ROSE NEWMAN et al. v. EUGENE NEWMAN

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6709-03T36709-03T3

ROSE NEWMAN and JACK NEWMAN,

ADMINISTRATOR OF ESTATE OF

EUGENE NEWMAN,

Plaintiffs-Appellants,

v.

HEALTH EXTRAS and SKLOVER GROUP,

Defendants-Respondents,

and

RELIANCE NATIONAL INSURANCE COMPANY

and CHUBB GROUP OF INSURANCE COMPANIES

OF NEW JERSEY,

Defendants.

__________________________________________

 

Argued: June 7, 2005 - Decided May 4, 2006

Before Judges Kestin, Fuentes and Eichen.

On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Hudson County, L-3533-03.

Barbara L. Newman argued the cause for appellants.

John R. Middleton, Jr., argued the cause for respondent Sklover Group, Inc. (Lowenstein Sandler, attorneys; David L. Harris, of counsel; Mr. Middleton, on the brief).

John M. Bowens argued the cause for respondent Health Extras (Purcell, Ries, Shannon, Mulcahy & O'Neill, attorneys; Mr. Bowens, on the brief).

PER CURIAM

This is one of two simultaneously pending appeals with a common factual element, the death of Eugene Newman. This matter arises from a claim under a "$l,000,000 Catastrophic Injury and Disability Benefit" insurance policy (the policy) sold by Health Extras, an entity administered by The Sklover Group, Inc. (Sklover). The policy was issued by Reliance National Insurance Company (Reliance), and was allegedly underwritten by the Chubb Group of Insurance Companies (Chubb).

The issues came before the trial court on cross-motions for summary judgment. Judge Antonin heard oral argument on June 25, 2004. Reliance was in bankruptcy; the claims against it had been administratively dismissed in January 2004. Plaintiffs had expressed a willingness to dismiss their claims against Chubb, and the court issued a "with prejudice" dismissal order accordingly. After entertaining the remaining parties' arguments, Judge Antonin, in orders entered that day, granted the summary judgment motions of Health Extras and Sklover, and denied plaintiffs' cross-motion. Plaintiffs appeal.

The policy established a $1 million disability benefit. One advertisement had declared that an insured could "receive $1,000,000 tax-free if you're ever totally disabled and can't work." Another advertisement had stated that "[h]ealth insurance pays your medical bills. Life insurance pays your beneficiaries. But what if you're permanently disabled in an accident and can't work?" The policy was depicted as providing "additional financial security most other forms of insurance probably don't provide."

In April 1999, decedent, then seventy-six years of age, was attracted by a television advertisement of the policy and decided to purchase it. Although the policy provided that it would only cover individuals between the ages of eighteen and sixty-five, decedent nevertheless applied for it, and agreed to pay an annual premium of $88. Subsequently, in a letter dated July 16, 1999, Health Extras notified him that "the age limitation for the Disability Benefit has been extended to age 85. Your Disability Benefit is as follows: . . . 76-85 years $500,000[.]"

According to the terms of the policy, the total disability benefit was available if the insured demonstrated his or her "inability to perform the material and substantial duties of any occupation or attend to any business of any and every kind for which the [insured] is or can be reasonably fitted by education, training, or experience." To collect on a claim, the insured had to prove that the total disability resulted from an accident while the policy was in effect; that the disability had "commence[d] within 365 days from the date of the accident causing [the] injury;" that the disability had "continued without interruption, for at least a year;" and that the injury had "result[ed] in the entire and irrecoverable loss of the use of [one or both hands or feet,] or the sight of both eyes[,] or the hearing of both ears[,] or the ability to speak." The policy did not mention death as an occurrence for which benefits were payable under the policy, but it did contain an exclusion for "suicide or any attempt at it."

Decedent's coverage was effective on May 1, 1999. The Certificate of Coverage identified decedent's policy as a one million dollar "Catastrophic Injury and Disability Benefit." In April 2000, decedent renewed his coverage.

