Court Opinion

ID: 4430631
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:44:44.237947+00
Date Added: 2024-06-11T12:46:04.516004
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.

                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-0568-17T1

SELECTIVE CASUALTY INSURANCE
COMPANY,

        Plaintiff-Appellant,

v.

EXCLUSIVE AUTO COLLISION
CENTER, INC., ANTHONY LAKE,
GERALD HEYMACH, and ARTHUR
LAKE,

     Defendants-Respondents.
___________________________________

              Argued July 16, 2018 – Decided August 16, 2018

              Before Judges Whipple and Suter.

              On appeal from Superior Court of New Jersey,
              Law Division, Sussex County, Docket No. L-
              0359-15.

              Gordon S. Graber argued the cause for
              appellant (Sullivan and Graber, attorneys;
              Gordon S. Graber, of counsel and on the
              briefs; Rafael A. Llano, on the briefs).

              James E. Mackevich argued the cause for
              respondents (Mackevich, Burke & Stanicki,
              attorneys; James E. Mackevich, on the brief).

PER CURIAM
      Plaintiff Selective Casualty Insurance Company (Selective)

appeals from the July 24, 2017 order dismissing counts one, three,

four, and five of its complaint against defendants, Exclusive Auto

Collision Center, Inc. (Exclusive), Anthony Lake, Gerald Heymach,

and   Arthur   Lake,    and   the    September      15,   2017    order    denying

reconsideration.       We affirm.

      Defendant Anthony Lake and his wife own Exclusive.                 Defendant

Gerald   Heymach   is    Exclusive's      general    manager,     and    defendant

Arthur Lake, Anthony's brother, also worked for Exclusive.

      In 2013, Selective issued a Garagekeeper's insurance policy

to Exclusive for liability and casualty claims.                        It provided

coverage   for   vehicles     in    the   care,   custody,       and   control    of

Exclusive and general commercial liability coverage.

      On May 17, 2013, Exclusive filed a complaint against Selective

for failure to make insurance payments.               The suit was settled,

effective November 16, 2014. Included was a release that provided:

           Selective releases and gives up any and all
           claims and rights that it may have against
           Exclusive, its successors, agents or assigns.
           This releases all claims including those of
           which Selective is not aware of and those not
           mentioned in this [r]elease. This [r]elease
           applies to all claims resulting from anything
           which has happened up to now. This settlement
           and release are a resolution of all issues
           between Selective and Exclusive in the
           litigation entitled Exclusive Auto Collision
           Center v. Selective Auto Insurance Company of
           New Jersey, Docket No. L-3672-13.

                                          2                                A-0568-17T1
     On November 24, 2013, a strong windstorm caused tree branches

to fall on vehicles in Exclusive's lot.    Exclusive filed a claim

with Selective with a list of vehicles; Selective received notice

of the claim on November 26, 2013.   Selective's adjuster inspected

the listed vehicles and agreed to pay for the damage.

     The list did not include a 2011 BMW owned by Gianinder Singh

(the Singh BMW).    According to Exclusive, in 2011, the Singh BMW

was damaged and brought to Exclusive for repairs.         Exclusive

repaired the damage and was paid by GEICO.        Selective was not

involved in that.

     On December 19, 2013, Singh brought the vehicle to Morristown

BMW because something was wrong.     A mechanic for Morristown BMW

thought a leak in the vehicle's rear quarter panel that Exclusive

repaired two years prior might have been responsible for the Singh

BMW's electrical problems.    At the direction of Morristown BMW,

the Singh BMW was sent to Exclusive to be inspected.    The vehicle

arrived on either Thursday, January 9 or Friday, January 10, 2014.

Defendant Heymach prepared an estimate to repair some damage but

did not examine the leaking rear quarter panel.

     That weekend, there was another strong storm with wind and

rain.   According to Exclusive, during this storm, a falling tree

limb hit the Singh BMW, damaging a tail light and causing water

to enter the trunk.    Exclusive dried out the trunk, repaired the

                                 3                          A-0568-17T1
tail light, and returned the vehicle to Morristown BMW.   Defendant

Anthony Lake told Morristown BMW to instruct Singh to file a claim

with his insurance company for the electrical damage.     Exclusive

also advised Selective of a potential claim when it became apparent

that Morristown BMW blamed Exclusive for the damage.

