Lovett v. Alan Lazaroff & Co.

• Decision Date: 28 November 1990
• Parties: Alfred LOVETT, Plaintiff-Appellant, v. ALAN LAZAROFF & COMPANY, Alan Lazaroff, and New Jersey Automobile Full Insurance Underwriting Association, Defendants-Respondents, and Continental Insurance Company of New Jersey, Defendant.
• Court: New Jersey Superior Court — Appellate Division

Page 510

244 N.J.Super. 510

582 A.2d 1274

Alfred LOVETT, Plaintiff-Appellant, v. ALAN LAZAROFF & COMPANY, Alan Lazaroff, and New Jersey

Automobile Full Insurance Underwriting

Association, Defendants-Respondents,

and

Continental Insurance Company of New Jersey, Defendant.

Superior Court of New Jersey,

Appellate Division.

Argued Oct. 29, 1990.

Decided Nov. 28, 1990.

Robert G. Mazeau, for plaintiff-appellant (William E. Rabb, Woodbridge, attorney; Robert G. Mazeau, Hackensack, on the brief).

Michael D. Suarez, for defendants-respondents Alan Lazaroff & Co. and Alan Lazaroff (Suarez & Suarez, attorneys; Michael D. Suarez, Jersey City, of counsel; Alan S. Pollack, Secaucus, on the brief).

Peter R. Feehan, for defendant-respondent New Jersey Automobile Full Ins. Underwriting Ass'n (Feehan & Feehan, attorneys; Peter R. Feehan, Hackensack, on the brief).

Before Judges BILDER, MUIR, Jr. and BROCHIN.

The opinion of the court was delivered by

BILDER, J.A.D.

This is an insurance coverage case. Plaintiff, injured while a passenger in an uninsured vehicle involved in a New York accident, sought to obtain Personal Injury Protection (PIP) benefits as an additional insured under a New Jersey Automobile Full Insurance Underwriting Association (JUA) policy alleged to have been issued to his mother. He brought suit against the JUA, its servicing carrier Continental Insurance Co. and the broker who had handled the insurance application, Alan Lazaroff & Co. Plaintiff appeals from summary judgments granted in the Law Division dismissing all claims. We are required to revisit the problem of the dishonored initial premium check with which we dealt in Tucker v. Allstate Ins. Co., 195 N.J.Super. 230, 478 A.2d 1220 (App.Div.1984).

On September 10, 1986 plaintiff's mother, Viola Lovett, sought to obtain a JUA policy through defendant Lazaroff. The statute creating JUA preconditioned coverage on timely payment of the initial premium.

No person shall * * * be deemed a qualified applicant * * * if timely payment of premium is not tendered. N.J.S.A. 17:30E-3(m).

In accordance with this statutory directive, the application which Mrs. Lovett signed provided:

(6) I agree that no coverage will be in effect if my premium remittance which accompanies this application and is forwarded to the Servicing Carrier, is justifiably dishonored by the financial institution.

Mrs. Lovett delivered a check (drawn on her daughter's account) for $92 as the initial premium and entered into an agreement to finance the balance of the premiums through Motor Club of America Finance Company. In accordance with its usual procedure Lazaroff deposited the received check and forwarded its own check for the premium deposit to Continental with the application. On September 26, 1986 Lazaroff was informed the Lovett check had been returned unpaid because the account had been closed. On September 29, 1986 it wrote Viola Lovett informing her that the check had been returned because the account had been closed and requesting payment, in the form of cash, certified check or money order, within 10 days. She was advised "If this payment is not received within ten days, your automobile insurance policy will be voided and you will have had no coverage since 09/10/86." On October 15, 1986, no payment being forthcoming, Lazaroff notified Continental that the check had "bounced" and requested cancellation. On October 18, 1986 Continental advised Mrs. Lovett that her policy had been cancelled, ab...