ABDUL H. MUHAMMAD v. ELIZABETH YELLOW CAB INC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4197-10T2

ABDUL H. MUHAMMAD,

Plaintiff-Respondent,

v.

ELIZABETH YELLOW CAB, INC.,

a corporation or business organization,

GUY AMERIS, MARK ADJUSTMENT SERVICE,

a corporation or business organization,

ATLANTIC RISK MANAGEMENT INC.,

a corporation or business organization,

ENGLE MARTIN CLAIMS ADMINISTRATIVE

SERVICES, a corporation or business

organization, NJPLIGA, a corporation

or business organization or body

politic, NEW JERSEY PROPERTY LIABILITY

INSURANCE GUARANTY ASSOCIATION,

a corporation or business organization

or body politic, UNSATISFIED CLAIM AND

JUDGMENT FUND, a body politic,

Defendants,

and

CRAWFORD & COMPANY, a corporation or

business organization, OCEAN RISK RETENTION

GROUP, INC., a corporation or business

organization,

Defendant-Appellants.

____________________________________________

May 8, 2013

Submitted February 28, 2012 - Decided

Before Judges Fisher and Nugent.

On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-3792-08.

Bashwiner and Deer, L.L.C., attorneys for appellants (John M. Bashwiner and Joseph A. Deer, of counsel and on the brief).

Freeman and Bass, P.A., attorneys for respondent (Randall Bass, on the brief).

PER CURIAM

Defendants Ocean Risk Retention Group, Inc. (Ocean) and
Crawford & Company (Crawford) appeal from the Law Division Order

that denied their cross-motion to dismiss the count of plaintiff Abdul H. Muhammad's complaint seeking personal injury protection (PIP) benefits. In their motion, Ocean and Crawford contended that plaintiff had not filed his amended complaint against them within the limitations period contained in N.J.S.A. 33:6A-13.1, the statute of limitations for PIP claims. We agree with defendants that the court misinterpreted the statute. The court, however, did not address the issue of whether defendants were equitably estopped from asserting the statute. Accordingly, we reverse and remand for further proceedings.

I.

The parties established the following facts on the summary judgment motion record. While crossing East Broad Street in Elizabeth, plaintiff was struck by a taxi owned by defendant Elizabeth Yellow Cab, Inc. and operated by Guy Ameris. As a result of the injuries he sustained in the accident, plaintiff received medical care for which he incurred more than $30,000 in medical expenses. Plaintiff's medical expenses, which remain unpaid, are the subject of this appeal.

The taxi was insured under a "Business Auto Policy" issued by Ocean. The policy contained a "New Jersey Pedestrian Injury Protection" endorsement which provided:

We will pay Pedestrian Personal Injury Protection benefits pursuant to N.J.S.A. 17:28-1.3, which states:

Every liability insurance policy issued in this State on a motor vehicle, exclusive of an automobile as defined in [L. 1972, c. 70 2] (C.39:6A-2), but including a motorcycle, or on a motorized bicycle, insuring against loss resulting from liability imposed by law for bodily injury, death and property damage sustained by any person arising out of the ownership, operation, maintenance, or use of a motor vehicle or motorized bicycle shall provide personal injury protection coverage benefits, in accordance with [L. 1972, c. 70 4] (C.39:6A-4) to pedestrians who sustain bodily injury in the State caused by the named insured's motor vehicle or motorized bicycle or by being struck by an object propelled by or from the motorized vehicle or motorized bicycle.

The police accident report lists Ocean as Elizabeth Yellow Cab's "carrier".

The accident occurred on July 20, 2007. Although plaintiff commenced a personal injury and PIP action on November 17, 2008, he did not name Ocean and Crawford as defendants. He first identified them as defendants when he filed an amended complaint on October 29, 2009, two years and three months after the accident. Plaintiff contends, among other things, that he was "lulled . . . into the belief that his medical bills were being processed for payment." To provide the context for that argument, we recount plaintiff's dealings with Ocean and various claims administrators.