     Selective adjuster Wendy Doyle entered the following notes

in Selective's claim log on January 27, 2014:

          [Heymach] called me earlier and said that
          there   was  one   other  vehicle involved.
          Returned call left message.

          Spoke to [Heymach] obtained information from
          him on the 6th vehicle. Order inspection. He
          said the tail light was broken from the tree
          and water got into the trunk. They replaced
          the light themselves and dried out the trunk.
          Apparently, there was more water in the trunk
          than thought now the wires are corroded and
          have to be replaced.

     After the Singh BMW was returned to Morristown BMW, Selective

appraiser Eugenio Santos inspected the vehicle.   Doyle filled out

an assignment sheet for Santos, which indicated the vehicle was

damaged during the November 2013 storm.      Santos confirmed the

replacement of the tail light and prepared an estimate.      Santos

determined the vehicle was a total loss and issued a check to BMW

North America for $37,805.83, and to Morristown BMW for $13,938.58.

Selective then sold the vehicle for salvage value.

                                 4                          A-0568-17T1
     Selective's claim log notes, dated January 29, 2014, indicate

Morristown BMW attributed the vehicle's damage to Exclusive.       In

particular, Santos wrote that Morristown BMW noted "MUST SEND TO

BODY SHOP FIRST TO FIX WATER LEAK FROM REPAIR WELDS IN REPAIR!!!"

When Santos asked for clarification, Morristown BMW stated "this

was how the water got into the trunk due to poor workmanship by

the shop."    Also on January 29, 2014, Doyle entered the following

note in the claim log:

           I called [Heymach] at    insured.  He was and
           wasn't surprised. He    said Yeah it was some
           storm we had. He said   there was water in the
           trunk and it got        into the electrical
           compartment.

Exclusive asserts the November storm was a windstorm without rain,

and there was over a 1/2 inch of rain during the January storm.

     On February 19, 2014, Doyle received a telephone call from

"Art from BMW."     Art explained the electrical damage was caused

by the broken tail light and had nothing to do with faulty welding.

"Art from BMW" was defendant Arthur Lake, Anthony's brother.       At

that time, Arthur was a liaison between Exclusive and Morristown

BMW and had a desk at Morristown BMW's offices. In his deposition,

Arthur confirmed he spoke with Doyle regarding the Singh BMW.

     Selective reviewed the Singh BMW claim and became suspicious

after learning that Exclusive performed welding work on the vehicle

in 2011.     According to Singh, Morristown BMW told him the damage

                                  5                         A-0568-17T1
was likely due to "continuous water leakage" because "whoever

fixed the car probably did not do a good job."

     On    June     4,       2015,   Selective       filed   a   complaint   against

defendants, alleging violations of the New Jersey Insurance Fraud

Prevention Act, breach of contract, breach of good faith and fair

dealing, and unjust enrichment.                  Selective maintains Exclusive

fraudulently represented that the Singh BMW was damaged during the

November 2013 storm.           Defendants filed an answer and counterclaim,

asserting claims for breach of contract and breach of fiduciary

duties.    According to Exclusive, whether the source of the damage

to the Singh BMW was the defective repair in 2011, or water

infiltration when the tail light was broken by the falling tree

limb, its insurance policy with Selective would have covered both

causes of damage.

     On October 31, 2016, defendants moved for summary judgment.

The court denied defendants' motion without prejudice on January

6, 2017, to allow for the completion of discovery.                     On June 19,

2017, defendants filed a second motion for summary judgment,

arguing,    among    other       things,   the    previously      executed   release

barred Selective's current cause of action.                      On July 11, 2017,

Selective   filed        a    cross-motion     for    partial    summary   judgment,

seeking a declaration that defendants violated the New Jersey

Insurance Fraud Prevention Act and to dismiss the counterclaims.

