BEAUTY PLUS TRADING COMPANY, INC. VS. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA (L-9387-15, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-3380-16T3

BEAUTY PLUS TRADING COMPANY, INC.,

Plaintiff-Appellant,

v.

NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA,

Defendant-Respondent.
______________________________

Argued May 17, 2018 – Decided August 14, 2018

Before Judges Simonelli and Gooden Brown.

On appeal from Superior Court of New Jersey,
Law Division, Bergen County, Docket No.
L-9387-15.

Alexander J. Anglim argued the cause for
appellant (Hartmann & Anglim, LLC, attorneys;
Alexander J. Anglim, on the briefs).

Timothy G. Hourican argued the cause for
respondent (Brown Gavalas & Fromm, LLP,
attorneys; Robert J. Brown, on the brief).

PER CURIAM

In this insurance coverage case, plaintiff Beauty Plus

Trading Company, Inc. appeals from the March 7, 2017 Law Division
orders granting summary judgment to defendant National Union Fire

Insurance Company of Pittsburgh, Pennsylvania, and denying its

cross-motion for summary judgment. We affirm.

We derive the following facts from evidence submitted by the

parties in support of, and in opposition to, the summary judgment

motion, viewed in the light most favorable to plaintiff. Angland

v. Mountain Creek Resort, Inc., 213 N.J. 573, 577 (2013) (citing

Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995)).

Plaintiff is a wholesale distributor of hair extensions and similar

products with a warehouse and offices in Moonachie, New Jersey.

Plaintiff's warehouse is open Monday through Friday until 6:00

p.m.

On November 10, 2014, a shipping container with 487 cartons

of "human hair weaves" left the port of Qingdao, China, for

plaintiff's warehouse in Moonachie. The container arrived at Port

Elizabeth, New Jersey, on December 9, 2014. Harbor Express

Trucking Company picked up the container from Elizabeth at

approximately 11:37 a.m. on Friday, December 12, 2014, and

delivered it to plaintiff's warehouse at 5:00 p.m. that day with

the original seal intact. Brandon Cho, plaintiff's assistant

warehouse manager, signed a "Freight Memo (Bill)" from Harbor

Express to confirm receipt of the container.

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 With only one hour left before closing, warehouse managers

determined they did not have enough time to unload the container

because it would take over an hour to unload, and their employees

were "particularly reluctant to work overtime on Fridays."

Therefore, the workers cut the seal on the container, opened the

doors, and backed the container into the warehouse unloading bay,

where they left it until they returned to work on Monday. However,

when the workers arrived at work at about 7:00 a.m. on Monday, the

container was missing. Warehouse surveillance video revealed that

on Saturday, December 13, 2014, at approximately 9:00 p.m., someone

drove a white truck "up to the container, hooked a tractor to the

chassis, and drove away" with it. Plaintiff reported the theft

to the police, who later recovered the chassis and container with

397 cartons of goods missing.

Plaintiff filed a claim with defendant under their marine

cargo policy, which "cover[ed] all shipments of lawful goods and

merchandise . . . consisting principally of new wigs and similar

merchandise incidental" to plaintiff's business "[a]gainst all

risk of physical loss or damage from any external cause" occurring

"on or after August 15, 2011." The policy insured plaintiff

against perils "of the seas and inland waters, fires, assailing

thieves, jettisons, barratry of the Master and Mariners, and all

3 A-3380-16T3
other like perils, losses and misfortunes . . . except as may be

otherwise provided . . . or endorsed" in the policy.

Under the policy's "Warehouse to Warehouse" clause, insurance

coverage "attache[d] from the time the goods [left] the warehouse

and/or store at the place named in the policy for the commencement

of the transit" and continued until the goods were "delivered to

final warehouse at the destination named in the policy or until

the expiry of the fifteen . . . days (or thirty . . . days if the

destination to which the goods [were] insured [was] outside the

limits of the port) whichever [should] first occur."

