NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-0570-24
ILYA KUSHNER and FRANCIS GUZMAN,
Plaintiffs-Appellants,
v.
FARMERS OF SALEM,
Defendant-Respondent. ________________________
Submitted September 23, 2025 – Decided October 31, 2025
Before Judges DeAlmeida and Torregrossa-O'Connor.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-4832-23.
Jeffrey A. Bronster, attorney for appellants.
Methfessel & Werbel, attorneys for respondent (Gina M. Stanziale, on the brief).
PER CURIAM
Plaintiffs, Ilya Kushner and Francis Guzman, appeal from a September
16, 2024 order of the Law Division granting summary judgment in favor of defendant, Farmers of Salem, and from a subsequent October 25, 2024 order,
denying plaintiffs' motion for reconsideration. Plaintiffs assert the trial court
erroneously found defendant properly rescinded homeowners' insurance
coverage after a fire destroyed plaintiffs' newly purchased house roughly six
weeks after plaintiffs closed on the sale. The court found defendant correctly
determined plaintiffs had not "customarily occupied" the property as the
homeowners' insurance policy (the policy) required. We affirm.
I.
A.
We review the factual record in the light most favorable to plaintiffs as
the non-moving party, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540
(1995), and the following facts are largely undisputed. On June 13, 2023,
plaintiffs purchased a home in Harrington Park, and defendant issued plaintiffs
a homeowners' insurance policy. A fire destroyed the house on July 29, 2023,
resulting in a total loss.
Plaintiffs obtained the policy after submitting an insurance application to
defendant on June 1, 2023. The application identified the "occupancy" as
"Owner Occupied Primary." The following pertinent questions appeared on the
application: "Will any part of the house be vacant or unoccupied?" and "Is the
A-0570-24 2 building undergoing renovations or construction?" The response column
reflected "No" next to both questions. The column located to the right of the
response column for each question, entitled "Remarks if applicable," was left
blank.1 The following language appeared on that same page: "Days Until
Occupied (if applicable): 0-30 Days." Kushner's signature appeared under a
statement representing, "I have read the above application and I declare that to
the best of my knowledge and belief all of the foregoing statements are true."
Coverage commenced on the day of the closing. The policy contained
language, under the heading "Additional Policy Provisions," specifically
requiring the residence be "customarily occupied." That phrase was not further
defined in the policy, which stated: "Unless otherwise agreed to in this policy
by us, it is understood that the covered dwelling is owned and customarily
occupied by you and this is the condition of hazard and use that we undertake to
insure under this policy." The same section contained a provision entitled
"Losses Not Insured," and stated:
The following exclusion is added:
1 The responses and signature in the copy of the application included in plaintiffs' appendix appear to have been entered via electronically fillable format. The signature also appears electronically authorized. A-0570-24 3 Other Than Owner Occupancy Exclusion We do not provide insurance for a covered dwelling that is not owned and customarily occupied by you. A provision entitled, "Liability Not Insured," similarly provided:
Other Than Owner Occupancy Exclusion We do not cover bodily injury or property damage arising out of a covered dwelling that is not owned and customarily occupied by you.
After the fire, plaintiffs filed a claim with defendant for first-party
property damage under the policy. After investigating, defendant denied
plaintiffs' claim. By letter dated August 31, 2023, defendant first notified
plaintiffs that it was rescinding the policy and declaring it "void back to the
inception date of June 13, 2023." Defendant indicated it considered the policy
void because it was issued in reliance upon plaintiffs' material
misrepresentations regarding intended renovations and intent to occupy.
By letter dated September 5, defendant advised plaintiffs that their claim
had been denied, again explaining the policy had been rescinded. Defendant
indicated its investigation revealed "the dwelling was undergoing renovations
and unoccupied on the date of loss, as well as at the time the policy incepted on
June 13, 2023." Specifically, defendant indicated plaintiffs "hired a contractor
by the name of Ronnie Garcia" to perform renovations on the house, which
A-0570-24 4 constituted a "misrepresentation" on the insurance application. Further,
defendant determined plaintiffs did not occupy the premises because "[t]he only
contents in the home were some boxes of clothing in the garage and a box of
Derek Jeter memorabilia in the basement."
