STATE OF NEW JERSEY VS. CHARLES P. MCCOY(11-03-0187, CUMBERLAND COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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 binding only 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-4567-14T4
LORRAINE BRYANT,
Plaintiff-Appellant/
Cross-Respondent,
v.
JOHN H. GOVEN,
Defendant,
and
AMERIPRISE AUTO & HOME
INSURANCE, AMERIPRISE
INSURANCE COMPANY and IDS
CASUALTY PROPERTY INSURANCE
COMPANY,
Defendants-Respondents/
Cross-Appellants.
——————————————————————————————————-
Argued April 6, 2017 – Decided May 2, 2017
Before Judges Hoffman and O'Connor.
On appeal from Superior Court of New Jersey,
Law Division, Union County, Docket No. L-0359-
14.
Christopher J. Portee argued the cause for
appellant/cross-respondent (Epstein Ostrove,
LLC, attorneys; Carol Matula, of counsel and
on the briefs; Daniel N. Epstein, on the
briefs).
Michael R. Tucker, Jr., argued the cause for
respondents/cross-appellants (Bruno, Gerbino
& Soriano, LLP, attorneys; Mr. Tucker and
Matthew J. Smith, on the briefs.
PER CURIAM
On September 13, 2011, plaintiff Lorraine Bryant sustained
bodily injuries and incurred medical expenses when her host driver,
defendant John H. Goven, lost control of his truck and slammed
into a pole. Plaintiff filed suit against Goven seeking damages;
in the same complaint, she sued defendant insurance companies,1
seeking personal injury protection (PIP) benefits and uninsured
motorist (UM) coverage under her mother's automobile insurance
policy.
Plaintiff appeals from an April 24, 2015 Law Division order
denying her motion for summary judgment against defendants and
dismissing her claims against defendants as judicially estopped,
based upon her failure to list the claims in a previously filed
bankruptcy petition. Defendants appeal from the same order.
1 For ease of reference, we refer to defendant insurance companies
(Ameriprise Auto & Home Insurance, Ameriprise Insurance Company,
and IDS Property Casualty Insurance Company, all related entities)
jointly as defendants. Because defendant John H. Goven defaulted,
our reference to defendants excludes him unless otherwise noted.
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Plaintiff argues the motion court should not have dismissed
her complaint because of her failure to disclose her claims during
her concurrent bankruptcy proceeding. She further argues
defendants owe her benefits under her mother's insurance policy
because (1) she lived with her mother at the time of her accident,
(2) her mother did not have to list her on the policy to insure
her, and (3) she had a reasonable excuse for not notifying
defendants of her automobile accident until twenty months
afterwards. Defendants argue plaintiff does not have standing to
bring her claims because the claims belong to the Chapter 7 Trustee
(the Trustee) of plaintiff's bankruptcy estate. Alternatively,
defendants argue we should vacate the judgment plaintiff obtained
against Goven, as plaintiff failed to provide them with notice of
the trial court's proof hearing after Goven defaulted.
We agree with plaintiff's contention the motion court
prematurely dismissed her complaint. The court should have
notified the Trustee of the case and allowed the Trustee to decide
whether to pursue plaintiff's claims. We therefore vacate the
dismissal order because the motion court did not provide notice
to the Trustee, who owns the claim on behalf of plaintiff's
creditors. We reject defendants' argument we should vacate the
judgment plaintiff obtained against Goven based upon plaintiff's
failure to provide them with notice of the trial court's proof
3 A-4567-14T4
hearing. Because plaintiff never notified defendants of the
hearing, they are not in privity with Goven, and they may
relitigate plaintiff's damages in any future UM proceeding.
I.
On October 26, 2010, defendants issued an automobile
insurance policy to plaintiff's mother, who resided in Elizabeth.
The policy insured her 1998 Cadillac Deville, and included $75,000
of PIP coverage and $100,000 of UM bodily injury coverage per
person. Plaintiff's mother renewed the policy twice, maintaining
the policy through April 26, 2012. The policies listed plaintiff's
mother as the only driver.