After delivery, the policy's "Loading and Unloading" clause

extended coverage for plaintiff's goods as follows:

[A]fter they arrive[d] at the final
destination, and continuing thereafter until
they [were] unloaded (including into
containers, trailers and rail cars) and
throughout the unloading process, not to
exceed [seventy-two] hours after arrival of
the delivering conveyance at final destination
but not later than [twenty-four] hours after
the receiver ha[d] knowledge of the arrival
of the delivering conveyance.

Additionally, the policy's "Storage Coverage" endorsement

specifically provided coverage for "goods and

merchandise . . . while temporarily stored in [plaintiff's]

warehouses[.]"

4 A-3380-16T3
 Defendant hired Global Marine Surveys, Inc. to investigate

plaintiff's claim. Using the policy's valuation provision, Global

Marine calculated the value of the loss at $283,804.46 in damages,

plus $1378.55 for "the trucking charges and the towing and storage

charges[,]" amounting to a total loss of $285,183.01. However,

in a March 2, 2015 letter, relying on Global Marine's investigation

and the policy's provisions, defendant denied coverage for the

theft under the "Warehouse to Warehouse," "Loading and Unloading,"

and "Storage Coverage" clauses.

According to defendant, because "the [Warehouse to Warehouse

clause] provide[d] coverage for [plaintiff's] goods while such

goods were in transit and end[ed] when the goods [were] no longer

in transit[,]" there was no coverage "because the subject

shipment . . . had reached [its] final destination" at the time

of the theft. Defendant explained further that coverage under the

policy's "Loading and Unloading clause had also

terminated . . . at the time the loss occurred" because "the

theft . . . occurred more than [twenty-four] hours after

[plaintiff] had knowledge of the arrival of the container at its

premises." Additionally, according to defendant, because "the

subject goods were not being temporarily stored in the warehouse

at the time they were stolen[,]" but "were outside [plaintiff's]

5 A-3380-16T3
warehouse" instead, the "Storage Coverage" endorsement did not

apply.

Defendant's letter went on to "discuss another issue

that . . . preclude[d] coverage . . . under the [p]olicy."

According to defendant, the policy did not cover "reckless and

grossly negligent acts or omissions[,]" and its investigation

showed that plaintiff was "reckless and/or grossly negligent in

failing to protect and secure the subject shipment prior to its

theft." In particular, their investigation

revealed that a king pin was not used to lock
the container chassis while on the premises;
the container was not kept in a secured and/or
fenced in area while on the premises; there
was no security while the container was on the
premises; the goods were not stored in the
warehouse at the premises[;] and no means or
precautions were taken to prevent the theft
of the container.

On October 27, 2015, plaintiff filed a complaint against

defendant, alleging breach of contract and seeking a declaratory

judgment that its marine cargo policy covered its claim for the

stolen goods. After discovery concluded, the parties filed cross-

motions for summary judgment. Following oral argument, Judge

Charles E. Powers, Jr. granted defendant summary judgment and

denied plaintiff's cross-motion in corresponding March 7, 2017

orders.

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 In his written statement of reasons accompanying the orders,

the judge determined that there was no coverage under the policy's

"Warehouse to Warehouse" clause because "[that] clause only

applie[d] while the goods [were] in transit or awaiting transit.

Here, the goods were delivered and [plaintiff] exercised dominion

and control over them." The judge also determined that the

"Storage Coverage" endorsement did "not provide coverage for the

loss" because that clause "only applie[d] when the goods [were]

being stored in [plaintiff's] warehouse[,]" and "it [was]

undisputed that the goods were not being stored in the warehouse

at the time of the theft."

Additionally, the judge determined that the "Loading and

Unloading" clause did not provide coverage for the loss because

the clause "unambiguously provide[d] coverage for up to [twenty-

four hours] after the goods [were] received at their final

destination. Here, [plaintiff] received the goods and chose not

to secure them within the [twenty-four-hour] period." The judge

explained that

[t]here is nothing inequitable [about] having
[plaintiff] assume the risk of loss from
Saturday at 5 p.m. onward. Rather, it is clear
that the policy was written so that the risk
of loss would pass back to the insured after
the [twenty-four] hours had elapsed. The
[c]ourt will not re-write an unambiguous
policy.

