WAYNE SAVAGE VS. PROGRESSIVE INSURANCE COMPANYÂ (L-4048-14, ESSEX COUNTY AND STATEWIDE)
A-3358-15T2
| N.J. Super. Ct. App. Div. | Jul 27, 2017Background
- Savage applied for auto insurance with Progressive on Dec. 10, 2013, after arranging coverage through an intermediary (A.T.) at a used-car dealership.
- Application showed a six-month policy effective Dec. 10, 2013, with a first installment of $593.40 and indicated the initial payment would be by electronic funds transfer from a named checking account.
- Savage testified he paid A.T. $593 cash for the first installment but produced no receipt; Progressive's practice does not permit cash payments and has no record of receiving payment.
- Progressive's bank reported the initial electronic payment was not honored; Progressive mailed a rescission notice dated Dec. 16, 2013, to Savage's Newark address and declared the policy void ab initio.
- Savage was cited for driving without insurance on Jan. 8, 2014, filed a CFA claim and treble damages against Progressive in Special Civil Part; case transferred to Civil Part, bench trial held, court dismissed Savage’s claims with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of coverage after alleged payment | Savage: he paid first installment (cash via A.T.) and had a receipt; therefore coverage existed | Progressive: no record of cash payments; company does not accept cash; bank rejected EFT so no payment was made | Held: Payment was not made; rescission was proper and policy void ab initio |
| Compliance with N.J.S.A. 17:29C-10 (notice requirements) | Savage: Progressive failed to cancel/notify in statutorily required manner | Progressive: sent rescission notice Dec. 16, 2013; retained duplicate; USPS manifest shows mailing | Held: Even if treated as cancellation, evidence (witness testimony and manifest) supports compliance; statute inapplicable to rescission ab initio, but requirements were met in any event |
| Application of Consumer Fraud Act (CFA) treble damages | Savage: alleged wrongful rescission under CFA meriting treble damages | Progressive: rescission lawful due to nonpayment; no consumer fraud | Held: CFA claim fails because rescission was proper due to nonpayment |
| New arguments on appeal (e.g., online transaction proof, judge bias, policy ambiguities) | Savage raised issues about online transaction evidence, judicial objectivity, and ambiguity in insurance contract | Progressive: these issues were not raised at trial; irrelevant to core fact of nonpayment | Held: Appellate court declined to consider issues not raised below (no jurisdictional or great public interest exceptions) |
Key Cases Cited
- Rova Farms Resort, Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474 (trial-court factual findings binding on appeal when supported by evidence)
- In re Return of Weapons to J.W.D., 149 N.J. 108 (deference appropriate where credibility issues predominate)
- Allstate N.J. Ins. Co. v. Lajara, 222 N.J. 129 (questions of law reviewed de novo)
- Farmers Mut. Fire Ins. Co. of Salem v. N.J. Prop.-Liab. Ins. Guar. Ass'n, 215 N.J. 522 (standards for appellate review of legal questions)
- Manalapan Realty v. Twp. Comm., 140 N.J. 366 (legal conclusions receive no special deference)
- Tucker v. Allstate Insurance Co., 195 N.J. Super. 230 (insurer may rescind/void policy when premium payment fails)
- First Am. Title Ins. Co. v. Lawson, 177 N.J. 125 (rescission voids agreement ab initio)
- Celino v. Gen. Accident Ins., 211 N.J. Super. 538 (statutory requirement that duplicate mailed notice be certified as true copy contemporaneously)
- Nieder v. Royal Indemn. Ins. Co., 62 N.J. 229 (appellate court will not consider arguments not raised below absent jurisdictional/public-interest grounds)