The policy stated defendants would "pay personal injury
protection benefits to or for an insured who sustains bodily
injury. The bodily injury must be caused by an accident arising
out of the ownership, maintenance or use, including loading or
unloading, of a private passenger car as an automobile."2 The
policy defined "insured" as the "named insured or any any relative
who sustains bodily injury while[] [o]ccupying or using an auto."
The policy defined "relative" as "a person related to [the
policyholder] by blood, marriage or adoption who is a resident in
[the policyholder's] household."
2 The underlined terms were bolded in the original policy.
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The policy also stated defendants would "pay damages for
bodily injury . . . caused by an accident which the insured is
legally entitled to recover from the owner or operator of an
uninsured motor vehicle . . . arising out of the ownership,
maintenance or use of that vehicle." In this context, the policy
defined "insured" to include the policyholder's "relative if a
resident of [the policyholder's] household."
The policy also required:
In the event of an accident, written notice
must be given to us as soon as reasonably
practicable but in no event more than [thirty]
days after the date of accident, unless the
eligible injured person submits written proof
providing clear and reasonable justification
for failure to comply with such time
limitation.
At her deposition, plaintiff described the accident.
Although she wore a seatbelt, plaintiff remembered her "body was
just going around" in the pickup truck, and she then lost
consciousness. She awoke outside of the truck with her son above
her, calling her name. The police report stated Goven's vehicle
crashed into the back of a stopped car and then hit a pole. The
police report also listed the address of plaintiff's mother as
plaintiff's address.
An ambulance took plaintiff to the hospital. Plaintiff's
ambulance bill and emergency room (ER) records listed her mother's
address as her own. The ER records stated plaintiff sustained a
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lumbar sprain, shoulder contusion, and cervical strain. Plaintiff
subsequently received treatment from other doctors. One doctor
gave her injections into her lower back to decrease her pain. The
doctor also gave her injections into her shoulder, which had a
tear.
At the time of her deposition in October 2014, plaintiff
continued to have pain in her upper back, lower back, down her
left leg, and into her foot. The following month, a doctor wrote
to plaintiff's counsel, stating plaintiff had "impressive disc
herniations at almost every level." The doctor stated the
herniations were "traumatic" and were "all permanent in nature and
caused by the motor vehicle accident of September 13, 2011."
Goven had a "basic" automobile insurance policy, which
provided no liability insurance coverage and only a $10,000 per
person medical expense extension. Plaintiff received the $10,000
under Goven's policy. Plaintiff had no automobile or health
insurance in her own name. Because plaintiff's mother had been
sick and was not driving her car, plaintiff assumed she had dropped
her auto insurance by the time of the subject accident.
On June 7, 2013, plaintiff filed a Chapter 7 bankruptcy
petition with the United States Bankruptcy Court for the District
of New Jersey. Plaintiff did not list any claim relating to the
subject accident in her disclosure of personal property.
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Plaintiff first met with her current counsel on June 21,
2013. She was unsure whether she "would be able [to] file suit
at that date." She did not "realize" she "needed to disclose this
suit in" her bankruptcy petition. Four days later, plaintiff's
counsel sent the police report of the subject accident to
defendants.
Defendants took a recorded statement from plaintiff on July
16, 2013; she explained she did not report the accident within
thirty days because she did not think her mother had auto insurance
at the time. On August 2, 2013, plaintiff submitted an application
for PIP benefits, listing her mother's address as her address.
Because the statute of limitations was about to run, plaintiff
filed suit against defendants, including Goven, seeking insurance
benefits under her mother's auto insurance policy and damages
against Goven.
On September 20, 2013, the Bankruptcy Court granted plaintiff
a discharge under 11 U.S.C.A. § 727. Five days later, the
Bankruptcy Court entered a final decree, discharging the Trustee
and closing plaintiff's bankruptcy case.
