CITIZENS UNITED RECIPROCAL EXCHANGE v. KEYA KUFF

NOT FOR PUBLICATION WITHOUT THE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 only binding 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-0

CITIZENS UNITED RECIPROCAL EXCHANGE,

Plaintiff-Respondent,

v.

KEYA KUFF,

Defendant-Appellant.

______________________________________

October 13, 2016

Argued September 13, 2016 Decided

Before Judges Fisher and Vernoia.

On appeal from the Superior Court of New Jersey, Law Division, Cumberland County, Docket No. L-0738-13.

Stephen W. Guice argued the cause for appellant.

William B. Foti argued the cause for respondent (Bright & Sponder, attorneys; Mr. Foti, of counsel and on the brief).

PER CURIAM

Defendant Keya Kuff appeals a December 19, 2014 Law Division order granting plaintiff Citizens United Reciprocal Exchange's (CURE) motion for summary judgment declaring that CURE is not obligated to provide personal injury protection (PIP) benefits coverage1 to defendant, denying defendant's cross-motion for summary judgment, and dismissing her counterclaim.2 We affirm.

I.

We discern the following facts from the record and view the facts and all reasonable inferences therefrom in the light most favorable to defendant because she is the party against whom summary judgment was entered. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

Defendant had an automobile insurance policy with CURE and on May 30, 2012, completed an application questionnaire for the policy's renewal. The application included the question, "Do you or any driver in the household have a physical/mental condition or impairment?" Defendant's response was "no."

Defendant signed the application and, in doing so, "declar[ed] that the statements on [it were] true" and acknowledged, "[understood,] and agree[d] that any false or misleading information or any material misrepresentation or omission by" defendant would "void [her] coverage from the inception date of the contract." Following its receipt of the application, CURE renewed defendant's policy effective on August 7, 2012.

On October 26, 2012, defendant suffered personal injuries as the result of a single vehicle accident. During a December 10, 2012 interview by a CURE investigator, defendant was questioned concerning the accident and the information she provided in the application.

During its investigation of the accident and defendant's responses on the application, CURE learned that on March 14, 2012, prior to defendant's submission of the application, defendant had passed out at work, struck her head, and was admitted to the hospital for two days. On March 15, 2012, prior to her discharge from the hospital, defendant consulted with a neurologist, Dr. Dennis C. Graham, D.O. His consultation report stated that defendant was admitted to the hospital after experiencing seizure activity at work. The report noted that defendant's father advised that defendant suffered a second episode while she was awaiting treatment in the hospital's emergency room.

Graham's report also indicated that defendant said she suffered from lower back pain since being beaten up one year earlier. Defendant advised Graham she suffered from recurrent migraine headaches that caused "nausea, vomiting, chills, sweats, photophobia, and phonophobia," and had a history of depression for which she was taking medication.

Graham's report included an assessment that defendant's hospital admission was the result of new-onset seizure activity that could have been caused by a recent change in her medications. Graham also assessed her conditions to include migraines with aura and chronic low back pain.

During its investigation CURE was provided with a second report from Graham concerning an April 19, 2012 consultation with defendant. The report contained an assessment that defendant suffered from seizure activity, and reflected a plan to rule out epilepsy and adverse medication reactions as the cause. The report stated defendant's conditions included migraines with aura, closed head injury, and post-concussive syndrome.

The April 19, 2012 report also indicated that Graham spoke to defendant about driving issues and advised her to perform only essential driving to and from work until she had gone one or two months without seizure activity, at which time the driving restrictions might be modified. Graham did not recommend any further neurological investigation and instructed defendant to confer with her psychiatrist about a change in her medications. Defendant did not see Graham following the April 19, 2012 consultation.

Defendant submitted a claim to defendant for PIP benefits for the injuries she sustained during the October 2012 accident. Based upon the information contained in Graham's reports, CURE denied defendant's claim in a letter stating that defendant made material misrepresentations and omissions of fact in her May 30, 2012 application and "provided false and/or misleading statements" during the December 10, 2012 interview with the CURE investigator. CURE further stated defendant "failed to disclose that [she had] a medical condition that affect[ed] her ability to operate a motor vehicle safely," and the failure "affected CURE's ability to properly rate and underwrite" the insurance policy.