On September 7, 2023, plaintiffs filed a complaint against defendant
alleging breach of contract and bad faith. They asserted they complied with the
terms of the policy, their insurance application contained "no material
misrepresentations of existing fact," and "defendant's attempted recission was a
bad faith effort to avoid payment of plaintiffs' claim." Defendant's answer
alleged various defenses, including: "the property in question was not owner
occupied at the time of the loss and there [wa]s no coverage," and "plaintiff
made a material misrepresentation in the application and the insurance policy is
deemed void ab initio."
Discovery revealed certain undisputed facts. At the time of the fire,
plaintiffs were staying in a rental house nearby; they were not sleeping or eating
in the new house. There was no power to the home when the fire occurred, the
home was not yet furnished, and only six boxes were in the garage and basement.
In his deposition, Ilya Kushner explained, prior to the closing, plaintiffs
consulted Garcia to perform work on the house. Garcia's estimate, dated May
A-0570-24 5 16, 2023, pertained to several projects, including bathroom remodeling, gas pipe
framing, water pipe removal, wall removal, painting of the entire house, and
carpet removal. Kushner indicated plaintiffs ultimately decided to hire Garcia
to paint the house and repair the floors and to forego additional repairs until they
moved into the home. He also claimed plaintiffs originally intended to move in
"right away," while Garcia performed the work, but, at the walk through, they
realized the floors needed work and feared their son, with a sensory sensitivity,
would be disturbed by the noise.
Garcia began working on the premises two days after the closing and
testified he installed tiles in the bathroom, painted the walls, and demolished a
wall in the dining room before the fire occurred. Kushner visited the home
occasionally to monitor the progress of Garcia's work, which Kushner indicated
took longer than estimated. Kushner also claimed Garcia "scammed" plaintiffs
by charging them an inflated cost for cabinets over the amount Garcia paid.
Plaintiffs extended their rental home lease, originally set to end on July 31, 2023,
to August 15, 2023.
Kushner contended he never misrepresented his intentions on the
insurance application, as he anticipated moving in right away until the walk
through when he realized the floors needed work. He believed Garcia could
A-0570-24 6 quickly paint and complete the floorwork, never anticipating the eventual delay.
He denies inserting the "0-30 days" statement regarding taking occupancy,
claiming "no one ever asked [him] when [he] was moving in, and [he] had no
idea it was even 'applicable' to [his] situation." Plaintiffs further disputed that
Garcia's work constituted "renovations" or that the house was "unoccupied" at
the time of the fire.
B.
Defendant moved for summary judgment alleging the policy was void on
two grounds: (1) plaintiffs violated the policy's terms because they never
"customarily occupied" the house at or before the time of the fire; and (2)
plaintiffs materially misrepresented the status of their renovations and their
intended occupancy of the house in their insurance application. Defendant
argued the policy's "clear and unambiguous" language required that plaintiffs
"customarily occupy" the premises and entitled defendant to rescind the contract
as plaintiffs admitted they did not move into or live in the home at the time it
was destroyed. Defendant further contended plaintiffs conceded they never
intended to move in immediately.
Plaintiffs countered that the phrase "customarily occupied" is ambiguous
and should be construed in plaintiffs' favor. They asserted they answered the
A-0570-24 7 questions on the insurance application truthfully and never expected "any part
of [the house] was going to ultimately be unoccupied or vacant." Further, they
contended there was no construction or renovation occurring at the time of the
application. They argued, alternatively, their intent was a disputed issue of
material fact that prevented summary judgment as to any claim of
misrepresentation.
On September 16, 2024, the court granted summary judgment, finding,
"there [we]re no genuine issues of material fact . . . as the plaintiffs were not
'customarily occupying' the subject property." The trial court cited the policy's
language, including the exclusionary clause, which stated, "We do not cover
bodily injury or property damage arising out of a covered dwelling that is not
owned and customarily occupied by you." The court relied upon Black's Law
Dictionary that defined "customarily" as "usually, habitually, according to
custom; general practice or order of things; regularly." Accordingly, the court
found the exclusionary language was "plain and unambiguous," and "no other
conclusion can be reached than the plaintiffs did not customarily occupy the
subject property."
