Rosenberg v. Universal Underwriters Ins. Co.

• Decision Date: 29 April 1988
• Citation: Rosenberg v. Universal Underwriters Ins. Co., 541 A.2d 246, 224 N.J.Super. 638 (N.J. Super. App. Div. 1988)
• Parties: Richard ROSENBERG, Administrator of the Estate of Scott Rosenberg, Plaintiff- Respondent, v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY, Defendant-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 638

224 N.J.Super. 638

541 A.2d 246

Richard ROSENBERG, Administrator of the Estate of Scott Rosenberg, Plaintiff- Respondent, v. UNIVERSAL UNDERWRITERS INSURANCE COMPANY, Defendant-Appellant.

Superior Court of New Jersey Appellate Division.

Argued Oct. 13, 1987.

Remanded Oct. 22, 1987.

Resubmitted March 18, 1988.

Decided April 29, 1988.

Gary S. McDonald, Trenton, for defendant-appellant (Needell & Needell, attorneys; Russell L. Needell, on the brief).

Harris Y. Cotton, Woodbury, for plaintiff-respondent (Harris Y. Cotton, on the brief).

Before Judges HAVEY and STERN.

PER CURIAM.

Defendant appeals from a judgment entered in plaintiff's favor after a bench trial. The trial judge determined that "where a general garage policy for liability covering a closely-held corporation includes Option 5 under N.J.S.A. 39:6A-10, coverage is afforded to the corporation owner, his spouse and resident members of the household," Rosenberg v. Universal Underwriters, 217 N.J.Super. 249, 254, 525 A.2d 349 (Law Div.1986), and that plaintiff's son, Scott, was a "resident" of his household at the time of Scott's death. In addition to urging affirmance on the basis of the Law Division opinion, plaintiff argued before us that he sought reformation of the policy to conform with plaintiff's intent to secure coverage protecting members of his family and that the trial judge, in essence, reformed the policy by concluding that:

In November 1981, based on Rosenberg's intent to provide insurance protection for his family, R & S advised Universal that Marilyn and Kenneth were to be added as drivers and that P.I.P. 'Option 5', under N.J.S.A. 39:6A-10 should be added to the policy. Universal acknowledged this coverage effective November 3, 1981 and renewed the policy as amended in May 1982. [217 N.J.Super. at 249, 251, 525 A.2d 349].

While the second count of plaintiff's amended complaint sought to "reform the policy ... to cover himself and all resident members of his household," we did not necessarily read the trial court's reference to "Rosenberg's intent to provide insurance protection for his family" as holding that there was coverage for all members of the family based upon "reformation" of the policy. In fact, the court's legal analysis resulting in coverage suggested to us that the court did not find reformation. We nevertheless thought it advisable for the trial judge to clarify or decide the issue of reformation because we felt that it might be determinative of the question of scope of coverage in this case. Accordingly, we remanded "for further proceedings at which time the trial court shall make further findings of fact and conclusions of law regarding the question of reformation based on the testimony it has already heard in this non-jury trial and on such additional evidence as the court deems appropriate."

On remand the trial judge made clear that he had not initially decided the reformation issue because "[a]fter finding that plaintiff had an adequate remedy at law, [the] Court did not think it necessary to consider plaintiff's equitable theories [citation omitted]." The judge nevertheless conducted a hearing on the issue of reformation and concluded that the policy should be reformed. In his letter opinion issued after the hearing on remand, the trial judge considered the evidence presented at the original trial and the additional testimony of Valentina Resto, a commercial underwriter for plaintiff's agent Rosenberg and Sinderbrand (R & S), Inc. ¹ Ms. Resto indicated that when an Allstate policy issued to Varsity Auto, a corporation owned solely by plaintiff, had terminated or lapsed, the P.I.P. coverage for plaintiff Rosenberg and his family members was "added" to the policy issued by defendant.

In his letter opinion, the judge concluded:

Richard Rosenberg, the president and sole shareholder of Varsity Autos, Inc., testified that he requested insurance covering both his business and entire family. He was aware that both his wife and children would be driving the corporate vehicles and wanted them fully covered. This request was imparted to R. & S., his longtime insurance broker. At all times relevant to this case, R. & S. was acting as the agent for Rosenberg, not Universal. Rider v. Lynch, 42 N.J. 465 [201 A.2d 561] (1964). Plaintiff does not contend to the contrary.

In light of Rosenberg's request and the termination of Rosenberg's personal liability policy, Resto, the underwriter responsible for Rosenberg's account with R. & S., under her direction, had a letter sent to Universal which, in relevant part, indicated that Marilyn Rosenberg was to be covered under the policy and that 'if PIP Opt. V is available under the policy we would like it added'.

Universal's reply, affixed to the bottom of Resto's letter, indicated that additional PIP had been added and was effective 11/3/81. Additional information was sought on Marilyn Rosenberg including whether she drove corporate vehicles and if she worked for the insured. The letter closed by indicating that when the aforementioned was received the units would be adjusted if applicable to Marilyn Rosenberg.

In response to the request, R. & S. sent a letter on 11/18/81 specifying that Marilyn Rosenberg did drive vehicles owned by the Corporation and that she was the wife of Richard Rosenberg. Universal had further notice of Marilyn's use and status through Universal's own audit report which indicated that Marilyn was using corporate vehicles while not being affiliated with the Corporation in any capacity other than as the wife of the...