Following the accident, plaintiff retained counsel, who wrote letters on August 2, 2007 to: the New Jersey Property Liability Insurance Guaranty Association (PLIGA), enclosing a completed claim form and a copy of the police report; the cab driver, Ameris, requesting the name and address of his insurance carrier; Elizabeth Yellow Cab, requesting the name of its insurance carrier; and Ocean, requesting that it set up bodily injury and PIP files, and inform counsel that it had done so. On August 24, 2007, plaintiff's attorney again wrote to Ocean requesting that it create a bodily injury file and acknowledge same.1 Three weeks later, on September 14, 2007, a claim representative of Atlantic Risk Management, Inc. (ARM) responded to plaintiff's letters to Ocean. The representative wrote:

This letter will serve to acknowledge your representation of the above named claimants. Please note that [ARM] is adjusting this claim for [Ocean]. Please send all related correspondence concerning this claim to my attention.

I have enclosed an application for PIP benefits for your client. Please have your client execute and forward, along with treatment invoices to Mark Adjustment Services, our third-party auditor for fee-scheduling and payment authorization.

Less than two months later, on November 1, 2007, a no-fault representative of Mark Adjustment Service (MAS) advised plaintiff's counsel that she was handling the "no-fault portion" of plaintiff's claim. The representative was apparently unaware that the previous month, on October 11, 2007, plaintiff's attorney had sent to MAS plaintiff's PIP application, medical and wage authorization forms, and copies of plaintiff's medicals to be processed. Four days later a different MAS no-fault representative wrote to one of plaintiff's medical providers explaining why it could not process its claim. Specifically, the representative stated she had not received either an Affidavit of No Insurance or a narrative report concerning plaintiff's injuries. By November 27, 2007, plaintiff had forwarded to MAS additional medical bills and an Affidavit of No Insurance. When the bills were not paid by March 27, 2008, plaintiff's counsel mailed another set to MAS. MAS's ledger notes, which were produced after plaintiff filed a lawsuit, noted that MAS representatives contacted at least two of plaintiff's medical providers. MAS paid none of plaintiff's bills before closing its file.

Seven months later, on June 18, 2008, MAS closed its file. The reason is unclear. The "Closing Report" noted, among other things, that plaintiff had last received treatment on February 18, 2008.

Four months after MAS closed its file, on October 6, 2008, Engle Martin Claims Administrative Services (EMCAS) wrote to plaintiff's attorney and identified themselves as "the third party claims administrators for the above client." The claims specialist who wrote the letter requested information about plaintiff's claim.

On November 17, 2008, plaintiff filed a two-count complaint seeking compensation from Ameris and Elizabeth Yellow Cab for the injuries he sustained in the accident (first count), and personal injury protection benefits (second count). Although he alleged that MAS, ARM, and a fictitiously pleaded "Alpha Insurance Company" were liable for his PIP benefits, he did not include Ocean as a defendant.

The record of the trial court proceedings is somewhat scant. It appears that plaintiff filed a motion on September 24, 2009, concerning payment of his medical expenses. On that same day, plaintiff's attorney wrote to the claims manager at Crawford enclosing a motion.2 On October 5, 2009, the claims manager responded in writing and represented that he had set up a PIP file and "sent bills for compliance review." The claims adjuster specifically requested: "Please advise if you can discontinue motion since we have set up PIP file for Ocean." Thereafter, plaintiff's attorney sent the claims manager plaintiff's medical bills, and the manager responded that he had already received them and they were being processed.

On October 29, 2009, plaintiff filed a First Amended Complaint and Jury Demand in which he added EMCAS, Crawford, and Ocean as defendants. Plaintiff's accident had occurred two years and three months earlier.

Plaintiff had named PLIGA as a defendant in both his original and his amended complaint. On June 22, 2010, in response to an inquiry from plaintiff's attorney, PLIGA's counsel stated that it had requested the policy insuring the Elizabeth Yellow Cab involved in the accident, and received a representation from the cab company's counsel that PIP coverage was available to plaintiff. In the same letter, PLIGA's attorney requested that counsel for Elizabeth Yellow Cab produce a copy of the insurance policy. Having received the policy by August 11, 2010, PLIGA's counsel notified the other parties of her position that Ocean "would provide PIP benefits to plaintiff in this matter."

Trial was scheduled for January 26, 2011. With respect to the PIP claim, the parties agreed to take plaintiff's testimony and then file cross-motions for summary judgment. The court agreed to proceed in that manner.

