SELECTIVE AUTO INSURANCE COMPANY, ETC. VS. RAYMOND CASCARINO (L-0297-18, CAPE MAY COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-1266-19T1
SELECTIVE AUTO
INSURANCE COMPANY
OF NEW JERSEY,
Plaintiff-Respondent,
v.
RAYMOND CASCARINO,
Defendant-Appellant,
and
DONALD C. TOMASELLO,
and GEICO,
Defendants.
_________________________
Argued December 1, 2020 — Decided December 21, 2020
Before Judges Mawla and Natali.
On appeal from the Superior Court of New Jersey, Law
Division, Cape May County, Docket No. L-0297-18.
Eric S. Poe argued the cause for appellant.
Michael T. McDonnell III, argued the cause for
respondent (Kutak Rock, LLP, attorneys; Michael T.
McDonnell III, Lindsay Andreuzzi, and Kimberli
Gasparon, of counsel and on the brief).
PER CURIAM
Defendant Raymond Cascarino appeals from an October 24, 2019 order
entering summary judgment in favor of plaintiff Selective Auto Insurance
Company of New Jersey (Selective). We affirm.
I.
On August 9, 2016, Cascarino was struck while walking and injured by a
vehicle operated by defendant Donald C. Tomasello. At the time of the accident,
Cascarino was insured under a motor vehicle policy by Selective. Tomasello
was insured by a GEICO policy, which had a $100,000 liability coverage limit.
Cascarino's policy provided underinsured motorist (UIM) coverage in the
amount of $250,000 per person subject to certain exclusions.
On December 14, 2016, Cascarino's counsel sent a demand letter to
GEICO stating:
I am hereby demanding that you pay your policy limits
for Bodily Injury Liability Coverage on behalf of your
insured, driver . . . Tomasello by January 15, 2017[,] in
exchange for his release for liability. If you fail to do
so by such date, due to the obvious nature of the injuries
sustained due to the negligence of your driver, I will
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seek an offer of judgment as well as a bad faith claim
on a delay of payment.
....
I trust that after review of the enclosed records,
you will recognize that the value of the subject claim
far exceeds your client's available policy limits. Be
advised that, notwithstanding the foregoing, I am
prepared to recommend settlement for those policy
limits provided same are tendered by January 15, 2017.
Following expiration of the addressed time frame, I will
actively prepare this matter for trial and will not
thereafter consider settlement within the available
policy limits.
The foregoing offer is conditioned upon your
submission of satisfactory proof of the limits of your
client's insurance policy limits, the absence of any
excess policy, and the subrogation rights of any UIM
carrier[.]
When GEICO did not respond, Cascarino's counsel renewed the demand
for payment in a second letter dated January 13, 2017, which stated:
I trust that after your review of the enclosed
records, you can clearly recognize that the value of the
subject claim far exceeds your client's available policy
limits. My client was a pedestrian struck by YOUR
INSURED 100% NEGLIGENTLY and proximately
caused an immediate surgical emergency which
required weeks of rehabilitation, for which permanent
and significant lasting injuries will continue. Be
advised that, notwithstanding the foregoing, as stated in
my letter dated December 13, 2016, I am prepared to
recommend settlement for those policy limits provided
same are tendered by January 15, 2017. Following
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expiration of the addressed time frame, I will actively
prepare this matter trial and will not thereafter consider
settlement within the available policy limits.
GEICO responded in a letter dated January 24, 2017, confirming its
conversation with Cascarino's counsel regarding the settlement, stating:
"Enclosed is the release . . . representing the full and final settlement of your
client's injury claim." Cascarino did not sign the release. On March 1, 2017,
GEICO sent a check for $100,000 to Cascarino with the following language: "In
Payment Of Bodily Injury Coverage FULL AND FINAL PAYMENT OF ALL
CLAIMS ARISING FROM DOL 08/09/2016[.]" Cascarino's counsel signed the
check and deposited it into his attorney trust account on April 12, 2017.
On May 10, 2018, Cascarino's counsel presented a demand to Selective,
stating:
Tomasello is clearly a negligent party who was the
proximate cause for . . . Cascarino's injuries . . . .
Tomasello's GEICO liability insurance had a policy
limit of $100,000 which was tendered . . . but there is
still a substantial amount for economic loss/pain and
suffering that was clearly not covered by his GEICO
insurance. Therefore, under . . . Cascarino's
Underinsured Motorist policy coverage, we are
demanding $150,000 as compensation for his injuries
and would like to avoid unnecessary litigation.