In reaching its decision, the trial court addressed the evidence in the record
and determined "plaintiffs did not take occupancy of the property prior to the
A-0570-24 8 fire." It recognized: "[T]he plaintiffs have admitted that at no time did they
occupy the subject property. They did not live there, sleep there, or eat there.
They had no possessions other than [six] boxes which were kept in the garage
and the basement." At the time of the fire, plaintiffs were residing at the
premises they rented, pursuant to a lease agreement which they extended. There
was no power at the new residence, and the mail was delivered to the rental
address. The court cited to the May 2023 estimate for renovations plaintiffs
obtained from Garcia, and noted plaintiffs "purchased a stove on July 14, 2023,
for installation at the subject property."
The court found "defendant issued the subject policy of insurance in
reliance upon the statements contained in the insurance application." It noted,
"plaintiffs admitted that they wanted to do work on the subject property before
moving in." The court further highlighted Kushner's answering "no" to the
question, "Is the building undergoing renovation or reconstruction?"
Plaintiffs moved for reconsideration. 2 The court denied the application,
finding no basis to review its decision, but clarified its prior order "provide[d]
for recission of the policy rendering it void ab initio and further declare[d] no
2 The record does not reflect plaintiffs' precise claims before the trial court and it appears no oral argument took place. A-0570-24 9 coverage," and "both declarations [we]re proper under the circumstances." The
court explained its earlier decision "relie[d] squarely and solely on the owner -
occupancy exclusion, not the material misrepresentations in the application for
insurance." The court found that because the premises were never "customarily
occupied" and "the entire policy was issued based on that perceived condition
of coverage" the court did not "rescind the policy based on material
misrepresentation." The court noted, "to that end, the failure of plaintiffs to
disclose that the property was not owner occupied permits the defendant to void
the policy." Reasoning it could not reform the contract to change the terms or
language, the court also refused to supplement the "customarily occupied"
language to afford a "reasonable" window for occupancy or otherwise alter what
it found to be the plain meaning of the policy.
II.
Plaintiffs appeal, arguing the court erred in granting summary judgment
and denying reconsideration. They contend: (1) the phrase customarily
occupied is vague and should have been construed in a manner to further the
goal of precluding insureds from obtaining policies for rental properties at lower
premiums by misrepresenting the properties as owner-occupied residences; (2)
A-0570-24 10 construing "customarily occupied" to require owners to immediately move in,
reside, and sleep in the dwelling would lead to exclusions no matter the duration
of time between closing and taking up residency; and (3) at a minimum, a factual
dispute existed regarding the veracity of plaintiffs' answers in the insurance
application and summary judgment was thus improper.
Defendant asserts this court should decline to consider plaintiffs'
arguments concerning misrepresentation as the trial court did not grant summary
judgment or address the issues of material misrepresentation and, instead,
granted summary judgment "solely on the 'owner-occupancy' exclusion
contained in the subject policy." Consequently, according to defendant, because
"owner occupancy [wa]s an actual condition of coverage" and coverage was
expressly excluded for losses to premises not customarily occupied, the court
correctly found plaintiffs failure to fulfill this condition of coverage was
properly denied, warranting summary judgment in its favor.
"We review de novo the trial court's grant of summary judgment, applying
the same standard as the trial court." Abboud v. Nat'l Union Fire Ins., 450 N.J.
Super. 400, 406 (App. Div. 2017) (citing Templo Fuente de Vida Corp. v. Nat'l
Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016)). "To decide
A-0570-24 11 whether a genuine issue of material fact exists, the trial court must 'draw[] all
legitimate inferences from the facts in favor of the non-moving party.'"
Friedman v. Martinez, 242 N.J. 450, 472 (2020) (alteration in original) (quoting
Globe Motor Co. v. Igdalev, 225 N.J. 469, 480 (2016)). "The court's function is
not to weigh the evidence and determine the truth of the matter but to determine
whether there is a genuine issue for trial." Rios v. Meda Pharm., Inc., 247 N.J.