In February 2015, plaintiff filed a motion for a "declaratory
judgment" establishing her entitlement to insurance benefits under
her mother's automobile insurance policy. Defendants opposed the
motion and filed a cross-motion for summary judgment. On April
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24, 2015, following oral argument, the court denied plaintiff's
motion and granted defendants' cross-motion. The court explained
its denial of plaintiff's motion:
Plaintiff claims that she resided with her
[m]other for [fifty-four] years. However, the
only proofs offered by plaintiff to establish
this fact is her own deposition testimony, and
one gas bill addressed to a Lorraine Drisco
(phonetic). Plaintiff claims that she used
the name Drisco because it was her son's
[f]ather's name, a party's own testimony in a
single utility bill with the first name as
plaintiff, but a different last name, is
certainly not to this [c]ourt, sufficient
proof to establish the material fact that she
resided with her [m]other at the time of the
subject accident.
The court also explained its grant of defendants' cross-motion:
In this case, clearly, [plaintiff] did file
and had her debts discharged . . . without
revealing . . . the potential right to claim
under this litigation. Here, defendant claims
that plaintiff is judicially estopped from
arguing she's entitled to benefits, whether
PIP or UIM under her [m]other's policy of
insurance. Defendant argues that plaintiff
had debts in connection with . . . the
litigation that were discharged as a result
of her bankruptcy.
To the extent that all of her debts were
discharged, it's hard to argue with that at
this point. I do find . . . judicial estoppel,
without considering the other arguments of
defendant[s] . . . . [D]efendant[s] [are]
entitled [to] summary judgment in this matter.
The court did not dismiss plaintiff's claims against Goven.
8 A-4567-14T4
Even though the April 24, 2015 order was clearly
interlocutory, plaintiff filed a notice of appeal on June 5, 2015,
and defendants filed their cross-appeal on June 29, 2015.
Notwithstanding plaintiff's previous bankruptcy filing, and with
no notice to the Trustee or counsel for defendants, on July 13,
2015, the trial court held a proof hearing to determine plaintiff's
damages, and entered a $400,000 default judgment against Goven.
II.
We initially review certain procedures applicable to
plaintiff's Chapter 7 bankruptcy filing. When a debtor files a
bankruptcy petition, the debtor formally requests the relief
afforded by the Bankruptcy Code. The petition not only initiates
a bankruptcy action, it also acts as an order for relief of the
debtor, as provided by the case under which the petition was
submitted. The debtor becomes obligated to provide full disclosure
of his or her financial affairs, 11 U.S.C.A. § 521, in exchange
for the Bankruptcy Code's protections, such as the automatic stay
provisions of 11 U.S.C.A. § 362(a).
The purpose of a Chapter 7 case, sometimes called a
liquidation, is to allow an individual debtor to retain certain
exempt assets, 11 U.S.C.A. § 522, surrender all assets in excess
of those exemptions to the appointed Chapter 7 trustee, 11 U.S.C.A.
§ 704, and discharge all unsecured debts, 11 U.S.C.A. § 727(a),
9 A-4567-14T4
in order to make an unencumbered fresh start, relieved from the
immediate financial pressure that drove the debtor to file
bankruptcy. Grogan v. Garner, 498 U.S. 279, 286, 111 S. Ct. 654,
660, 112 L. Ed. 2d 755, 765 (1991).
The commencement of a bankruptcy case also creates an estate
consisting of "all legal or equitable interests of the debtor in
property as of the commencement of the case." 11 U.S.C.A. §
541(a)(1). "The scope of this [Code section] is broad. It
includes all kinds of property, including tangible or intangible
property, causes of action . . ., and all other forms of
property . . . ." Senate Report No. 95-989. All property comes
into the debtor's estate, and in a Chapter 7 case, the trustee
succeeds to the debtor's interest in the property as fiduciary to
the debtor's creditors.
