On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket Nos. L-1518-09, L-0794-10, L-0445-10, L-0443-10, and L-0446-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 2, 2012
Before Judges Alvarez and St. John.
In this consolidated appeal from the grant of summary judgment dismissing their complaints, we address the claims of the following plaintiffs: Helen Chaitman and Elizabeth Krinick; Marsha Peshkin and Howard Israel; Jesse Cohen; Norman Feinberg and Phyllis Krock; and Stanley M. Katz and Marilyn Katz.*fn1
All filed suit against their homeowners' insurance companies, defendants: Chubb Insurance Company of New Jersey; Federal Insurance Company; Great Northern Insurance Company; Pacific Indemnity Company; and Great Northern Insurance Company and Federal Insurance Company.
Plaintiffs assert that they are entitled to be made whole by defendants for losses arising from Bernard Madoff's investment fraud*fn2 under the contents provisions of their homeowners' policies. Because it is pertinent to our decision, we note that when Madoff entered his guilty plea, he acknowledged that upon receipt of client funds transmitted by check or wire transfer, the money would be deposited into a Bernard L. Madoff Investment Securities, LLC (BLMIS) account at the J.P. Morgan Chase Manhattan Bank (Chase Bank). The money would then be retained for a few hours before being deposited into other accounts in furtherance of the Ponzi scheme. Madoff admitted that investor funds were never used to create individual trading accounts, much less to purchase securities, or to do other than fund the lifestyle he, his family, and close associates enjoyed. When necessary, he would use new investor money, or money he maintained in an account in his name, to advance fictitious returns to other investors of longer standing, until the eventual day of collapse of his criminal enterprise.
All the homeowners' policies contain the following language:
For a covered loss to each category of contents listed below, we will not pay more than the amount shown. For any one occurrence, payment will be under the category providing you with the most coverage. These special limits do not increase the amount of coverage on your contents or on any item covered elsewhere in this policy.
Legal tender, bank notes, stored value cards, bullion, gold, silver, platinum, or tokens. . . . . . . . . . . . . . . $1,500*fn3
Securities, accounts (other than accounts covered under Extra Coverages, Account funds), deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, passports or tickets. . $5,000 However, when this property is located in a bank vault or bank safe deposit box, your full contents coverage away from your residences will apply for a covered loss.
On June 24, 2011, Judge Thomas C. Miller granted summary judgment to defendants, finding that plaintiffs' claims were for the loss of money paid to Madoff, as the funds were never converted to securities or accounts. The judge disagreed with plaintiffs' characterization of the investments as having been accounts located in a bank vault or bank safe deposit box, which would thereby trigger full coverage to the maximum available for contents loss on the policies. In his view, the contention had no basis in law, fact, or the plain meaning of the words. Given that conclusion, he dismissed the complaints, each plaintiff having already been compensated, per the policy limit, to the extent of $1000 or $1500 for the year in which they sent payments to BMIS.
Significantly, the trial court found the words "money," "legal tender," and "accounts" in the special limit provisions "have common meanings and are easily understood; the terms are not ambiguous . . . ." Since the words meant what they said, plaintiffs' proffered interpretation of the policy language, whether reasonable or unreasonable, was irrelevant because no ambiguity existed which required interpretation. We agree with this analysis and consider plaintiffs' arguments to not warrant much discussion in a written opinion. R. 2:11-3(e)(1)(E).
As our Supreme Court has stated, where insurance terms are unambiguous, it is unnecessary to "engage in a strained construction" of them. Progressive Cas. Ins. Co. v. Hurley, 166 N.J. 260, 273 (2001). Therefore, since plaintiffs' contention that the loss constituted a theft of something other than money - of accounts or of the contents of a bank vault or a bank safety deposit box - is not ...