1, 13 (2021) (quoting Brill, 142 N.J. at 540).
We review a trial judge's decision on whether to grant or deny a motion
for reconsideration under Rule 4:49-2 for abuse of discretion. Branch v. Cream-
O-Land Dairy, 244 N.J. 567, 582 (2021). "The rule applies when the court's
decision represents a clear abuse of discretion based on plainly incorrect
reasoning or failure to consider evidence or a good reason for the court to
reconsider new information." Pressler & Verniero, Current N.J. Court Rules,
cmt. 2 on R. 4:49-2 (2026).
"The interpretation of an insurance contract typically raises questions of
law. Consequently, it is generally appropriate to resolve such questions on
summary judgment." Khandelwal v. Zurich Ins. Co., 427 N.J. Super. 577, 585
(App. Div. 2012) (citing Adron, Inc. v. Home Ins. Co., 292 N.J. Super. 463, 473
(App. Div. 1996)). In general, the principles governing the interpretation of
A-0570-24 12 insurance policies "must be analyzed under the rules of 'simple contract law.'"
Cypress Point Condo. Ass'n v. Adria Towers, L.L.C., 226 N.J. 403, 415 (2016)
(quoting Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960)). "Well-settled
contract law provides that '[c]ourts enforce contracts based on the intent of the
parties, the express terms of the contract, surrounding circumstances and the
underlying purpose of the contract.'" Id. (alterations in original) (citing
Manahawkin Convalescent v. O'Neill, 217 N.J. 99, 118 (2014)).
In determining the parties' intent, "the basic rule is to determine the
intention of the parties from the language of the policy, giving effect to all parts
so as to give a reasonable meaning to the terms." Simonetti v. Selective Ins.
Co., 372 N.J. Super. 421, 428 (App. Div. 2004) (citing Stone v. Royal Ins. Co.,
211 N.J. Super. 246, 248 (App. Div. 1986)). Importantly, "[a]s contracts of
adhesion, [insurance] policies are subject to special rules of
interpretation . . . [and] should be construed liberally in the insured's favor to
the end that coverage is afforded to the full extent that any fair interpretation
will allow." Duddy v. Gov't Emps. Ins. Co., 421 N.J. Super. 214, 218 (App.
Div. 2011) (citing Longobardi v. Chubb Ins. Co. of N.J., 121 N.J. 530, 537
(1990)).
A-0570-24 13 "Notwithstanding that premise, the words of an insurance policy should
be given their ordinary meaning, and in the absence of an ambiguity, a court
should not engage in a strained construction to support the imposition of
liability." Ibid. More specifically, "[a] policy's language that is 'direct and
ordinary' is not ambiguous when it can 'be understood without employing subtle
or legalistic distinctions,' is not 'obscured by fine print,' and does not 'require[]
strenuous study to comprehend.'" Mac Prop. Grp. LLC & The Cake Boutique
LLC v. Selective Fire and Cas. Ins. Co., 473 N.J. Super. 1, 17 (App. Div. 2022)
(quoting Zacarias v. Allstate Ins. Co., 168 N.J. 590, 601 (2001)).
"[W]hen the provision at issue is subject to more than one reasonable
interpretation, it is ambiguous, and the 'court may look to extrinsic evidence as
an aid to interpretation.'" Cypress Point Condo Ass'n, 226 N.J. at 415-16
(quoting Templo Fuente de Vida Corp., 224 N.J. at 200). However, "when
considering ambiguities and construing a policy, courts cannot 'write for the
insured a better policy of insurance than the one purchased.'" Flomerfelt v.
Cardiello, 202 N.J. 432, 441 (2010) (quoting Walker Rogge Inc. v. Chelsea Title
& Guar. Co., 116 N.J. 517, 529 (1989)). Although "the insured has the burden
'to bring the claim within the basic terms of the policy,'" S.T. Hudson Eng'rs,
Inc. v. Pa. Nat'l Mut. Cas. Co., 388 N.J. Super. 592, 602 (App. Div. 2006)
A-0570-24 14 (quoting Reliance Ins. Co. v. Armstrong World Indus., Inc., 292 N.J. Super. 365,
377 (App. Div. 1996)), if the clause is exclusionary, "the burden is on the insurer
to bring the case within the exclusion," Gibson v. Callaghan, 158 N.J. 662, 671
(1999).
