ONE BEACON INSURANCE GROUP v. LAKEESHA BROWNLEE

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5039-04T25039-04T2

ONE BEACON INSURANCE GROUP,

Plaintiff-Appellant,

v.

LAKEESHA BROWNLEE,

Defendant-Respondent.

______________________________

 

Argued May 1, 2006 - Decided August 1, 2006

Before Judges Lintner and Gilroy.

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-1101-04.

Jeanine D. Clark argued the cause for appellant (Margolis Edelstein, attorneys; Colleen M. Ready, on the brief).

Stephen W. Guice argued the cause for respondent (Stephen Guice, attorneys; Mr. Guice, on the brief).

PER CURIAM

This is a declaratory judgment action. Plaintiff, One Beacon Insurance Group, appeals from an order of the Law Division entered on April 15, 2005, denying its motion for summary judgment and directing that the claim of defendant, Lakeesha Brownlee, for underinsured motorist (UIM) benefits, proceed pursuant to the terms of plaintiff's insurance policy as if it had been in effect at the time of the accident. We affirm.

We briefly recite the combined procedural history and facts which are mostly undisputed. Defendant was the owner of an automobile insured by plaintiff that provided third-party liability insurance coverage of $100,000 per person and $300,000 per accident, first-party UIM coverages in the same amounts, and first-party personal injury protection (PIP) benefits. Plaintiff issued a renewal of the policy covering the period from August 8, 2000, to February 8, 2001. On August 11, 2000, plaintiff mailed a notice of cancellation dated August 10, 2000, to defendant advising that "[w]e have not received your payment. Your coverage will end at 12: 01 A.M. on 08/30/00 unless we receive full payment before then."

On August 31, 2000, defendant was a passenger in a motor vehicle operated by Jermaine Hinds, that was struck by a motor vehicle, operated by Anthony Brown and owned by Enterprise Leasing (jointly referred to as the tortfeasor), that failed to stop for a stop sign at an intersection. The tortfeasor's motor vehicle was insured for liability coverage with limits of $15,000 per person and $30,000 per accident. Defendant asserted a personal injury claim against the tortfeasor, and forwarded a written notice to plaintiff on September 8, 2000, advising of the accident and of potential uninsured motorist (UM) and UIM claims. On September 11, 2000, defendant submitted a completed application for PIP benefits. Between the date of the accident and January 31, 2002, defendant incurred $11,805.40 in medical expenses that were authorized, approved, and paid by plaintiff under the PIP provision of the policy.

Following defendant's discharge from medical treatment, defendant received an offer to settle her personal injury claim from the insurance carrier for the tortfeasor in the amount of $15,000. On August 16, 2002, defendant's attorney issued a Longworth letter to plaintiff, advising of the offer of settlement from the tortfeasor's insurer and requesting advice whether the plaintiff desired to pursue its right of subrogation. On August 23, 2002, defendant's attorney issued a letter to plaintiff's adjustor confirming a telephone conference between them during which the adjuster had advised that because the Statute of Limitations was about to run, plaintiff's in-house counsel would file a complaint against the tortfeasor. Defendant's counsel also forwarded a second letter the same date stating "[w]e believe this claim is now ready for settlement under the [UIM] portion of your insured's policy" and suggesting settlement "without the need for further litigation" for "$175,000.00." Under cover of the second letter, defendant's counsel forwarded information supporting defendant's UIM claim.

After defendant's counsel received advice on August 30, 2002, that plaintiff neither completed its asset check on the tortfeasor, nor filed a complaint against the tortfeasor, defendant instituted suit against the tortfeasor, and made a demand for arbitration of her UIM claim under the insurance policy. On December 20, 2002, two and one-half years post-accident, plaintiff advised defendant that her policy had been cancelled for non-payment and that it had denied coverage of her UIM claim. Written confirmation of the denial was forwarded by plaintiff to defendant's counsel on January 20, 2003.

On or about February 13, 2004, following defendant's unanswered demands for proof of cancellation of the insurance policy and threat of legal action, plaintiff filed its verified complaint seeking an order "[b]arring the claim of defendant, Lakeesha Brownlee, for any benefits arising out of the August 31, 2000 motor vehicle accident, against plaintiff, One Beacon Insurance Group." On March 9, 2004, the Law Division entered an order, directing defendant to appear on April 23, 2004, and show cause "why a judgment should not be entered in favor of One Beacon Insurance Group, finding that the insurance policy was properly cancelled for non-payment of premium." On April 13, 2004, defendant moved on short notice for an order compelling plaintiff to provide UIM benefits and nominate an arbitrator. On April 23, 2004, the motion judge denied both parties' requested relief, determining that there were factual issues to be resolved concerning the cancellation of the insurance policy.