Following oral argument on the cross-motions for summary judgment, the court issued a written decision. The court granted plaintiff's motion and denied defendants' cross-motion. After recounting the facts, the court explained:

Ocean Risk and Crawford assert that plaintiff's complaint should be dismissed because the statute of limitations has purportedly expired. The statute of limitations for claims for PIP coverage states, in pertinent part:

Every action for the payment of benefits payable under a standard automobile insurance policy . . . shall be commenced not later than two years after the injured person or survivor suffers a loss or incurs an expense and either knows or in the exercise of reasonable diligence should know that the loss or expense was caused by the accident.

N.J.S.A. 39:6A-13.3 (emphasis added). According to plaintiff's submissions, plaintiff last incurred a medical expense in this matter on February 19, 2008. Plaintiff filed its Second Amended Complaint, naming [Ocean] and Crawford as defendants in this matter, on October 29, 2009, well within the two year limitations period. Ocean Risk and Crawford's argument on this point therefore fails.

The court entered a confirming order from which plaintiff appealed.

II.

The trial court resolved the PIP count of plaintiff's complaint on cross-motions for summary judgment. A trial court must grant a summary judgment motion if "the pleadings, depositions, answers to interrogatories and admissions on file, together with 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, 529-30 (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). If the evidence submitted on the motion "'is so one-sided that one party must prevail as a matter of law,' the trial court should not hesitate to grant summary judgment." Brill, supra, 142 N.J. at 540 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214, (1986)).

When a party appeals from a trial court order granting or denying a summary judgment motion, we "'employ the same standard [of review] that governs the trial court.'" Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010) (quoting Busciglio v. DellaFave, 366 N.J. Super. 135, 139 (App. Div. 2004)). Thus, we must determine whether there was a genuine issue of material fact, and if not, whether the trial court's ruling on the law was correct. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We review legal conclusions de novo. Henry, supra, 204 N.J. at 330.

N.J.S.A. 39:6A-13.1, provides in pertinent part:

a. Every action for the payment of benefits payable under a standard automobile insurance policy pursuant to [L. 1972, c. 70, 4, 10] (C. 39:6A-4 and 39:6A-10), medical expense benefits payable under a basic automobile insurance policy pursuant to [L. 1998, c. 21, 4] (C. 39:6A-3.1) or benefits payable under a special automobile insurance policy pursuant to [L. 2003, c. 89, 45] (C. 39:6A-3.3), except an action by a decedent's estate, shall be commenced not later than two years after the injured person or survivor suffers a loss or incurs an expense and either knows or in the exercise of reasonable diligence should know that the loss or expense was caused by the accident, or not later than four years after the accident whichever is earlier, provided, however, that if benefits have been paid before then an action for further benefits may be commenced not later than two years after the last payment of benefits.

The trial court interpreted the statute to mean that the two-year limitations period begins to run from the date of the last medical expense incurred by a plaintiff. That interpretation is incorrect. The statute requires an injured plaintiff to commence a PIP action within two years of the injury or first medical expense. Ochs v. Fed. Ins. Co., 90 N.J. 108, 113-114 (1982); Danilla v. Leatherby Ins. Co., 168 N.J. Super. 515, 518-19 (App. Div. 1979). If a carrier has made PIP payments, however, then the statute begins to run when the last payment is made.

It is clear that the statute contemplates two quite distinct situations having distinct limitations consequences. The first is that in which the PIP carrier has never made a PIP payment, either because not called upon to do so within the statutory period or because it has declined to do so on some basis perceived by it as justifying its rejection of the claim. That portion of the statute has been recently construed by the Supreme Court in [Ochs, supra, 90 N.J. at 108], as time-barring an action for PIP payments if it is not commenced within the two year period after the date of the accident or after the date on which the insured became aware that his injuries were related to the accident. If the insured is excused from bringing the action within two years after the accident by reason of the statute's incorporation of the "discovery rule" alternative, the action will in any case be barred if not commenced with four years after the date of the accident.

The other situation addressed by the statute is that in which benefits have been paid by the carrier. Where payment has been made, the insured is free to bring an action for additional benefits within two years after the last payment, irrespective of the length of time which may have elapsed between that date and the date of the accident. Thus, the fact of payment has the capacity of taking the claim out of the basic two-year/four-year limitation of the statute altogether.