The debtor's petition includes schedules listing all assets
and liabilities. 11 U.S.C.A. § 521(a)(1)(B)(i). The debtor has
an affirmative duty to provide complete disclosure. Ibid.; see
Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414,
416-17 (3d Cir.) (noting § 521 outlines a non-exhaustive list of
the debtor's duties in a bankruptcy case), cert. denied, 488 U.S.
967, 109 S. Ct. 495, 102 L. Ed. 2d 532 (1988). Schedule B requires
disclosure of all personal property "of whatever kind," in which
the debtor has a whole or partial interest. The schedule lists
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various categories of assets and requires the debtor to describe
the nature and location of the property, whether it is owned with
another, and the value of the debtor's interest. Specifically,
item 21 requests disclosure of "[o]ther contingent and
unliquidated claims of every nature, including tax refunds,
counterclaims of the debtor, and rights to setoff claims." The
debtor who has an interest in an unliquidated personal injury
claim must disclose that claim. Among the property a debtor may
retain as exempt is "a payment, not to exceed $23,675, on account
of personal bodily injury, not including pain and suffering or
compensation for actual pecuniary loss, of the debtor." 11
U.S.C.A. § 522(d)(11)(D). According to 28 U.S.C.A. § 157(b)(5),
[t]he district court shall order that personal
injury tort and wrongful death claims shall
be tried in the district court in which the
bankruptcy case is pending, or in the district
court in the district in which the claim
arose, as determined by the district court in
which the bankruptcy case is pending.
Once the debtor files his or her petition, the Chapter 7
panel trustee conducts a meeting of creditors. 11 U.S.C.A. §
341(a). A "debtor shall appear and submit to examination under
oath" conducted by the trustee at the meeting of creditors. 11
U.S.C.A. § 343. Any creditor may examine a debtor at the § 341(a)
meeting. Ibid.
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When a Chapter 7 debtor fulfills all duties described by the
Code, see 11 U.S.C.A. § 521, and otherwise provides full
disclosure, the debtor is eligible to retain all scheduled exempt
property, 11 U.S.C.A. § 523, and any other property of the estate,
see 11 U.S.C.A. § 541(a), abandoned or not administered by the
trustee. 11 U.S.C.A. § 554(a) and (c). Moreover, a debtor is
entitled to a discharge of the unsecured debts. 11 U.S.C.A.
727(a).
A. Standing
"The issue of standing presents a legal question subject to
our de novo review." Courier-Post Newspaper v. Cty. of Camden,
413 N.J. Super. 372, 381 (App. Div. 2010). Our Supreme Court
defines standing broadly and does not restrict New Jersey courts
to the rigid "case or controversy" requirement under Article III,
§ 2 of the United States Constitution. Salorio v. Glaser, 82 N.J.
482, 490 (1980). The New Jersey Constitution "contains no
analogous provision limiting the subject-matter jurisdiction of
the Superior Court." Id. at 491 (citing N.J. Const. art. VI, §
3, ¶ 2). New Jersey courts remain "free to fashion [our] own law
of standing consistent with notions of substantial justice and
sound judicial administration." Ibid. The Court has therefore
found "it unnecessary to consider whether federal standing
12 A-4567-14T4
requirements have been met" when deciding questions of standing
in New Jersey courts. Ibid.
New Jersey courts "have traditionally taken a generous view
of standing in most contexts." In re N.J. State Contract A71188
for Light Duty Automotive Parts, 422 N.J. Super. 275, 289 (App.
Div. 2011).
Without ever becoming enmeshed in the federal
complexities and technicalities, we have
appropriately confined litigation to those
situations where the litigant's concern with
the subject matter evidenced a sufficient
stake and real adverseness. In the overall
we have given due weight to the interests of
individual justice, along with the public
interest, always bearing in mind that
throughout our law we have been sweepingly
rejecting procedural frustrations in favor of
"just and expeditious determinations on the
ultimate merits."
[Crescent Park Tenants Ass'n v. Realty
Equities Corp. of N.Y., 58 N.J. 98, 107-08
(1971).]
