Court Opinion

ID: 9859627
Source: CourtListenerOpinion
Date Created: 2023-09-24 22:13:00.692621+00
Date Added: 2024-06-11T10:59:01.243792
License: Public Domain

Hall, J.
(dissenting). The majority turns its disposition of this case on a holding that the provision of our standard fire insurance policy statute, N. J. S. A. 17:36 — 5.15 to 5.28, inclusive, prescribing the maximum duration of contracts of temporary insurance in the form of oral or written binders, N. J. S. A. 17:36-5.16, is not binding on the insured. It appears to me that it is not open to the judiciary thus to nul*79lify a patently plain legislative enactment, completely within the province of that branch of government to enact for whatever reason of public policy and interest it may have found compelling.
The scheme of the standard policy statute is that of a legislatively specified fire insurance contract, the prescribed or allowed terms and conditions of which are fully spelled out in the enactment, which may not be validly waived and are binding on both parties whether or not they personally know of them. The contract is not one prepared by the insurer, but rather imposed by positive law. This is the rationale of this court’s decision in Herbert L. Farkas Co. v. New York Fire Insurance Co., 5 N. J. 604 (1950), where it was said in speaking of a policy:
“Eire insurance policies must be in the form prescribed by statute, and any facts or conditions imposed in a policy inconsistent with or constituting a waiver of the standard form provisions are a nullity. * * * In these circumstances a standard policy of fire insurance may be characterized as a contract of adhesion; the insurer may issue it to a particular assured, if it so chooses, and the insured may accept it, if he so chooses, but their power of bargaining is limited to the simple matters of whether there will be a contract of fire insurance and what property it will cover.” (at pp. 609-610). This rationale is equally applicable to a contract of temporary insurance.
N. J. S. A. 17:36-5.16, dealing with such contracts, speaks very clearly, in effect, that they shall be deemed to include all the terms and conditions of the standard policy and designated approved endorsements (whether the insured knows of them or not), with certain exceptions not here pertinent, and that they shall expire 10 days after the effective date, if oral, and 60 days, if in writing, unless the contract specifies an earlier date. I take it this plain language can only mean that, regardless of the state of knowledge of the insured, the statutory period of duration shall control in the case of a temporary written contract even if the writing is silent on *80the subject, an express termination date is specified which is beyond the .period or, as here, a duration event is set forth which may or may not occur within 60 days.
It is not difficult to envisage an appropriate reason for the provision dealing with temporary contracts. While it is desirable that persons be able to secure immediate fire insurance coverage by informal contracts, such agreements, are ordinarily very incomplete, covering as between the parties little more than a broad description and location of the. risk and the amount, of insurance desired. The statute does not require- any particular form of written binder; the sketchiest writing will suffice. Oral contracts are generally even less definite. In; the interest of both parties and of the orderly transaction of this important, kind of business, the undertaking should be completed and the formal contract, with all its detail, issued promptly. To accomplish this and avoid controversy, the requirement of a limited time period of effectiveness could well appeal to legislators as desirable. 50 temporary contracts are entirely valid when entered into, as here, but expire automatically at the end of the statutory period anything therein to the contrary notwithstanding. If the insured's agent to procure insurance (here he was the insurer’s agent, as well) has not effectively done so, it is elementary that the insured’s right of action is against him (who in these days is generally also insured against his errors and omissions) rather than against the insurer.
'This mandatory nature of a statutory limitation on the duration of temporary fire insurance contracts has heretofore clearly been the law of this state. Flowers by DiAlton's, Inc. v. American Insurance Co., 42 N. J. Super. 493 (App. Div. 1956), affirming 39 N. J. Super. 44 (Law Div. 1956); Decor-El, Inc. v. Bertsch, 13 N. J. Super. 166 (Law Div. 1951). It has likewise been the view taken in other states having similar statutes which have had occasion to pass on the question. Rosen v. Colonial Cooperative Insurance Co., 51 Misc. 2d 805, 274 N. Y. S. 2d 67 (Sup. Ct. 1966); Eastern Shore of Virginia Fire Ins. Co, v. Kellam, 159 Va. 93, *81165 S. E. 637 (1932). Cf. Rowell v. Georgia Casualty and Surety Co., 109 Ga. App. 631, 136 S. E. 2d 917 (1964); Citizens Casualty Co. of N. Y. v. Hackett, 17 Utah 2d 304, 410 P. 2d 767 (1966). See 3 Richards on Insurance (5th ed. 1952), § 384, p. 1275, § 509, p. 1646, n. 14. The majority cite no authority to the contrary and I can find none.
Therefore I would agree with the Appellate Division that the written binder in this case had expired by operation of law some 16 dajrs before the loss. I further think it beyond question that there was not sufficient evidence to submit to a jury whether any oral contract had been entered into after such expiration, a question fully argued by the parties here. Consequently the insurance company’s motion for judgment at trial should have been granted and I would direct the entry of such a judgment now, with the matter remanded for trial of the insured’s claim against the agent and, depending on the outcome of that contest, subsequent disposition of the latter’s cross-claim against the insurance company.
For reversal — Justices Jacobs, Ebancis, Pkoctok, Schbttino and Haneman — -5.
For modification — Justice Hall — 1.