7 A-3380-16T3
 The judge rejected plaintiff's argument that the next

business day rule extended coverage to Monday under the "Loading

and Unloading" clause of the policy. The judge acknowledged that

under Vuarnet Footwear, Inc. v. Sea-Rail Service Corp., 334 N.J.

Super. 442, 454 (App. Div. 2000), the next business day rule

extended the time "by operation of law" until the next business

day "where a contractual time period within which an act must be

performed falls on a Saturday or Sunday[.]" The judge noted

"courts have found that when a party's ability to perform an

obligation is frustrated by the deadline falling on a weekend, the

deadline will be tolled until the following business day."

However, the judge explained that under the case law, the next

business day rule was not applicable where "there was no act to

be performed by the insured. Rather, the coverage merely lapsed

on a weekend."

Thus, in rejecting plaintiff's reliance on Vuarnet, the judge

reasoned:

Plaintiff‘s reliance upon Vuarnet
Footwear is misplaced. First, unlike the
present case, Vuarnet Footwear involved an act
to be performed by the insured within the
contractual period—that the insured would
effectuate transit of the goods through their
trucking service. [Plaintiff] argues that the
act to be performed was the unloading of the
cargo and their ability to do so was
frustrated since the cargo was delivered on a
Friday evening. However, the Loading and

8 A-3380-16T3
 Unloading clause does not contemplate that the
parties perform an act—it merely extends
coverage for a [twenty-four-hour] period after
the delivery. In other words, the fact that
the shipment was delivered on a Friday evening
did not prevent [plaintiff] from carrying out
a requirement under the
contract. . . . Here, there was no act for
[plaintiff] to perform—merely coverage by
[defendant] for [twenty-four hours] after
delivery to the warehouse.

Secondly, assuming arguendo that the
unloading of the goods could constitute an act
to be performed for purposes of the next
business day rule, the Vuarnet Footwear
court's discussion of this principle was based
on the facts of that case. The court noted
that the insured could not complete transit
of the goods within the required [thirty days]
and the final day of the period fell on a
weekend. In the present case, the goods had
actually arrived at the warehouse and had been
received by [plaintiff]. In Vuarnet Footwear,
the goods were at another location and
apparently could not be accessed before
coverage expired. Thus, the logic behind the
next business day rule is not applicable in
this case.

Judge Powers also rejected plaintiff's reliance on Estate of

Harrington v. City of Linden, 338 N.J. Super. 500 (App. Div. 2001),

to support their contention that "their ability to unload the

goods [was] irrelevant since the expiration fell on a weekend."

The judge explained:

[Plaintiff] contends that Estate of
Harrington supports the proposition that it
is irrelevant that they could have unloaded
the goods on Friday evening or over the
weekend. However, this is a misinterpretation

9 A-3380-16T3
 of the court's ruling. The court merely
concluded that the applicable provision of the
Tort Claims Act allowed the plaintiff to
effectuate delivery by certified mail or hand-
delivery. In other words, since the plaintiff
was unable to effectuate hand delivery on
Saturday, she was entitled to do so on the
next business day. Specifically, the court
noted that there was "ample support for the
proposition that where the ninetieth day after
accrual of a tort claim against a public
entity falls on a Saturday, the required
notice can be timely filed by hand-delivery
on the following Monday." Id. at 502. As
such, Estate of Harrington does not support
[p]laintiff's position.

This appeal followed.

On appeal, plaintiff raises the following points for our

consideration:

POINT I

THE TRIAL COURT ERRED BY FAILING TO APPLY THE
'NEXT BUSINESS DAY' RULE TO THE TIME LIMIT IN
CLAUSE [SIXTY-SEVEN] OF THE POLICY.