Decedent died on November 22, 2000, as the result of a criminal assault. Plaintiffs filed a claim to collect benefits under the policy. Health Extras declined to pay, explaining that the policy did not cover accidental death. Further communication elicited a position from Health Extras in a letter dated January 10, 2001, that the policy "provides benefits if a covered person becomes totally disabled as a result of an accident. There are no death benefits[.]" Health Extras stated also: "There is no Accidental Death and Dismemberment Benefit for this coverage." Thus, coverage was denied and Health Extras tendered $75.50 as a refund of the prorated portion of decedent's prepaid premium from November 1, 2000 to the end of the policy year.

Plaintiffs returned the refunded portion of the prepaid premium, claiming that because the policy contained an exclusion for suicide, the policy "recognizes death as the ultimate disability." In further correspondence dated January 30, 2001, Health Extras stated that decedent had obtained coverage under the "Catastrophic Injury and Disability Benefit program effective May 1, 1999," that the policy was terminated upon decedent's death, and that the particular policy "did not provide benefits for accidental death or disability." Health Extras also explained that it had not offered decedent a different policy with an Accidental Death and Dismemberment benefit because of "enrollment restrictions."

This suit followed. Plaintiffs' claim was set forth in a six-count complaint that alleged breach of contract, breach of the implied covenant of good faith and fair dealing, common law fraud and misrepresentation, consumer fraud, and age discrimination.

Judge Antonin granted summary judgment to defendants on the basis that there was no support in law for the proposition that a disability policy conditioned upon catastrophic injury could be converted to a death policy solely because the death resulted from a catastrophic injury. Moreover, the judge held, the policy decedent had purchased manifestly provided a disability benefit, and therefore did not need to include an express exclusion for death, even in the face of the expressly provided suicide exclusion. Judge Antonin concluded that the language of the policy was "plain . . . , it is clear. The Court finds no ambiguities whatsoever in it." She ruled that decedent could not reasonably have expected that he had purchased a death benefit under this disability policy.

Plaintiffs' arguments on appeal focus entirely on the trial court's construction of the insurance contract as excluding a death benefit, and they challenge the trial court's view regarding the "objectively reasonable expectations of the insured."

In their reply brief on appeal, plaintiffs argue for the first time that the court also erred in dismissing the age discrimination claim in count six of the complaint without offering any legal support or in-depth analysis. That issue was not specifically raised during the oral argument before Judge Antonin, and therefore need not be addressed on appeal. See Nieder v. Royal Indemn. Ins. Co., 62 N.J. 229, 234 (1973). Moreover, an issue raised for the first time in a reply brief will, typically, not be considered on appeal. See A.D. v. Morris Cty. Bd. of Soc. Servs., 353 N.J. Super. 26, 30 (App. Div. 2002). Nevertheless, we discern no error or analytical shortcoming in Judge Antonin's conclusion that there is "no legal authority . . . that the insurance company was without the legal right and authority to change the terms of the insurance contract" in respect of the amount of coverage.

The issues before the trial court were manifestly suited to resolution on summary judgment. See R. 4:46-2. There was no dispute of fact. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). We are in substantial agreement with Judge Antonin's decisional rationale.

As a general proposition, the words of an insurance policy should be given their ordinary, plain meaning. See Benjamin Moore & Co. v. Aetna Cas. & Sur. Co., 179 N.J. 87, 102 (2004); Harleysville Ins. Cos. v. Garitta, 170 N.J. 223, 231 (2001); Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001). When there is doubt as to whether coverage exists under a policy, "that doubt is ordinarily resolved in favor of the insured." Benjamin Moore, supra, 179 N.J. at 102. However, "in the absence of ambiguity, a court should not engage in a strained construction to support the imposition of liability." Longobardi v. Chubb Ins. Co. of New Jersey, 121 N.J. 530, 537 (1990). Accord, Zacarias, supra, 168 N.J. at 597. Thus, "[a]lthough courts should construe insurance policies in favor of the insured, 'they should not write for the insured a better policy of insurance than the one purchased.'" Longobardi, supra, 121 N.J. at 537 (quoting Walker Rogge, Inc. v. Chelsea Title & Guar. Co., 116 N.J. 517, 529 (1989)). Accord, Gibson v. Callaghan, 158 N.J. 662, 670 (1999). "[W]hen the language of the policy is clear, the court is bound to enforce its terms as they are written . . . so as to fulfill the objectively reasonable expectations of the parties to the contract." Scarfi v. Aetna Cas. & Sur. Co., 233 N.J. Super. 509, 514 (App. Div. 1989) (citations omitted).