C.
Against the backdrop of these guiding legal principles, we first consider
plaintiffs' argument that the trial court erred in failing to recognize the ambiguity
of the term "customarily occupied" and refusing to construe the language in
favor of plaintiffs as the insureds. Having considered the record in the light
most favorable to plaintiffs, and assessing the plain meaning of the policy's
language, we conclude the trial court reasonably found the language was
unambiguous, the policy's occupancy condition and coverage exclusion applied,
and coverage was properly denied.
The trial court consulted the policy's language as a whole, the specific
verbiage of the exclusionary clause, the Black's Law Dictionary definition of
"customarily," and this court's prior definition of that term, see Thompson v.
Potenza, 364 N.J. Super. 462, 469 (App. Div. 2003) (citing Black's Law
Dictionary (6th ed. 1990)), to conclude the term "customarily" was
unambiguous. As the trial court correctly observed, "The word 'customarily'
A-0570-24 15 means 'usually, habitually, according to custom; general practice or usual order
of things; regularly.'" Ibid. (citing Black's Law Dictionary (6th ed. 1990)). In
Thompson, we applied the definition contained in Black's Law Dictionary to an
automobile insurance contract, noting, "The [p]laintiffs' reliance on the single
statement of [the defendant] that [a van] 'could have been' used once a week
does not rise to the level of establishing a 'usual' or 'habitual' commercial use
and the van remain[ed] a personal vehicle." Ibid.; see also Charlie Brown of
Chatham, Inc. v. Bd. of Adjustment, 202 N.J. Super. 312, 324 (App. Div. 1985)
(defining "customarily" in the context of zoning regulations as "commonly,
habitually, and by long practice").
Here, the trial court similarly afforded the term its plain meaning to
modify the word "occupied." It found the plain meaning of the phrase
"customarily occupied" required plaintiffs to have actually taken up residence
in the home at the time of the loss.
For well over a century, "[we have not been] without a construction of the
words occupied and unoccupied in this state." Hampton v. Hartford Fire Ins.
Co., 65 N.J.L. 265, 266 (E. & A. 1900). Whether a structure is occupied turns
on the intended use of the structure. Ibid. "As to a dwelling-house, it being
designed for occupancy by human beings, it is occupied when human beings
A-0570-24 16 habitually reside in it, and unoccupied when no one lives or dwells in it." Id. at
268; see also Sonneborn v. Mfrs. Ins. Co., 44 N.J.L. 220, 224 (E. & A. 1882)
(holding that daily visits by owner "fell far short of what constitutes the
occupancy of a dwelling"). Further, as we have noted, "[h]omeowners' policies
may, and usually do, require the insured dwelling to be occupied as a place of
abode." Ellmex Const. Corp. v. Republic Ins. Co., 202 N.J. Super. 195, 203-04
(App. Div. 1985); see also 34 Appleman on Insurance 2d § 198.05[B][1] (2011)
(noting a house is not "occupied when furniture is moved there preparatory to
moving in personally").
Given the plain meaning of these common terms, we conclude the court
correctly found that to customarily occupy the house meant actually
commencing residence and living in it. Such interpretation did not require the
residents to be physically present at the time of the loss or necessitate they
remain there continuously without interruption, but it did require their regular,
habitual use of the property for its intended purpose—to dwell within its walls.