A. THE NEXT BUSINESS DAY PRINCIPLE
APPLIES TO TIME LIMITS EMBEDDED IN
INSURANCE POLICY CLAUSES, PURSUANT
TO [VUARNET FOOTWEAR].

B. THE TRIAL COURT'S ANALYSIS OF
VUARNET FOOTWEAR WAS FLAWED.

C. [DEFENDANT'S] ADDITIONAL
ARGUMENTS ARE ALSO FLAWED.

D. APPLICATION OF THE NEXT BUSINESS
DAY RULE IS REQUIRED UNDER WELL-
ESTABLISHED PRINCIPLES OF NEW
JERSEY INSURANCE LAW.

10 A-3380-16T3
 POINT II

IN LIGHT OF THE UNDISPUTED FACTS, INCLUDING
THE UNDISPUTED VALUE OF THE LOSS, THE LOWER
COURT SHOULD HAVE GRANTED PLAINTIFF'S CROSS-
MOTION FOR SUMMARY JUDGMENT.

We review a motion for summary judgment applying the same

standard used by the trial court. Steinberg v. Sahara Sam's Oasis,

LLC, 226 N.J. 344, 366 (2016). That standard is well-settled.

[I]f the evidence of record—the pleadings,
depositions, answers to interrogatories, and
affidavits—"together with all legitimate
inferences therefrom favoring the non-moving
party, would require submission of the issue
to the trier of fact," then the trial court
must deny the motion. On the other hand, when
no genuine issue of material fact is at issue
and the moving party is entitled to a judgment
as a matter of law, summary judgment must be
granted.

[Ibid. (citations omitted) (quoting R. 4:46-
2(c)).]

If there is no genuine issue of material fact, we must "decide

whether the trial court correctly interpreted the law." DepoLink

Court Reporting & Litig. Support Servs. v. Rochman, 430 N.J. Super.

325, 333 (App. Div. 2013) (quoting Massachi v. AHL Servs., Inc.,

396 N.J. Super. 486, 494 (App. Div. 2007), overruled by Wilson v.

City of Jersey City, 209 N.J. 558 (2012)). We review issues of

law de novo and accord no deference to the trial judge's legal

conclusions.

11 A-3380-16T3
 Applying these principles, we affirm substantially for the

reasons set forth by Judge Powers in his comprehensive and well-

reasoned statement of reasons accompanying the corresponding

orders. We add only the following comments.

"An insurance policy is a contract that will be enforced as

written when its terms are clear in order that the expectations

of the parties will be fulfilled." Flomerfelt v. Cardiello, 202

N.J. 432, 441 (2010). Courts should interpret an insurance policy

in accordance with the "plain and ordinary meaning" of its terms.

Memorial Props., LLC v. Zurich Am. Ins. Co., 210 N.J. 512, 525

(2012) (quoting Flomerfelt, 202 N.J. at 441). Because insurance

policies are contracts of adhesion, courts should construe them

liberally in favor of the insured, to afford coverage "to the full

extent that any fair interpretation will allow." Longobardi v.

Chubb Ins. Co. of N.J., 121 N.J. 530, 537 (1990) (quoting Kievit

v. Loyal Protective Life Ins. Co., 34 N.J. 475, 482 (1961)).

However, in the absence of an ambiguity, courts should not "engage

in a strained construction to support the imposition of liability."

Ibid. They should also avoid writing "for the insured a better

policy of insurance than the one purchased." Walker Rogge, Inc.

v. Chelsea Title & Guar. Co., 116 N.J. 517, 529 (1989) (citation

omitted).

12 A-3380-16T3
 Here, the plain language of the policy is unambiguous. Under

the policy's "Warehouse to Warehouse" clause, coverage attached

when the goods left Qingdao, China, on November 10, 2014, and

terminated when the goods arrived at their final destination,

plaintiff's warehouse in Moonachie, at approximately 5:00 p.m. on

December 12, 2014. Under the policy's "Loading and Unloading"

clause, the policy extended coverage for seventy-two hours after

delivery, "but not later than" twenty-four hours after plaintiff

had notice of delivery. Thus, under the plain language of the

policy, the goods were insured until 5:00 p.m. on Saturday,

December 13, 2014. Because the theft occurred at approximately

9:00 p.m. that day, the policy did not cover plaintiff's loss.