"In exceptional circumstances," however, "even an unambiguous contract has been interpreted contrary to its plain meaning so as to fulfill the reasonable expectations of the insured." Gibson, supra, 158 N.J. at 671 (quoting Werner Indus., Inc. v. First State Ins. Co., 112 N.J. 30, 35-36 (1988)). Accord, Zacarias, supra, 168 N.J. at 595 (quoting Sparks v. St. Paul Ins. Co., 100 N.J. 325, 338-39 (1985)); Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 175 (1992). We agree with Judge Antonin, given the plain language of the policy, that decedent could not reasonably have expected coverage in the circumstances presented. Thus, this is not one of the exceptional circumstances that could result in an interpretation of the policy contrary to its clear language.

A "genuine ambiguity exists 'when the phrasing of the policy is so confusing that the average policyholder cannot make out the boundaries of coverage.'" Rosario v. Haywood, 351 N.J. Super. 521, 530 (App. Div. 2002) (quoting Lee v. General Accident Ins. Co., 337 N.J. Super. 509, 513 (App. Div. 2001)). "An insurance policy is not ambiguous merely because two conflicting interpretations of it are suggested by the litigants." Id. at 531 (quoting Powell v. Alemaz, Inc., 335 N.J. Super. 33, 44 (App. Div. 2000)). "[N]ot every far-fetched interpretation of a policy will be sufficient to create an ambiguity requiring coverage." Ibid. (quoting Boddy v. Cigna Prop. & Cas. Co., 334 N.J. Super. 649, 658 (App. Div. 2000)).

We reject plaintiffs' reading of selected cases from other jurisdictions as having any true bearing on the issues presented in this matter. We agree with Judge Antonin that no basis exists in "the language in the policy nor any rule of court, statute or case law" to support the position plaintiffs have advanced. The policy unambiguously provided disability benefits, not death benefits. The presence of the suicide exclusion does not lead us to a different conclusion. Decedent could not reasonably have expected that he had purchased a death benefit, especially in the light of the plain sense of the term that required a total disability caused by an accident to continue without interruption for at least one year before benefits would even be available.

The policy was entitled "Catastrophic Injury and Disability Benefit." It spoke only of coverage for a total disability caused by accident; there was no mention in the policy of a death benefit. Moreover, the insured was required to produce proof of a total disability resulting from an injury caused by an accident that "continued, without interruption, for at least a year." Here, if decedent had become disabled at all, it was only for a short period following the assault and before his death. Whatever disability ensued, therefore, did not continue without interruption for the required year. Thus, the policy benefit was properly denied for this reason alone.

We reject, as entirely too glib, see In re Marriage of Bertrand, 39 Cal. Rptr. 2d 151, 152 (Ct. App. 3d Dist. 1995), the notions advanced by plaintiffs that death is the "ultimate disability," and that since decedent died, he had permanently lost the use of his limbs, eyes and ears. Clearly, by its unambiguous terms, the policy was designed to provide a benefit to a disabled person who survived the one-year qualifying period, not one who had died in the interim. Plaintiffs' argument would essentially result in the conversion of a total disability policy to a death policy. In the face of the clear language and circumstances before us, we will not construe for the insured a better policy than the one purchased. In addition to other considerations, it seems obvious that a higher premium would have been charged for a policy insuring one's life rather than against total disability from an accident.

Affirmed.

 

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A-6709-03T3

May 4, 2006