Selective contacted Cascarino's counsel inquiring whether he had complied with
Longworth v. Van Houten, 223 N.J. Super. 174 (App. Div. 1988), and notified
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Selective regarding the settlement with GEICO. Cascarino's counsel responded
in a letter dated May 31, 2018, stating:
By letter[s] dated May 10, 2018 and May 18,
2018, you were provided with sufficient evidence that
. . . Cascarino's damages far exceed the $100,000.00
previously tendered by GEICO, the tortfeasor's liability
insurer, and the available limits available under the
underinsured portion of . . . Cascarino's Selective
Policy.
In response, you requested that I provide you
with a "[Longworth]" letter, which I assume would be
to request Selective's permission to sign a general
release, releasing the tortfeasor from any future claims
or, in the alternative, to pay the $100,000 tendered by
GEICO.
Please note that GEICO did not condition the
$100,000 payment on the signing of a general release,
so we are not seeking permission to execute one at this
time. In fact . . . Cascarino has not signed any release,
as we may also be seeking damages against the hospital
for negligence. However, please accept this letter as an
agreement to assign . . . Cascarino's claim against the
tortfeasor to you, up to the limits of our client's
underinsured motorist recovery.
In exchange for this assignment, and in
recognition of the nature and the extent of . . .
Cascarino's damages, I am again presenting you with a
settlement demand in the amount of $150,000, which
equals the limits of available underinsured motorist
coverage, reduced by the amount recovered under the
tortfeasor's liability policy.
A-1266-19T1
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Following an investigation, Selective declined coverage for Cascarino's
claim stating:
GEICO . . . issued a check in the amount of their policy
limit of $100,000 made payable to [Cascarino's
counsel] and . . . Cascarino on March 1, 2017.
[Cascarino's counsel] and . . . Cascarino endorsed the
check and it was cashed on or about 4/12/2017.
Selective was not placed on notice of [Longworth] prior
to your settlement with GEICO. You did not comply
with [Longworth]. Accordingly, as outlined below, we
must respectfully disclaim coverage[.]
....
Based upon our investigation we have identified
certain provisions of the policy which are applicable to
this claim. In this section, we will review those parts
of the policy and explain why coverage is not available
under the terms of the policy.
Selective pointed to the UIM exclusion in Cascarino's policy, which
stated: "We do not provide coverage under this endorsement for . . . 'bodily
injury' sustained by any 'insured' . . . if that 'insured' or legal representative
settles any bodily injury or property damage claim with the owner or operator
. . . without our written consent." Selective denied coverage based upon "its
conclusion that the depositing of the check from GEICO constituted an 'accord
and satisfaction' between Cascarino and Tomasello[,] which terminated
Selective's subrogation rights against Tomasello."
A-1266-19T1
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Cascarino's counsel sought reconsideration arguing "[t]he position taken
in your [June 29, 2018] response will expose Selective to [a] bad faith [claim]
because they are under an incorrect legal assumption that [Cascarino] settled the
underlying case with the tortfeasor." He repeated "[t]here has been no release
of the tortfeasor in this accident [and] simply giving $100,000 to the injured
victim WITHOUT a release does not trigger [Longworth]." Selective denied the
claim.
On July 12, 2018, Cascarino's counsel sent GEICO a letter requesting
confirmation that Cascarino did not release Tomasello from any claim of
personal liability. GEICO, through counsel assigned to Tomasello, responded:
Although no release was ever executed by . . .
Cascarino, your office endorsed and deposited the
settlement check after GEICO provided your office
with a release and affidavits of no insurance.
Accordingly, it is . . . Tomasello's position that your
client's claims against him have been fully satisfied and
released. Your contention that . . . Cascarino never
intended to release . . . Tomasello is undermined by the
simple fact that the settlement check, bearing the
statement "FULL AND FINAL PAYMENT OF ALL
CLAIMS ARISING FROM DOL [August 8, 2016],"
was endorsed and deposited by you after GEICO
provided you with affidavits of no insurance and made
clear in its January 24, 2017, letter that it would pay its
policy limits in settlement of all claims against its
insured. If it was not your intention to fully resolve all
claims against . . . Tomasello at that time, then the
check should not have been deposited. Moreover, by
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waiting more than a month to issue the check, GEICO
gave you more than sufficient time to contact Selective
. . . and advise Selective of the settlement offer and your
client's wish to accept that settlement. The obligation
to notify Selective, your client's UIM carrier, was
exclusively your client's obligation. Rutgers Cas. Ins.
v. Vassas, 139 N.J. 163, 174 (1995). In Longworth
. . . , the court held, "as a matter of future conduct, an
insured receiving an acceptable settlement offer from
the tortfeasor should notify his UIM carrier.["] . . . It
was not . . . Tomasello's responsibility to notify
Selective and any failure to preserve Selective's
subrogation rights rests solely with . . . Cascarino.