In August 2013, CURE filed a complaint seeking a declaratory judgment that defendant's renewal policy was void ab initio and that CURE was not obligated to provide PIP benefits to defendant. CURE alleged that defendant provided false information in the application (count one) and during the post-accident interview with the CURE investigator (count two). CURE also sought damages, claiming defendant violated the New Jersey Insurance Fraud Prevention Act, N.J.S.A. 17:33A-1 to -34 (count three).

Defendant filed an answer and counterclaims. She alleged CURE's denial of PIP benefits constituted a breach of contract (count one), CURE acted in bad faith (count two), and CURE violated the covenant of good faith and fair dealing (count three), the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -20 (count four), and the New Jersey Unfair Claim Settlement Practice Act, N.J.S.A. 17B:30-13.1 (count five).

After the exchange of discovery, CURE moved for summary judgment and dismissal of the counterclaims. Defendant cross-moved for summary judgment on the counterclaims and for dismissal of the complaint.

In support of its motion CURE argued defendant's denial on the application that she suffered from a medical or physical condition or impairment was false. CURE submitted a certification from its Director of Underwriting stating defendant's denial that she had a "physical/mental condition or impairment" constituted a misrepresentation because the medical records revealed she "had previously been diagnosed with seizures." The Director stated CURE would not have renewed defendant's insurance policy if she had accurately responded to the question on the application.

Defendant asserted that her denial on the application was truthful. She claimed she did not suffer from a seizure disorder and argued plaintiff's request that the court void the policy was based solely upon its incorrect contention she falsely denied having the disorder.

The motion judge found that the records established defendant's "March 15, 2012 hospitalization resulted from her fainting at work and then hitting her head," and during her two-day hospital stay she suffered another "seizure, convulsive event or some other significant event." The court noted the events occurred a very short time prior to defendant's completion of the application. In addition, the court found defendant suffered from depression for which she was receiving medication, and ongoing migraines that caused "tiredness, nausea, headaches, double vision, . . . eye pain," photophobia, and phonophobia at the time she completed the application. The court concluded that "by any measure [defendant] had a physical or mental impairment at the time" she submitted the application to CURE on May 30, 2012.

The court determined that defendant's denial of a physical or mental condition or impairment in the renewal application constituted a material misrepresentation because the nature of her impairments and conditions related directly to her ability to drive. The court concluded that CURE was entitled to summary judgment and declared the insurance policy's renewal void ab initio. The court dismissed the counterclaims because they were based upon the contention that CURE was obligated to provide PIP benefits. This appeal followed.

II.

In our review of an order granting or denying summary judgment, we "[are] bound by the same standard as the trial court under Rule 4:46-2(c)." State v. Perini Corp., 221 N.J. 412, 425 (2015) (citing Town of Kearny v. Brandt, 214 N.J. 76, 91 (2013); Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007)). "[B]oth trial and appellate courts must view the facts in the light most favorable to the non-moving party, which in this case is [defendant]." Bauer v. Nesbitt, 198 N.J. 601, 605 n.1 (2009) (citing R. 4:46-2(c); Brill, supra, 142 N.J. at 540).

"A court should grant summary judgment only when the record reveals 'no genuine issue as to any material fact' and 'the moving party is entitled to a judgment or order as a matter of law.'" Gormley v. Wood-El, 218 N.J. 72, 86 (2014) (quoting R. 4:46-2(c)). Issues of law are subject to the de novo standard of review, and the trial court's determination of such issues is accorded no deference. Kaye v. Rosefielde, 223 N.J. 218, 229 (2014) (citations omitted).

"A misrepresentation, made in connection with an insurance policy, is material if, when made, 'a reasonable insurer would have considered the misrepresented fact relevant to its concerns and important in determining its course of action. In effect, materiality [is] judged according to a test of prospective reasonable relevancy.'" Bastien, supra, 175 N.J. at 148 (quoting Longobardi v. Chubb Ins. Co. of N.J., 121 N.J. 530, 542(1990)). The standard encourages policyholders to tell the truth and entitles an insurance carrier to void a policy issued without knowledge of the misrepresentation. Id. at 148-50.

Defendant argues there was a genuine issue of material fact as to whether her denial of a physical or mental condition or impairment on the application constituted a material misrepresentation permitting the court's voiding of her policy. She contends she did not have a seizure disorder and presented evidence contradicting plaintiff's claim that she had the disorder. She also asserts there was no evidential support for the court's determination that her denial of a migraine condition and depression was a material misrepresentation.