                                           6                                 A-0568-17T1
      On July 24, 2017, the trial court issued an order with a

statement of reasons.         Regarding the Singh BMW, the court found

the November 16, 2014 release barred Selective's cause of action.

In particular, the court noted the language of the release broadly

included "all claims, including those of which Selective is not

aware   and   those   not    mentioned       in   this   release."     The     court

determined the Singh BMW was included because "the language of the

release clearly refers to all possible claims arising out of

actions occurring prior to the release date November 16, 2014."

The   court   dismissed      defendants'      counterclaims      for   breach    of

contract and bad faith.

      On August 7, 2017, defendants moved for frivolous litigation

sanctions,     and    on     August    9,     2017,      Selective     moved    for

reconsideration of the July 24, 2017 order.                   On September 15,

2017, the judge delivered his decision from the bench, denying

both motions.    This appeal followed.

      When we review a grant of summary judgment, we use the same

standard as the trial court.          Globe Motor Co. v. Igdalev, 225 N.J.
469, 479 (2016) (citations omitted).              A court should grant summary

judgment,     "if      the     pleadings,         depositions,       answers     to

interrogatories       and    admissions      on    file,   together     with    the

affidavits, if any, show that there is no genuine issue as to any

material fact challenged and that the moving party is entitled to

                                         7                                A-0568-17T1
a judgment or order as a matter of law."    Ibid. (citing R. 4:46-

2(c)).   The evidence must be viewed in "the light most favorable

to the non-moving party and analyze whether the moving party was

entitled to judgment as a matter of law."     Mem'l Props., LLC v.

Zurich Am. Ins. Co., 210 N.J. 512, 524 (2012) (citation omitted).

"Rule 4:46-2(c)'s 'genuine issue [of] material fact' standard

mandates that the opposing party do more than 'point[] to any fact

in dispute' in order to defeat summary judgment."     Igdalev, 225
N.J. at 479 (quoting Brill v. Guardian Life Ins. Co. of Am., 142
N.J. 520, 529 (1995)) (alteration in original).

     Selective argues the trial court engaged in improper fact-

finding when it determined Selective was aware of a potential

fraud claim against Exclusive when it executed the release and

erroneously interpreted the release.     Selective contends it was

not on notice of the true nature of the Singh BMW claim because

Exclusive intentionally and materially misrepresented the claim

was from the November 2013 storm.      Selective asserts after the

release was executed, it discovered the Singh BMW was involved in

a prior accident, Exclusive performed repairs on it for the prior

accident, and it was not present at Exclusive's lot during the

November storm.

     In his statement of reasons, the judge stated:

                                8                          A-0568-17T1
           Defendants claim that in late January of 2014
           BMW notified Plaintiff of a possible claim due
           to Defendants' defective welding repair. It
           is apparent from an email exchange between
           Selective adjuster Wendy Doyle and Selective
           appraiser Eugenio Santos that Selective was
           aware of the alleged claim for defective
           welding by the Defendants. . . .       Despite
           knowing this, Selective settled the claim and
           destroyed the vehicle, all prior to the
           release date.

The court concluded any claim regarding the Singh BMW was swept

up in the broad language of the release since Selective knew of

an issue with that claim in January 2014 - before it executed the

release.

     We agree the record supports the conclusion Selective was on

notice that the Singh BMW's damage may have been attributable to

something other than tree limb damage.          Selective's own claim log

illustrates on January 29, 2014, Santos wrote Morristown BMW

reported "MUST SEND TO BODY SHOP FIRST TO FIX WATER LEAK FROM

REPAIR WELDS IN REPAIR!!!"

     Moreover,    while   Selective       continually   alleges   Exclusive

misrepresented the Singh BMW was damaged in the November storm,

it provided no evidence Exclusive representatives made such a

statement.   There may have been confusion since there were two

separate incidents in which falling tree limbs damaged vehicles

during a storm.   Furthermore, because the Singh BMW was destroyed,

it is impossible to now determine if the damage was caused by

                                      9                             A-0568-17T1
Exclusive's repair in 2011 or by the January storm that broke the

tail light, causing water to enter the vehicle.           Since the release

broadly covered "any and all claims . . . including those of which

Selective is not aware," the trial court correctly determined it

covered the Singh BMW claim.