In July 2018, Selective filed a complaint naming Cascarino, Tomasello,
and GEICO as defendants. The complaint alleged "[h]ad Cascarino sought
Selective's consent to settle his claims against Tomasello, Selective would have
elected to pay Cascarino the amount of Tomasello's liability limits with GEICO
and filed a subrogation claim against Tomasello." The complaint asserted "the
cashing of the GEICO check by Cascarino served as an accord and satisfaction
of any and all claims Cascarino had or may have had against . . . Tomasello."
Selective sought declaratory judgment against Cascarino and GEICO, and
subrogation against Tomasello in the event Cascarino was not barred from
seeking UIM benefits from Selective.
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Tomasello's counsel contacted Cascarino and demanded return of the
$100,000 if Cascarino maintained there was no settlement. However, Cascarino
retained the money and on August 9, 2018, signed a release which stated:
[T]he Releasor hereby, releases and forever discharges
Releasees . . . from any and all liability of whatever type
for any and all claims of every kind, nature and
description whatsoever, whether in law or in equity,
arising out of, or in any way relating to any and all
claims, actions, causes of action, demands, rights
damages, costs . . . resulting or caused by the motor
vehicle accident involving Releasor and . . . Tomasello
on August 9, 2016[.]
Cascarino did not contact Selective or obtain approval to sign the release.
After Selective learned of the release execution, it filed an amended complaint
containing three counts for "declaratory judgment against Cascarino to the effect
that Selective does not owe Cascarino UIM benefits . . . declaratory judgment
against GEICO; and . . . subrogation against Tomasello." Cascarino
counterclaimed for breach of contract and bad faith, and sought a declaratory
judgment that he was entitled to the UIM benefits.
Cascarino and Selective each sought summary judgment. Tomasello and
GEICO sought summary judgment dismissal of the claims against them. On
October 24, 2019, Judge James H. Pickering, Jr. granted Selective's motion for
A-1266-19T1
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summary judgment, denied Cascarino's motion for summary judgment, and
granted GEICO's and Tomasello's motion for summary judgment.
The judge found Cascarino was not entitled to Selective's UIM coverage.
At the outset, the judge noted the following facts were not in dispute:
Selective was not notified of [Cascarino's] settlement
demand for GEICO's policy limits; Selective was not
notified that the check in the amount of the policy limits
had been sent by GEICO and received by Cascarino's
attorney; Selective was not notified that the GEICO
check included the notation "FULL AND FINAL
PAYMENT OF ALL CLAIMS ARISING FROM DOL
08/09/2016"; and Selective was not notified that the
check had been endorsed by Cascarino and his attorney
and deposited in his attorney's trust account. Selective
was not notified of the GEICO payment until Cascarino
sent a letter to Selective on May 8, 2018[,] and on May
18, 2018, which letters demanded the full amount of the
UIM coverage and which letter included a copy of the
GEICO check. This was [thirteen] months since the
check had been deposited.
....
Cascarino never notified Selective that GEICO
had presented him with a release that paid him the
GEICO policy limits and that released Tomasello; and
Cascarino never notified Selective that Cascarino
desired to sign the release.
The judge considered the undisputed facts and the consequences of Cascarino's
actions before he deposited GEICO's check, "after GEICO's attorney sent his
A-1266-19T1
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letter on July 26, 2018[,] which potentially opened up any settlement, and before
Cascarino signed the release."
The judge concluded there was accord and satisfaction because Cascarino
and GEICO "disagreed about how much Cascarino was entitled to for [the]
injuries he sustained[,] . . . GEICO intended its $100,000 payment to settle any
and all claims against Tomasello[,]" and Cascarino accepted GEICO's check by
depositing it. The judge found Cascarino's failure to sign the release provided
by GEICO meant there was no release, but did not negate the fact there was a
settlement. He concluded "[t]he accord and satisfaction . . . has the effect of
terminating any ability by Selective to pay Cascarino UIM benefits, and then
seek subrogation against Tomasello."
Analyzing the undisputed facts after GEICO's attorney sent a letter
demanding return of the check, the judge concluded as follows:
At this point, Cascarino was thrown a lifeline. He could
legitimately argue that there was not a settlement; even
GEICO said there was not a settlement . . . . Cascarino
could then send a Longworth letter to Selective, inform
Selective of the proposed settlement, and wait for them
to reply . . . . Instead, . . . Cascarino signed a release
without notice to Selective. The release clearly
precludes any subrogation by Selective against
Tomasello.
A-1266-19T1
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The judge concluded "Cascarino violated his duty to inform Selective as
required by [Longworth] . . . and as required by his insurance contract . . . .
Therefore, Selective is relieved of its obligation to provide UIM coverage to
Cascarino."
II.