Defendant does not dispute that she passed out at work on March 14, 2012, had a second episode in the emergency room, and consulted with Graham about seizure activity on two occasions during the weeks prior to her completion of the application. She asserts, however, that she did not have a seizure disorder when she completed the application on May 30, 2012.

Defendant's deposition testimony contradicted information contained in Graham's reports. She testified that during the March 14, 2012 consultation with Graham she was advised she "could have seizure activity." She also testified that during the April 19, 2012 consultation Graham advised her that she was "cleared" to drive wherever she wanted. She contends Graham would not have cleared her to drive if she suffered from a seizure disorder.

Defendant submitted a report from a neurologist, Dr. Kishor Patil, M.D., who reviewed the records concerning defendant's March 14, 2012 hospital admission and concluded defendant did not suffer from a seizure disorder. Defendant also provided a July 30, 2014 report from her psychiatrist, Dr. Lawrence P. Clinton, M.D., stating that defendant did not suffer from "seizure difficulties, or a history of [s]eizure disorder."

Based upon the conflicting evidence provided, we are persuaded that there were genuine issues of material fact as to whether defendant suffered from a seizure disorder on May 30, 2012, and whether her denial on the application, as it pertained to a seizure disorder, was false. For that reason, we would not affirm the judge's grant of plaintiff's summary judgment motion if it was based solely upon a determination that defendant falsely denied she had a seizure order.

The motion court, however, granted plaintiff's summary judgment motion based upon its finding that defendant falsely denied having recurrent migraines and depression. It is undisputed that defendant suffered from the conditions and falsely denied their existence on the application. Defendant contends the judge erred by basing his decision on her admittedly false denial of the conditions because CURE did not present affirmative evidence it would not have issued the policy had it known about them. We disagree.

Defendant testified that her recurrent migraines began when she was a child, continued through the time she completed the application, and were characterized by nausea, dizziness, tiredness, photophobia, phonophobia, and blurred vision. She also testified that at the time she completed the application she was treating with a psychiatrist for depression and was prescribed medication for it.

The motion judge correctly relied upon defendant's failure to disclose those conditions in granting plaintiff's request for a declaratory judgment voiding defendant's insurance policy. We are satisfied that any reasonable carrier would have considered the defendant's migraine and depression "relevant to its concerns and important in determining its course of action." Bastien, supra, 175 N.J. at 148 (quoting Longobardi, supra, 121 N.J. at 542).

A "prospective insured must not misrepresent or conceal information concerning risks entailed in coverage under an insurance policy." Progressive Cas. Ins. Co. v. Hanna, 316 N.J. Super. 63, 69 (App. Div. 1998) (quoting Sears Mortgage Corp. v. Rose, 134 N.J. 326, 347 (1993)). Defendant's physical and mental conditions, and particularly the blurred vision and dizziness which accompanied her recurrent migraine headaches, directly related to the risks assumed by defendant in its issuance of a policy insuring defendant's operation of a motor vehicle. When asked whether she had a "physical/mental condition or impairment," defendant had an obligation to disclose conditions that might affect plaintiff's decision to assume the risk of providing automobile insurance to her. See Hanna, supra, 316 N.J. Super. at 69 (citing Locicero v. John Hancock Mutual Life Ins. Co., 32 N.J. Super. 300, 306 (App. Div. 1954)). The court correctly determined that defendant's undisputed failure to do so entitled plaintiff to summary judgment declaring the renewed policy void ab initio.

Defendant's remaining arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

1 PIP benefits "include payment of medical expenses, without regard to fault, for the named insured and resident members of his or her family, others occupying a vehicle of the named insured, or pedestrians injured in an automobile accident." Palisades Safety & Ins. Ass'n v. Bastien, 175 N.J. 144, 148 (2003) (citing N.J.S.A. 39:6A-4).

2 Defendant's notice of appeal also reflects an appeal of an August 8, 2014 order granting CURE's motion to dismiss the punitive damage claim in her counterclaim. Defendant's brief makes no argument concerning the August 8, 2014 order and, as a result, she has waived the right to challenge the entry of the order. Drinker Biddle & Reath LLP v. N.J. Dept. of Law & Pub. Safety, 421 N.J. Super. 489, 496 n.5 (App. Div. 2011); Liebling v. Garden State Indem., 337 N.J. Super. 447, 465-66 (App. Div.), certif. denied, 169 N.J. 606 (2001). We affirm the court's entry of the August 8, 2014 order and address only the court's December 19, 2014 order.