We are not persuaded by plaintiffs' arguments that the phrase "customarily
occupied" was too vague, or that we should graft into the clear existing verbiage
an additional term requiring that the insured "customarily occupy" the premises
within a "reasonable amount of time." Not only would this require our creating
A-0570-24 17 a better contract than the one accepted, acknowledged, and executed by
plaintiffs, it would require our overlooking the policy's designated time period
until occupancy of "0-30 days." Even affording plaintiffs the benefit of this
additional time period to commence dwelling in the home, the fire occurred after
the thirty-day window to occupy expired, and before plaintiffs ever moved into
the premises. Even in these sympathetic circumstances, we may not rewrite the
otherwise clear policy to fit the nature of the loss. Plaintiffs' proposed
interpretation of the policy stretches beyond the most elastic view of its
language.3
Having concluded the trial court correctly determined the policy language
was plain and unambiguous and required plaintiffs to actually reside in the
home, we are also satisfied the court reasonably considered the facts in their
most favorable light to plaintiffs and found plaintiffs did not show they
customarily occupied the home. Critically, plaintiffs admitted that they never
moved in. They instead extended their lease for the alternate rental home into
3 Giving the language its plain meaning, we need not address plaintiffs' assertion that the policy behind the occupancy restriction was simply to ensure the homeowners' policy was not obtained to avoid the higher cost of insuring a rental property. We note, however, the competing strong policy interest in allowing the insurer to properly assess whether or when the premises would be occupied to mitigate the risks otherwise attendant to vacant or unsupervised property. A-0570-24 18 mid-August. They conceded they were residing in that rental property where
they ate, slept, and received mail. But for a few boxes, they had not moved their
possessions or furniture into the new house, which had no power and was still
being refurbished by Garcia. Other than Kushner's occasionally checking on
Garcia's progress, plaintiffs spent no time in the home.
We note, as did the trial court, the policy's language expressly clarifying:
"it is understood that the covered dwelling is owned and customarily occupied
by you and this is a condition of hazard and use that we undertake to insure
under this policy." This language was not nebulous, particularly when
considered together with the policy's clear "exclusion" under "Losses Not
Insured," stating, "We do not provide insurance for a covered dwelling that is
not owned and customarily occupied by you." Given these critical policy terms,
the court did not err in finding defendant properly rescinded and denied
plaintiffs' claim for coverage because it issued the policy based on the
understanding that the premises would be customarily occupied and the policy
provided no coverage for loss in violation of the central condition. Thus, the
court correctly found plaintiffs' breach of contract and bad faith claims against
defendant should not proceed to trial.
A-0570-24 19 Contrary to plaintiffs' arguments, we do not believe this determination
risks a bright line rule leaving unprotected all homeowners transitioning into
their new homes, regardless of the circumstances. This case, as questions of
insurance coverage often do, turns on its individual facts and circumstances. See
Westinghouse Elec. Corp. v. Liberty Mut. Ins. Co., 233 N.J. Super. 463 478-79
(App. Div. 1989) (recognizing "coverage questions may be fact sensitive").
Here, plaintiffs' lack of actual residency and extension of their rental agreement
for alternative lodging, together with the indefinite construction period and the
empty home without electricity or utilities six weeks after closing, demonstrated
the home was never customarily occupied, including at the time of the fire, and
thus was not a covered premises under the plain terms of the contract. Nothing
about our determination on these individual facts would impede coverage for,
or place in peril, homeowners seeking to adequately insure and protect their
premises based on their own particular needs and circumstances.
We have reviewed the trial court's written decisions granting summary
judgment and denying reconsideration and reject plaintiffs' assertion that the
court based its decision on an unsupported finding that Kushner made material
misrepresentations in the policy application warranting recission of the policy.
The decisions clearly reveal the court based its determination solely on its
A-0570-24 20 conclusion that plaintiffs "did not customarily occupy the subject property" as
the policy required. Thereafter, the court's reconsideration decision removed
any arguable doubt, stating the court found the policy "void ab initio and further
declare[d] no coverage" based "squarely and solely on the owner-occupancy
exclusion, not the material misrepresentations in the application for insurance."
To the extent the court made factual observations or arguable findings
regarding plaintiffs' representations in the policy application, we are satisfied
they played no role in its decision and, accordingly, need not play any role in
ours. As we conclude coverage was correctly denied based exclusively upon
plaintiffs' failure to customarily occupy the premises, we do not address the
claims concerning misrepresentation.
Affirmed.
A-0570-24 21