      Selective contends the release only applied to claims that

accrued at execution, and the parties only intended to settle the

unrelated prior litigation.        However, the express language of the

release broadly encompasses any and all claims Selective had or

may have had with Exclusive.           "A basic principle of contract

interpretation is to read the document as a whole in a fair and

common sense manner."        Hardy ex rel. Dowdell v. Abdul-Matin, 198
N.J. 95, 103 (2009) (citing DiProspero v. Penn, 183 N.J. 477, 496-

97 (2005)).     A court does not "make a better contract for either

of the parties than the one which the parties themselves have

created."      Maglies v. Estate of Guy, 193 N.J. 108, 143 (2007)

(Hoens, J., dissenting) (citation omitted).         "[W]hen the terms of

a   contract   are   clear   and   unambiguous,   there   is   no   room   for

construction and the court must enforce those terms as written."

Watson v. City of E. Orange, 175 N.J. 442, 447 (2003) (citations

omitted).      As the trial court determined, the release's broad,

clear, and unambiguous language includes the Singh BMW claim,

which was known, when Selective executed the release.

                                     10                              A-0568-17T1
      Selective compares this matter to Central Paper Distribution

Services. v. International Records Storage & Retrieval Service,

Inc., 325 N.J. Super. 225 (App. Div. 1999), arguing a plenary

hearing was required to determine the scope of the release.                   In

Central Paper, we reversed a grant of summary judgment, finding

the trial court improperly determined whether the dealings between

the parties constituted an offer and acceptance to create a

contract, without a plenary hearing. Id. at 232-33. We determined

there were genuine issues of material fact precluding summary

judgment.   Here, there is no genuine issue of material fact.               The

release's   language   expressly    details     that    all   of   Selective's

claims against Exclusive up to the effective date were subject to

the release.     The release broadly covered all claims, including

those unknown.

      Selective argues the trial court should have held a plenary

hearing to ascertain whether the parties intended to waive claims

procured by fraud when executing the release.                 It asserts the

court ignored the interpretive principles for construing a general

release established in Bilotti v. Accurate Forming Corp., 39 N.J.
184, 203 (1963).       Reliance on Bilotti, however, is misplaced.

There, our Supreme Court held a general release could not shield

the   defendants   from   liability      when   there   was   fraud    in   the

inducement.    Id. at 204-05.      It concluded that agreement did not

                                    11                                 A-0568-17T1
provide for a release from "[a] fraud claim arising out of the

transaction."       Id. at 205.          Here, Selective does not allege

Exclusive fraudulently induced it to enter into the release, but

that     the   scope     of    the   release    does     not   cover    fraudulent

transactions.

       Selective contends the court should have allowed extrinsic

evidence to discover the parties' intent under Atlantic Northern

Airlines, Inc. v. Schwimmer, 12 N.J. 293 (1953).                     Selective has

not    illustrated       how    extrinsic      evidence      could   aid   in      the

interpretation      of    the   release,     while     not   altering   its     clear

language.      If Selective expected the release to encompass only the

prior litigation, it could have executed a limited release or

included exclusion provisions.             We examine a release as we would

any other contract to discern the intention of the parties.                       When

express language defines the terms, the parties are bound and

precluded from alleging a contrary intent in order to vary the

terms.    Domanske v. Rapid-American Corp., 330 N.J. Super. 241, 246

(App. Div. 2000).

       Finally, we note Selective's representative, Doyle, testified

Exclusive's policy would have covered defective repairs or damage

from a falling tree branch.           As such, it is unclear why Exclusive

would intentionally misrepresent that the Singh BMW was involved

                                        12                                    A-0568-17T1
in the November 2013 windstorm since the insurance policy should

have covered the damage anyway.

    Affirmed.

                              13                         A-0568-17T1