violation in January 2004. Prior to the addition of Martino to her policy, Nelson's bi-annual premium was $838.70. With Martino, the premium initially increased to $1,117.90, an annual increase of $558.40. When Nelson's policy came up for renewal, GEICO reassessed the risk and, because of Martino's driving record, the policy was transferred from GEICO Indemnity to GEICO Casualty, GEICO's non-standard risk company. This resulted in an increase of the bi-annual premium to $2,369.20. Nelson defaulted on the payments and GEICO cancelled the policy.
In a written decision, the motion judge granted Martino's motion for summary judgment and compelled GEICO to pay his medical expenses and counsel fees.
On appeal, GEICO argues the motion judge erred in granting judgment because the judge misconstrued the concept of material misrepresentation and misapplied ...