[Zupo v. CNA Ins. Co., 193 N.J. Super. 374, 379-80 (App. Div.), aff'd, as modified, 98 N.J. 30 (1984).]

Ocean paid no benefits. Plaintiff did not commence a PIP action against Ocean and Crawford until he filed his amended complaint more than two years after he was injured and incurred his first medical expense. Plaintiff has not argued that the allegations he made in his amended complaint against Ocean and Crawford relate back to his original complaint. Under those circumstances, Ochs and Danilla would ordinarily require the dismissal with prejudice of his complaint.

Plaintiff contends, however, that Ochs and Danilla did not involve "[c]oncepts of constructive notice on an insurance company and dilatory conduct by an insurance company[.]" Plaintiff asks, rhetorically, why Crawford would be entitled to a statute of limitation defense when it did not timely disclose its identity and when it represented that "the bills [were] still under investigation, being fee scheduled, and being reviewed for compliance more than [two] years after the [p]laintiff's accident?" Plaintiff argues that Ocean's and Crawford's dilatory conduct distinguish the facts of this case from those in Ochs and Danilla.

Plaintiff suggests, in effect, that Ocean and Crawford are equitably estopped from asserting the statute-of-limitations defense. Because the record before us is not sufficiently developed to permit us to resolve plaintiff's equitable estoppel claim, and because the trial court did not address the argument in its opinion, we remand this matter for resolution of the equitable estoppel issue.3

Ocean's policy provided PIP coverage in accordance with N.J.S.A. 39:6A-4, which requires coverage for PIP benefits, including medical expense benefits. N.J.S.A. 39:6A-4(a). N.J.S.A. 39:6A-5(g) requires that PIP benefits pursuant to N.J.S.A. 39:6A-4 are overdue if a carrier does not pay them within sixty days of receiving written notice of the expense, unless the insurer notifies the claimant in writing of the denial of the claim or the need for additional time to investigate. "We have repeatedly stated that the 'no fault' law was established by the Legislature to ensure 'prompt payment of medical expenses, lost wages, essential services, survivor benefits and funeral expenses . . . without having to await the outcome of protracted litigation'" Kowaleski v. Allstate Ins. Co., 238 N.J. Super. 210, 216-217 (App. Div. 1990) (quoting Hoglin v. Nationwide Mut. Ins. Co., 144 N.J. Super. 475, 479 (App. Div. 1976)).

Here, there is no evidence that Ocean or Crawford notified plaintiff either that his claim was being denied, or that additional time was needed to investigate his medical expense claims. Rather, there is little evidence that Ocean or its third party administrators did anything to process plaintiff's claims, despite informing plaintiff, implicitly and explicitly, that the claims either would be or were being processed. Significantly, after plaintiff filed suit and amended his complaint to name Ocean and Crawford as defendants, Crawford dissuaded plaintiff from pursuing a motion concerning PIP benefits by representing that it was processing his claim. Those circumstances raise the question of whether Ocean and Crawford should be equitably estopped from asserting the statute-of-limitations defense. Cf. Rivera v. Prudential Property & Cas. Ins. Co. 104 N.J. 32, 39 (1986) (explaining that absent wrong or misleading or dilatory conduct on the part of a defendant, "there is no room for the application of equitable principles in a statute-of-limitations case").

Here, there is evidence of misleading or dilatory conduct on the part of Ocean and Crawford. Consequently, plaintiff is entitled to have the trial court consider the doctrine of equitable estoppel on a fully developed record.

We reverse the trial court's decision that the statute of limitations did not begin to run until after plaintiff incurred his last medical expense and remand for a determination as to whether the doctrine of equitable estoppel bars defendants from asserting the statute of limitations.

Reversed and remanded.

1 Plaintiff's counsel also continued to correspond with PLIGA. Those communications are not relevant to the issues raised in this appeal.

2 The motion is neither described nor included in the record before us.

3 The record before us does not clearly establish either that plaintiff did, or did not, raise his equitable estoppel argument before the trial court. Nevertheless, plaintiff prevailed on his summary judgment motion before the trial court. The trial court may not have addressed the equitable estoppel either because of the court's conclusion that the statute of limitations did not apply, or because the issue was not raised. In any event, the parties should be afforded the opportunity to have the matter resolved in the first instance by the trial court.