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Joseph Pizzio v. Frank E. Metrick

January 14, 2013


On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1188-10.

Per curiam.


Argued January 8, 2013

Before Judges Yannotti and Harris.

Appellant Citizens United Reciprocal Exchange (CURE) appeals from the Law Division's August 5, 2011 order that (1) declared CURE's standard automobile insurance policy issued to defendant Frank E. Metrick "void ab initio from its August 25, 2007 renewal but not for the claims of [plaintiff] Joseph Pizzio" and (2) stated, "innocent third party claims are limited to the mandatory minimum insurance of $15,000/$30,000 required in New Jersey on the date of the accident." We dismiss the appeal as moot.


On July 3, 2008, at around 4:38 a.m., Pizzio was riding as a passenger in a van being operated by Metrick*fn1 when it struck a utility pole causing Pizzio's personal injuries. According to Pizzio, he was helping Metrick deliver early morning newspapers for Trenton's The Times: "He drove and I threw the newspapers." At the time of the accident, Pizzio had been living with Metrick (and Metrick's spouse Lillian) in Trenton for approximately six months.

Metrick's vehicle was insured by CURE with liability limits of $100,000/$300,000 pursuant to a standard automobile insurance policy that was initially issued in 2003, and was last renewed in August 2007. The renewal application signed by Metrick on June 1, 2007, indicated that the only residents of his household were himself and his wife. In response to the question, "Do you or any driver in the household have a physical/mental condition or impairment," Metrick answered, "Yes," and indicated, "Lillian is handicap[ped] due to bone and dis[c] of back deterior[ation]."

CURE's post-accident investigation revealed that although Pizzio had been a member of the Metrick household since approximately January 2008, Metrick never advised the insurer of that changed circumstance. Also, CURE discovered that Metrick had suffered a stroke and subsequent disability -- a partial paralysis of the hand -- in December 2006. Lastly, CURE confirmed that Metrick was using the van on the date of the accident for a business purpose, something that had neither been mentioned during the policy's renewal process nor made the subject of a subsequent formal communication.*fn2

On May 10, 2010, Pizzio commenced a personal injury and declaratory judgment action against (1) Metrick's estate and wife, (2) The Times, and (3) CURE. The complaint sought to compel CURE to provide insurance coverage on behalf of Metrick for his alleged negligence in causing the accident and injuries to Pizzio. CURE responded with a counterclaim arguing that the standard automobile insurance policy issued to Metrick was void due to material misrepresentations, and as a result thereof, CURE owed no duty to defend Metrick or to indemnify him for personal injury claims presented as a result of the accident.

Pizzio moved for summary judgment, arguing that he was an innocent third party entitled to, at least, the minimum liability coverage provided by a standard policy of automobile insurance of $15,000/$30,000. CURE cross-moved for summary judgment contending that Metrick's policy was void due to material misrepresentations, and therefore, even under an innocent third party analysis, the minimum mandatory coverage for a basic automobile insurance policy is "zero liability coverage." Accordingly, CURE's position would relegate the otherwise uninsured Pizzio to becoming a claimant of the Unsatisfied Claim and Judgment Fund administered by the New Jersey Property Liability Insurance Guaranty Association if he could not otherwise secure satisfaction of a potential judgment from Metrick's personal assets.

The motion court found that CURE had demonstrated a sufficient misrepresentation by Metrick in his 2007 renewal application to void the policy. It went on to conclude that notwithstanding this turn of events, Pizzio was an innocent third party who would thereafter enjoy only the minimum mandatory liability limits of a standard automobile policy --$15,000/$30,000 -- pursuant to N.J. Mfrs. Ins. Co. v. Varjabedian, 391 N.J. Super. 253, 256 (App. Div.), certif. denied, 192 N.J. 295 (2007). The court rejected CURE's invitation to depart from Varjabedian.

Based upon the motion court's interlocutory decision, CURE provided indemnification to Metrick and settled the liability action on his behalf with Pizzio. This appeal followed.

According to CURE's appellate brief, CURE does not seek to "upset the settlement." We confirmed this position at oral argument. Instead, CURE's focus on appeal is merely that "the Varjabedian decision must be overturned." In other words, it seeks a reversal without visiting any consequences upon its adversaries. Because this is the essence of a ...

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