"A financial interest in the outcome ordinarily is sufficient to
confer standing." EnviroFinance Grp., LLC v. Envtl. Barrier Co.,
LLC, 440 N.J. Super. 325, 340 (App. Div. 2015). "Ordinarily, a
litigant may not claim standing to assert the rights of a third
party. However, standing to assert the rights of third parties
is appropriate if the litigant can show sufficient personal stake
and adverseness so that the [c]ourt is not asked to render an
13 A-4567-14T4
advisory opinion." Jersey Shore Med. Ctr.-Fitkin Hosp. v. Estate
of Baum, 84 N.J. 137, 144 (1980).
Defendants argue plaintiff lacks standing because her claims
became part of her bankruptcy estate after she filed her bankruptcy
petition. They cite federal cases in which federal courts have
held the plaintiffs lacked standing to bring claims that they
neglected to disclose in their bankruptcy proceedings because the
trustee had "exclusive standing to assert those claims." DiMaio
Family Pizza & Luncheonette v. Charter Oak Fire Ins. Co., 448 F.3d
460, 463 (1st Cir. 2006). Finding these cases neither controlling
nor persuasive, we conclude plaintiff has standing to bring her
claims.
New Jersey courts are "free to fashion [our] own law of
standing consistent with notions of substantial justice and sound
judicial administration." Glaser, supra, 82 N.J. at 491. Although
defendants are correct that plaintiff's claims are part of her
bankruptcy estate, plaintiff may retain up to $23,675 "on account
of personal bodily injury." 11 U.S.C.A. § 522(d)(11)(D).
Plaintiff may also retain any property that the trustee abandons
or declines to administer. 11 U.S.C.A. § 554(a) and (c). These
rights give her a "financial interest" in her claims,
EnviroFinance, supra, 440 N.J. Super. at 340, and a "sufficient
personal stake and adverseness so that [the trial court was] not
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asked to render an advisory opinion." Estate of Baum, supra, 84
N.J. at 144.
B. Judicial Estoppel
We next review the trial court's application of the judicial
estoppel doctrine. "The doctrine of judicial estoppel is well
entrenched in New Jersey's jurisprudence." Newell v. Hudson, 376
N.J. Super. 29, 38 (App. Div. 2005); see also Koppel v. Olaf Realty
Corp., 56 N.J. Super. 109, 121 (Ch. Div. 1959), aff'd, 62 N.J.
Super. 103 (App. Div. 1960).
"It is 'an equitable doctrine precluding a party from
asserting a position in a case that contradicts or is inconsistent
with a position previously asserted by the party in the case or a
related legal proceeding.'" Newell, supra, 376 N.J. Super. at 38
(quoting Tamburelli Props. v. Cresskill, 308 N.J. Super. 326, 335
(App. Div. 1998)); McCurrie v. Town of Kearney, 174 N.J. 523, 533-
34 (2002). "The purpose of the judicial estoppel doctrine is to
protect 'the integrity of the judicial process.'" Kimball Int'l,
Inc. v. Northfield Metal Prods., 334 N.J. Super. 596, 606 (App.
Div. 2000) (quoting Cummings v. Bahr, 295 N.J. Super. 374, 387
(App. Div. 1996)), certif. denied, 167 N.J. 88 (2001).
Essentially, if a litigant's position in one matter is true, then
the contrary position in the subsequent matter cannot be. Thus,
the doctrine is not intended to bar every inconsistency, but
15 A-4567-14T4
"[r]ather . . . designed to prevent litigants from 'playing fast
and loose with the courts.'" Cummings, supra, 295 N.J. Super. at
387 (citing Ryan Operations G.P. v. Santiam-Midwest Lumber Co.,
81 F.3d 355, 358 (3d Cir. 1996)).
"Bad faith" "is not a requirement in New Jersey." Atlantic
City v. Cal. Ave. Ventures, LLC, 23 N.J. Tax 62, 68-69 (App. Div.
