JESSY SUERO v. JENNIFER GABLE-SCHMIDT

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

JESSY SUERO, through

his guardian, FRANCISCO

SUERO,

Plaintiff,

and

FRANCISCO SUERO,

individually,

Plaintiff-Respondent,

v.

JENNIFER GABLE-SCHMIDT,

Defendant-Appellant,

and

KENNETH C. SCHMIDT,

Defendant.

_________________________________________

November 24, 2015

Argued October 26, 2015 Decided

Before Judges Messano and Carroll.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-0832-12.

Thomas W. Matthews argued the cause for appellant (Soriano, Henkel, Biehl & Matthews, attorneys; Mr. Matthews, on the brief).

Mark C. G. Lawrence argued the cause for respondent (Forman, Cardonsky & Lawrence, attorneys; Mr. Lawrence, on the brief).

PER CURIAM

On January 13, 2010, plaintiff Francisco Suero was driving with his minor son as a passenger when his vehicle was rear-ended by a car driven by defendant Jennifer Gable-Schmidt and owned by Kenneth C. Schmidt.1 Plaintiff commenced suit individually and as guardian ad litem for his son on February 3, 2012, after the applicable statute of limitations had expired. See N.J.S.A. 2A:14-2 (requiring every action seeking damages for personal injuries to be commenced within two years of the accrual of the cause of action). Defendant answered and asserted the statute of limitations (SOL) as a defense. Defendant's first motion to dismiss the complaint as time-barred was denied without prejudice. The judge reasoned that discovery "pertinent to the statute of limitations issue" was appropriate. Several months later, defendant filed a second motion.2

The motion record reveals that on January 27, 2010, two weeks after the accident, plaintiff's counsel sent a letter of representation to defendant's insurer, State Farm Insurance Company (State Farm). Counsel stated that he would "forward all medical reports and bills to [State Farm] as soon as the name of the adjuster on th[e] file bec[ame] available to [him]." He also enclosed a copy of the police report of the accident.

On February 15, 2010, State Farm acknowledged receipt of the letter and indicated that it was conducting an investigation. State Farm further indicated that any "settlement offer or denial" was subject to an "internal appeals process," which the letter described. In a separate letter of the same date, State Farm requested that plaintiff's counsel supply a list of all treating medical providers, some information regarding plaintiff's insurance policy and a completed medical authorization form. On February 22, plaintiff's counsel forwarded a completed medical authorization but thereafter supplied no further information or otherwise corresponded with State Farm.

In his deposition, plaintiff's counsel testified that he did not believe any further information was necessary, since in his extensive experience negotiating claims with State Farm, the insurer would use the medical authorization form to obtain whatever medical records were needed. In opposing defendant's motion, counsel certified that he had spoken to State Farm's adjuster in Fall 2011. As a result, counsel "believed . . . the case was still being investigated as previously represented . . . in the original correspondence received and . . . [the adjuster] was simply updating the medical specials to review recent treatment of [plaintiff]." However, in his deposition, counsel acknowledged that he could not recall how many telephone conversations he had with individuals at State Farm, nor could he specifically recall who he spoke to. After the SOL had expired, counsel called State Farm to "find out why [he] didn't get [his] offer[,]" and was told for the first time that State Farm would not make any payment on the claim.

A different judge considered defendant's second motion. She concluded that State Farm suffered no prejudice from plaintiff's minimally-late-filed complaint because it was already on notice of the claim and was defending a suit filed by another claimant. "[B]alanc[ing] the equities between the parties," the judge denied defendant's motion. The judge entered a conforming order on June 21, 2013, and this appeal followed.3

The issue before us is straightforward. Defendant argues that State Farm's correspondence and conduct did not "lull[]" plaintiff into believing the case would be settled so as to estop defendant from asserting the SOL as a defense. Defendant further points to plaintiff's counsel's conscious decision to provide no information during the entire two-year period, save a police report and an executed medical authorization, and argues that plaintiff was not entitled to equitable relief. We agree.

We begin by noting that "[w]hether a particular cause of action is barred by a statute of limitations is determined by a judge rather than a jury." Estate of Hainthaler v. Zurich Commercial Ins., 387 N.J. Super. 318, 325 (App. Div.), certif. denied, 188 N.J. 577 (2006). Since "[t]he judge's determination of the legal consequences of established facts is not due any special deference from us," we review the judge's decision in this case de novo. Ibid.