Our review of an order granting summary judgment is de novo. Graziano
v. Grant, 326 N.J. Super. 328, 338 (App. Div. 1999). "[W]e review the trial
court's grant of summary judgment . . . under the same standard as the trial
court." Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh,
224 N.J. 189, 199 (2016). The court must consider all of the evidence submitted
"in the light most favorable to the non-moving party," and determine if the
moving party is entitled to summary judgment as a matter of law. Brill v.
Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). If the evidence
presented "show[s] that there is no real material issue, then summary judgment
should be granted." Walker v. Atl. Chrysler Plymouth, Inc., 216 N.J. Super.
255, 258 (App. Div. 1987) (citing Judson v. Peoples Bank & Tr. Co. of
Westfield, 17 N.J. 67, 75 (1954)).
On appeal, Cascarino argues he never violated Longworth. He argues that
his deposit of the GEICO check did not constitute an accord and satisfaction or
A-1266-19T1
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a release of Tomasello from liability. He asserts even if accord and satisfaction
applied, the judge should have denied summary judgment because there were
material disputes in fact regarding whether Cascarino and Tomasello had
reached a settlement manifested by mutual intent and there was no evidence of
prejudice to Selective by Cascarino depositing GEICO's check.
In Longworth, we held "an insured receiving an acceptable settlement
offer from the tortfeasor should notify his UIM carrier. The carrier may then
promptly offer its insured that sum in exchange for assignment to it by the
insured of the claim against the tortfeasor." 223 N.J. Super. at 174. In Ferrante
v. N.J. Mfrs. Ins. Grp., the Supreme Court explained the
duty to notify in the UIM context is intended to protect
a carrier's right of subrogation . . . . The law "highly
favors" subrogation as "a device of equity to compel the
ultimate discharge of an obligation by the one who in
good conscience ought to pay it." Holloway v. State,
125 N.J. 386, 394 (1991). In practice, the insurer may
choose to pay out the insured for the loss and retain a
cause of action against the tortfeasor.
....
To protect those interests, we identified the
occasions when the insured must notify the carrier: (1)
when he or she takes legal action against the tortfeasor;
(2) "[i]f, during the pendency of the claim, the
tortfeasor's insurance coverage proves insufficient to
satisfy the insured's damages"; and (3) if the insured is
seeking UIM benefits because he or she "receive[d] a
A-1266-19T1
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settlement offer . . . that does not completely satisfy the
claim, because the tortfeasor is underinsured."
[Rutgers Cas. Ins. Co., 139 N.J. at 174].
[232 N.J. 460, 469-71 (2018) (internal citations
omitted).]
We reject Cascarino's arguments that there was no accord and satisfaction
and hence no settlement for the same reasons expressed in Judge Pickering's
opinion. The undisputed facts in the record clearly show Cascarino settled with
Tomasello. The settlement was affirmed when Cascarino deposited GEICO's
check, which stated it was in full and final settlement of his injury claim, without
qualification. Cascarino's execution of the release was the final clear indicat or
he had settled the matter with Tomasello. Cascarino's conduct violated
Longworth, the clear terms of his UIM policy, and pursuant to Ferrante, deprived
Selective of its ability to pursue Tomasello by way of a subrogation action.
We also reject Cascarino's argument that Selective was required to show
it was prejudiced by Cascarino's actions in order to deny UIM coverage. As
Judge Pickering noted,
Ferrante holds otherwise. Here, Selective never had the
opportunity to exercise its rights; therefore, it is not
required to show that Cascarino's violations caused it
prejudice. By settling the case, by endorsing and
depositing the check . . . , Cascarino caused the
irretrievable loss of Selective's rights to subrogation
before Selective ever learned of the existence of the
A-1266-19T1
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claim. Then, by signing the release . . . , Cascarino
sealed Selective's fate. Pursuant to Ferrante, Selective
does not need to show prejudice in these circumstances.
We agree. The Ferrante Court rejected the insured's argument the trial
court should have considered whether "he negligently, rather than intentionally,
violated Longworth, [and] conduct a prejudice analysis [where there were] . . .
numerous landmarks where Ferrante could have, and should have, but did not
notify [his carrier of a settlement with tortfeasor]." 232 N.J. at 474. The Court
stated: "Our decision here is not rooted in Ferrante's state of mind, but rather in
his actions." Ibid. The Court concluded:
If . . . the insured, regardless of his state of mind, fails
to give the UIM carrier any notice of the UIM claim
until after the final resolution of the underlying tort
action, thereby causing the irretrievable loss of the
carrier's rights to subrogation and intervention before
the carrier has ever learned of the existence of the
claim, coverage is forfeited.
[Ibid.]
Likewise, no such analysis was required here as Cascarino's settlement of
the case extinguished Selective's subrogation claim. The undisputed facts
support summary judgment in Selective's favor. Cascarino's remaining
arguments lack sufficient merit to warrant discussion in a written opinion. R.
2:11-3(e)(1)(E).
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Affirmed.
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