2006) (citing Kimball Int'l, Inc., supra, 334 N.J. Super. at 608
n.4; Bray v. Cape May City Zoning Bd. of Adjustment, 378 N.J.
Super. 160, 166-67 (App. Div. 2005)). Moreover, "[s]ince the
purpose of the doctrine of judicial estoppel is to protect the
integrity of the tribunal before which a party seeks to contest
facts which he has previously [and successfully] admitted . . .,
it is that tribunal which should determine whether or not to invoke
this doctrine." State v. Gonzalez, 273 N.J. Super. 239, 260 (App.
Div. 1994) (citation omitted), aff'd, 142 N.J. 618 (1995). "Thus,
the forum court applies its own law regarding the applicability
of judicial estoppel." Cal. Ave. Ventures, LLC, supra, 23 N.J.
Tax at 68.
The application of judicial estoppel, particularly to bar a
plaintiff's cause of action, is an extraordinary remedy and its
application is subject to the court's sound discretion. See Klein
v. Stahl GMBH & Co. Maschinefabrik, 185 F.3d 98, 108 (3d Cir.
1999) (citing McNemar v. Disney Store, Inc., 91 F.3d 610, 613 (3d
16 A-4567-14T4
Cir. 1996) (Appellate courts "review the application of judicial
estoppel under an 'abuse of discretion' standard"), cert. denied,
519 U.S. 1115, 117 S. Ct. 958, 136 L. Ed. 2d 845 (1997)). As an
equitable doctrine, judicial estoppel "should be invoked only
'when a party's inconsistent behavior will otherwise result in a
miscarriage of justice.'" Kimball Int'l, Inc., supra, 334 N.J.
Super. at 608 (quoting Ryan Operations, supra, 81 F.3d at 365);
see also State Farm Fire & Cas. Co. v. Connolly, 371 N.J. Super.
119, 125 (App. Div. 2004). A misapplication of a trial court's
discretion results when "its ruling is founded on an error of law
or a misapplication of law to the facts." Montrose v. Med. Grp.
Participating Sav. Plan v. Bulger, 243 F.3d 773, 780 (3d Cir.
2001) (citing In re O'Brien, 188 F.3d 116, 122 (3d Cir. 1999)).
Plaintiff argues the trial court should not have dismissed
her complaint as judicially estopped because "the bankruptcy can
be reopened under 11 U.S.C.A. § 350(b) should [she] recover
benefits in any trial." "Rather than remand with instructions for
the trustee to review the case . . . , [plaintiff] requests that
her attorney be permitted to prosecute [her] claims, and if there
is a recovery, the bankruptcy trustee can be notified to reopen
the case." We agree that the trial court should not have
completely dismissed plaintiff's claims, but we decline to allow
17 A-4567-14T4
plaintiff to pursue them without notifying the Trustee of her
bankruptcy estate.
If plaintiff had properly disclosed her claims during her
bankruptcy, the Trustee would have reviewed them and decided
whether to pursue them. The trial court should have provided the
Trustee the opportunity to review plaintiff's claims before
determining whether plaintiff's failure to disclose her claims
renders her judicially estopped from pursuing them herself. A
bankruptcy trustee may reopen a case at any time to administer
assets. 11 U.S.C.A. § 350(b). As necessary, the trustee may
examine the debtor or other evidence to assess the prospects of
recovery for benefit of the creditors. If the trustee chooses to
assume the presentation of the claims as pled, the trial court
should schedule a trial. If the Trustee prevails, defendants
should pay the Trustee on behalf of the estate, because the
approval of any distribution of the monies rests with the
bankruptcy court.