We have said that in the first instance, "the claimant bears the burden of filing within the statute of limitations." Cruz-Diaz v. Hendricks, 409 N.J. Super. 268, 279 (App. Div. 2009). "The primary purpose of the statute of limitations is to provide defendants a fair opportunity to defend and to prevent plaintiffs from litigating stale claims." Price v. N.J. Mfrs. Ins. Co., 182 N.J. 519, 524 (2005) (quoting W.V. Pangborne & Co., Inc. v. New Jersey Dep't of Transp., 116 N.J. 543, 563 (1989)). "Consistent with that purpose, 'where defendants are on notice of the claims, and no significant prejudice results, the policy reasons for upholding a strict statute of limitations recede.'" Ibid. (quoting Pangborne, supra, 116 N.J. at 563). Our courts have therefore applied "equitable principles" to "avoid harsh results from a mechanical application of the [SOL]." Ibid.

However, "the doctrine of equitable tolling of limitations periods has been applied only in narrowly-defined circumstances." R.A.C. v. P.J.S., Jr., 192 N.J. 81, 100 (2007) (citing Price, supra, 182 N.J. at 525-27). As the Court has said, "[t]he requirements of equitable estoppel are quite exacting." Pangborne, supra, 116 N.J. at 553. Equitable estoppel is defined as

the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed . . . as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position [15] for the worse. . . .

[Ibid. (quoting Carlsen v. Masters, Mates & Pilots Pension Plan Trust, 80 N.J. 334, 339 (1979) (citations omitted).]

In Price, for example, the Court estopped the insurer from asserting the SOL defense because its conduct particularly asking for and receiving medical information and reports from the plaintiff for more than three years, including a request only nine days before expiration of the statute "lulled" the plaintiff into believing the claim had been properly filed. Price, supra, 182 N.J. at 526. We have made clear, however, that "[a]though the insurer may not 'lull' the insured into believing that he has time to file, its only duty is to act in good faith." Cruz-Diaz, supra, 409 N.J. Super. 279-80 (citing Price, supra, 182 N.J. at 526).

Unlike the factual circumstances presented in Price, State Farm's words and conduct cannot reasonably be seen as having "lulled" plaintiff's counsel into believing that he was relieved from filing a timely complaint. In its first letter, State Farm acknowledged receipt of the claim and advised plaintiff that he had the right to appeal from any settlement offer or denial, something State Farm was required to do by regulation. See e.g., N.J.A.C. 11:25-2.5 (requiring notification of internal appeals process). State Farm's second letter sought various documentary information. Plaintiff supplied virtually none of what was requested. Defendant should not be estopped from asserting the SOL as a defense simply because plaintiff's counsel held a subjective belief that his experience settling claims with State Farm relieved him of any further responsibility.

Moreover, the absence of prejudice to defendant is not, by itself, a sufficient reason to estop defendant from prevailing on the SOL defense. See, e.g., Nativo v. Grand Union Co., 315 N.J. Super. 185, 188-89 (App. Div. 1998) (acknowledging the plaintiff's claim that the defendant suffered no prejudice, yet affirming dismissal of the complaint filed seven days after expiration of the SOL in the absence of evidence that the defendant did anything to contribute to the delay), certif. denied, 158 N.J. 71 (1999).

We are therefore constrained to reverse the order under review. The consent judgment is vacated and the complaint is dismissed.

1 As we explain later, the complaint as to Kenneth C. Schmidt was dismissed with prejudice, and he is not a party to this appeal. We therefore use the singular, "defendant," throughout the balance of this opinion.

2 Both motions were directed only to plaintiff's individual claim for damages and not his son's claim. See N.J.S.A. 2A:14-21 (permitting a minor to commence an action for personal injuries within two years "after reaching majority").

3 Defendants settled plaintiff's son's case, which was dismissed by stipulation dated September 27, 2013. On June 16, 2014, plaintiff entered into a consent judgment for $225,000 against defendant; the complaint against Kenneth C. Schmidt was dismissed with prejudice. Usually, consent judgments are not appealable, however, "a consent judgment could reserve the right of a party to appeal an interlocutory order by providing that the judgment would be vacated if the interlocutory order were reversed on appeal." Janicky v. Point Bay Fuel, Inc., 410 N.J. Super. 203, 207 (App. Div. 2009). Although the consent judgment in this case does not contain such a condition, counsel advised us during oral argument that they expressly agreed that should defendants prevail on appeal, the judgment will be vacated. We therefore consider the merits of the appeal.