Following an administrative dismissal and restoration of the complaint pursuant to Rule 1:13-7(a), defendant filed her answer to the complaint, and asserted a counterclaim against plaintiff "to compel One Beacon to honor [its] contract of insurance and provide insurance benefits, which One Beacon has failed to honor only by virtue of bad faith claim handling practices." On or about February 21, 2005, plaintiff moved for summary judgment on its complaint. After hearing argument on the motion on April 1, 2005, and April 15, 2005, Judge Kassel denied plaintiff's motion, and directed that defendant's claim for UIM benefits proceed pursuant to the terms of plaintiff's policy "as if same had been in effect at time of [the] accident," and that plaintiff appoint an arbitrator within forty-five days of date of the order, April 15, 2005.

Two issues were presented on the motion for summary judgment: 1) whether the insurer served proper notice of cancellation of the insurance policy pursuant to N.J.S.A. 17:29C-10; and 2) whether the insurer was estopped from denying coverage by its failure to disclaim coverage for more than two years after receipt of notice of a possible claim and payment of benefits under the policy to defendant. Relying on this court's decision in Barrett v. New Jersey Manufacturers Insurance Co., 295 N.J. Super. 613 (App. Div. 1996), certif. denied, 150 N.J. 29 (1997), Judge Kassel determined that plaintiff was estopped from denying UIM coverage, and denied the motion and granted plaintiff affirmative relief.

I find the estoppel argument to be compelling . . . .

Where after two and a half years of paying first[-]party coverage, thousands of dollars of PIP benefits, it then becomes too late for the carrier to do a complete 180, particularly when they had the information, until this day, they have [not] explained why it is that in the two and a half [year] period, all somebody had to do at One Beacon, and I know it [is a] big company and people do [not] necessarily do [not] always run the computer every day to double check to make sure whether or not we should be disclaiming coverage on this case, but the simple fact of the matter is, is that at any point in time, after they got notice of this claim, they could [have,] and they should have, and presumably they do in most cases, check to see was the policy in effect when this accident happened . . . .

And I [am] bound by the Appellate Division case law, both the letter of the law, particularly when they [are] four square on point, but also the spirit of the law.

Although not critical to his decision, the judge also addressed the issue of cancellation:

Let me say this. To the extent that it [is] relevant, I find that the proofs of One Beacon, concerning proof of service, are insufficient. They decided to go through the regular mail route[,] rather than the certified mail route[,] and the certification does not appear to be certified by anybody.

On appeal, plaintiff argues that the motion judge erred in denying its motion for summary judgment, and granting affirmative relief to defendant contending it had properly cancelled defendant's policy of automobile insurance for non-payment.

A trial court will grant summary judgment to the moving party "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 a judgment or order as a matter of law." R. 4:46-2(c); see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). "An issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact." R. 4:46-2(c).

On appeal, "the propriety of the trial court's order is a legal, not a factual, question." Pressler, Current N.J. Court Rules, comment 3.2.1 on R. 2:10-2 (2006). "We employ the same standard that governs trial courts in reviewing summary judgment orders." Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

We have considered the argument advanced by plaintiff in light of the record below, and find that the argument is without sufficient merit to warrant an extended discussion in a written opinion. We affirm the summary judgment order for the reasons stated by Judge Kassel in his well-reasoned decision of April 15, 2005. R. 2:11-3(e)(1)(A) & (E). We concur with the motion judge's determination that plaintiff was estopped from denying coverage because of its unreasonable delay in disclaiming coverage after it had paid defendant PIP benefits under the same policy over a period of two years post-accident. Barrett, supra, 295 N.J. Super. at 618-19. We also agree with the judge's determination that plaintiff's proofs of mailing of the notice of cancellation to defendant, under N.J.S.A. 17:29C-10, fell short of the standard required under the law. Valley Nat'l Bancorp. v. Am. Motorists Ins. Co., 316 N.J. Super. 152, 158-59 (App. Div. 1998); Hodges v. Pa. Nat'l Ins. Co., 260 N.J. Super. 217, 222-23 (App. Div. 1992).

Affirmed.

 

 

We were advised at time of oral argument that an order was entered in the Law Division on November 14, 2005, dismissing the action, thereby rendering the order of April 15, 2005, final for purpose of appeal.

Longworth v. Van Houten, 223 N.J. Super. 174 (App. Div. 1988).

(continued)

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9

A-5039-04T2

August 1, 2006