Judicial estoppel applies when a party is "asserting a
position in a case that contradicts or is inconsistent with a
position previously asserted by the party in the case or a related
legal proceeding." Newell, supra, 376 N.J. Super. at 38 (quoting
Tamburelli Props., supra, 308 N.J. Super. at 335). The Trustee
did not address plaintiff's accident-related claims in the
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bankruptcy court, so the Trustee may maintain these claims before
New Jersey courts without contradiction. We therefore conclude
the trial court mistakenly exercised its discretion when it
dismissed plaintiff's claims against defendants without first
affording the Trustee the opportunity to review and possibly pursue
these claims. If the Trustee declines to pursue plaintiff's
claims, the trial court may reconsider defendants' motion for
dismissal in accordance with Kimball Int'l, Inc., supra, 334 N.J.
Super. at 608 (recognizing "judicial estoppel is an 'extraordinary
remedy,' which should be invoked only 'when a party's inconsistent
behavior will otherwise result in a miscarriage of justice'"
(quoting Ryan Operations, supra, 81 F.3d at 365)).
C. Summary Judgment
A court may grant summary judgment only "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). The court must view the facts in a light most favorable to
the non-moving party. Polzo v. Cnty. of Essex, 209 N.J. 51, 56-
57 n.1 (2012) (citing Brill v. Guardian Life Ins. Co. of Am., 142
N.J. 520, 523 (1995)). The factfinder must resolve the slightest
doubt as to an issue of material fact, Saldana v. DiMedio, 275
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N.J. Super. 488, 494 (App. Div. 1994), or even simply an issue of
credibility, D'Amato by McPherson v. D'Amato, 305 N.J. Super. 109,
114-15 (App. Div. 1997). These questions consequently preclude a
court from granting judgment as a matter of law. "[S]ummary
judgment should be denied unless the right thereto appears so
clearly as to leave no room for controversy." Saldana, supra, 275
N.J. Super. at 495.
Our review of a ruling on summary judgment is de novo,
applying the same legal standard as the trial court. Nicholas v.
Mynster, 213 N.J. 463, 478 (2013). Thus, we must first determine
whether any genuine issue of material fact exists, and, if not,
evaluate whether the trial court's ruling was correct as a matter
of law. Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330
(2010).
"[A]n insured bears the burden of establishing that a claim
is within the basic policy terms." Cobra Prods., Inc. v. Fed.
Ins. Co., 317 N.J. Super. 392, 401 (1998) (citing Diamond Shamrock
Chems. v. Aetna, 258 N.J. Super. 167, 216 (App. Div. 1992), certif.
denied, 134 N.J. 481 (1993)), certif. denied, 160 N.J. 89 (1999).
"The insurer has the burden of establishing application of an
exclusion." Ibid. (citing Hartford Accident & Indem. Co. v. Aetna
Life & Cas. Ins. Co., 98 N.J. 18 (1984)). "If the words used in
an exclusionary clause are clear and unambiguous, 'a court should
20 A-4567-14T4
not engage in a strained construction to support the imposition
of liability.'" Flomerfelt v. Cardiello, 202 N.J. 432, 442 (2010)
(quoting Longobardi v. Chubb Ins. Co., 121 N.J. 530, 537 (1990)).
"In determining whether there is a common household, [New
Jersey] courts often consider whether the insured and the relative
seeking coverage share a 'substantially integrated family
relationship.'" Gibson v. Callaghan, 158 N.J. 662, 673 (1999).
"That two people reside under the same roof is neither necessary
nor sufficient for a finding that those people share a
'household.'" Id. at 672. This court has previously held a son
remained in his parents' household because he maintained a bedroom
in their house and regularly spent two nights a week there, even
though he "lived primarily" in an apartment in New York City. Id.
at 673 (citing Arents v. Gen. Accident Ins. Co., 280 N.J. Super.
423, 425-26 (App. Div. 1995)). This court also "considered the
fact that the insured kept clothing at his parents' house, that
he had a car garaged, registered, and insured at that address, and
that he made household repairs." Ibid. (citing Arents, supra, 280
N.J. Super. at 425-26).
Plaintiff argues the trial court should have granted her
summary judgment because (1) she lived in her mother's household,
(2) her mother did not need to list her as a driver on her policy
in order for plaintiff to have coverage under the policy, and (3)
21 A-4567-14T4
she notified defendants within a reasonable time. We conclude the
record presents a genuine issue of material fact as to whether
plaintiff lived in her mother's home. We refrain from deciding
plaintiff's last two contentions because the trial court did not
reach them.