Plaintiff argues, however, that in spite of the plain language

of the policy, the court should have applied the next business day

rule to extend the policy's coverage until Monday, December 15,

2014. Generally, courts apply the next business day rule when the

time for a party's performance under a contract or insurance policy

expires on a weekend or holiday. See, e.g., Vuarnet Footwear, 334

N.J. Super. at 455 (applying the next business day rule to extend

an insurance coverage period that lapsed on a Saturday to the

following Monday, "particularly as it appear[ed] that its truck

carrier . . . either did not have access to the bonded warehouse

on weekends or did not itself initiate transport on those days");

13 A-3380-16T3
Bohles v. Prudential Ins. Co. of Am., 84 N.J.L. 315, 316 (E. & A.

1913) (extending a one-month grace period for paying an insurance

premium that lapsed on a Sunday until the next Monday, "the first

day thereafter upon which business could be lawfully transacted").

However, if the contract does not require the party to act

or an event to occur within the designated period, the fact that

the final day falls on a weekend does not affect the parties'

performance under the contract. See Flowers by Di Alton's v. Am.

Ins. Co., 39 N.J. Super. 44, 48-49 (Law Div.), aff’d, 42 N.J.

Super. 493 (App. Div. 1956) (finding the next business day rule

only applied to "acts to be performed" cases). In that event, the

rule does not apply, and "an ordinary contract of

insurance . . . for a specified period of time will not be extended

when the last day of the period falls on [a weekend]." Id. at 49.

Here, the policy did not require plaintiff to perform an act,

such as unloading the goods, within the twenty-four hours of

extended coverage. Nor did the contract require any other event

to occur within the designated period. Plaintiff was free to

leave the goods in the container as it chose to do. Plaintiff's

decision did not, however, prevent the policy from lapsing and

transferring the risk of loss back to plaintiff at 5:00 p.m. on

Saturday, December 13, 2014. To rule otherwise would grant

14 A-3380-16T3
plaintiff "a better policy of insurance than the one [it]

purchased." Walker Rogge, 116 N.J. at 529.

Equally unavailing is plaintiff's argument that the court

should interpret the contract in favor of coverage to conform to

its objectively reasonable expectations. Where the language of a

contract is ambiguous, courts apply the doctrine of reasonable

expectations to "enforce only the restrictions and the terms in

an insurance contract that are consistent with the objectively

reasonable expectations of the average insured." Meier v. N.J.

Life Ins. Co., 101 N.J. 597, 612 (1986); see also Di Orio v. N.J.

Mfrs. Ins. Co., 79 N.J. 257, 269-70 (1979). Consistent with these

principles, courts should construe exclusions narrowly and "may

vindicate the insured's reasonable expectations over the policy's

literal meaning 'if the text appears overly technical or contains

hidden pitfalls, cannot be understood without employing subtle or

legalistic distinctions, is obscured by fine print, or requires

strenuous study to comprehend.'" Abboud v. Nat'l Union Fire Ins.

Co., 450 N.J. Super. 400, 409 (App. Div. 2017) (quoting Zacarias

v. Allstate Ins. Co., 168 N.J. 590, 601 (2001)). The party's

expectation of coverage must be real and objectively reasonable.

See id. at 410.

Here, the policy language is unambiguous and the "Loading and

Unloading" clause is an expansion, not a limitation, on coverage.

15 A-3380-16T3
In light of our decision that the next business day rule does not

apply to extend coverage under the policy, we need not address

plaintiff's argument that it was entitled to summary judgment

under its "all-risk" policy, despite its "reckless and/or gross[]

negligen[ce] in failing to protect and secure the subject shipment

prior to its theft[.]"

Affirmed.

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