During discovery and the hearing on summary judgment,
plaintiff produced a single gas bill, addressed to "Loraine
Drisco," for her mother's home. The bill showed a "Turn On Date"
of January 26, 1996, a "Last Payment Date" of October 5, 2010, and
a "Reinstate Date" of January 20, 2012. In her answer to
defendants' interrogatories, plaintiff stated her middle name was
"Drisco." At the hearing, her counsel stated "Drisco" was the
name of her son's father. Plaintiff did not provide any other
documentation that she lived with her mother. Plaintiff did not
produce evidence establishing she lived with her mother "so clearly
as to leave no room for controversy." Saldana, supra, 275 N.J.
Super. at 495. We therefore conclude the trial court properly
denied plaintiff's motion for summary judgment.
D. Attorney's Fees
Rule 4:42-9(a)(6) permits the award of attorney's fees "[i]n
an action upon a liability or indemnity policy of insurance, in
favor of a successful claimant." See, e.g., Maros v. Transamerica
Ins. Co., 76 N.J. 572, 579 (1978). The rule is intended "to
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discourage groundless disclaimers and to provide more equitably
to an insured the benefits of the insurance contract without the
necessity of obtaining a judicial determination that the insured,
in fact, is entitled to such protection." Sears Mortg. Corp. v.
Rose, 134 N.J. 326, 356 (1993) (quoting Gaur. Ins, v. Saltman, 217
N.J. Super. 604, 610 (App. Div. 1987)). In other words, an award
for attorney's fees and costs in an action to enforce insurance
benefits is supported by "[t]he theory . . . that one covered by
a policy is entitled to the full protection provided by the
coverage, and that benefit should not be diluted by the insured's
need to pay counsel fees in order to secure its rights under the
policy." Liberty Vill. Assocs. v. W. Am. Ins. Co., 308 N.J. Super.
393, 406 (App. Div.) (citing Sears Mortg., supra, 134 N.J. at
356), certif. denied, 154 N.J. 609 (1998).
Plaintiff argues she is entitled to attorney's fees. Because
plaintiff has not yet established herself as a "successful
claimant," we decline to award her attorney's fees at this point
of the litigation. See, e.g., Maros, supra, 76 N.J. at 579.
E. Notice of Proof Hearing
"[P]laintiffs are obligated to provide notice to their UM/UIM
carrier of the institution of suit against the tortfeasor." Zirger
v. Gen. Accident Ins. Co., 144 N.J. 327, 340-41 (1996). When
plaintiffs provide this notice, they establish the carrier's
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privity with the tortfeasor for the purposes of issue and claim
preclusion, preventing redundant litigation. Id. at 342. When
plaintiffs do not provide this notice, the carrier is not in
privity with the tortfeasor for the purposes of issue and claim
preclusion, so the carrier may relitigate the issue of damages.
Vaccaro v. Pa. Nat'l Mut. Cas. Ins. Co., 349 N.J. Super. 133, 143
(App. Div.) ("To bind the UM/UIM carrier, there must be notice to
the carrier and an adversarial proceeding that determines
damages."), certif. denied, 174 N.J. 40 (2002).
Defendants argue plaintiff should have given them notice of
the hearing and allowed them to oppose her proofs because they
step "into Mr. Goven's shoes for the purposes" of plaintiff's UM
action. Defendants are clearly mistaken. Because plaintiff never
notified defendants of the hearing, they are not in privity with
Goven and may relitigate his damages in any future UM action. See
Vaccaro, supra, 349 N.J. Super. at 143. We therefore decline to
vacate plaintiff's default judgment against Goven.
We do, however, vacate the trial court's order of dismissal
and remand the matter for additional proceedings consistent with
our opinion. We do not retain jurisdiction.
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