KENNETH DOCTORS VS. NEW JERSEY MANUFACTURERS INSURANCE COMPANY (L-4991-18, MIDDLESEX 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NOT FOR PUBLICATION WITHOUT THE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-2898-18T3
KENNETH DOCTORS and
CANDACE DOCTORS,
Plaintiffs-Appellants,
v.
NEW JERSEY MANUFACTURERS
INSURANCE COMPANY,
Defendant-Respondent.
______________________________
Argued March 4, 2020 – Decided April 3, 2020
Before Judges Suter and DeAlmeida.
On appeal from the Superior Court of New Jersey, Law
Division, Middlesex County, Docket No. L-4991-18.
Phillip C. Wiskow argued the cause for appellants
(Gelman Gelman Wiskow & McCarthy, LLC,
attorneys; Phillip C. Wiskow, on the brief).
Daniel J. Pomeroy argued the cause for respondent
(Pomeroy Heller & Ley, LLC, attorneys; Daniel J.
Pomeroy and Karen E. Heller, on the brief).
PER CURIAM
Plaintiffs Kenneth and Candace Doctors appeal the January 25, 2019
summary judgment order that dismissed their complaint against defendant New
Jersey Manufacturers Insurance Company (NJM), finding NJM had no
obligation to provide underinsured motorist (UIM) coverage for a motor vehicle
accident on January 5, 2010, because the statute of limitations expired . We
affirm the trial court's order.
I.
Kenneth Doctors was involved in a motor vehicle accident with Mary
Staeger on January 5, 2010. He was insured under a private passenger
automobile insurance policy issued by NJM. Plaintiffs sued Staeger in 2011 fo r
personal injuries that they attributed to the accident. Staeger's insurance policy
included a $100,000 limit for bodily injury liability coverage. Plaintiffs' policy
included $300,000 in UIM coverage.
On August 21, 2013, plaintiffs' attorney wrote to NJM for permission to
settle the claim against Staeger for $99,000. In this "Longworth"1 letter, counsel
stated it was "my client's intention to pursue underinsured motorist benefits
under . . . [his] policy." The letter advised NJM that the tortfeasor had a
1
Longworth v. VanHouten, 223 N.J. Super. 174 (App. Div. 1988).
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$100,000 policy. It was counsel's intention to settle with the tortfeasor for
$99,000 in exchange for a "General Release." The letter advised NJM that
counsel would "[p]roceed with underinsured motorist arbitration proceedings in
the event I am unable to settle my client's UIM claim with NJM." Counsel added
if NJM did not respond in thirty days, he would forward it the General Release
"and demand arbitration of my client's UIM claim." Counsel authorized NJM
to review the personal injury protection (PIP) file "for purposes of evaluating
the UIM claim."
NJM approved plaintiffs' request to settle against Staeger for $99,000.
NJM's September 10, 2013 letter requested "[i]n reference to the potential UIM
claim," a copy of the "demand package" sent to Staeger's carrier; the name,
address and phone number of plaintiffs' family doctor and a signed authorization
for that doctor's records; and authorization to review the PIP file. After a follow -
up letter, plaintiffs' attorney provided the signed release and authorization to
review the PIP file in December 2013.
After this, NJM sent eight letters to plaintiffs' attorney—starting in March
2014 and continuing to December 2015—asking for information about Kenneth
Doctors' current status, his medical bills and reports, an authorization for family
doctor records and to schedule an independent medical examination (IME).
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Plaintiffs' attorney did not respond to any of these letters or provide the
information requested.
The statute of limitations for plaintiffs' UIM claim expired on January 5,
2016, six years after the date of the accident with Staeger. NJM did not inform
plaintiffs' attorney about the statute of limitations prior to its expiration.
Following his phone call to NJM in January 2018, plaintiffs' newly
retained attorney wrote to NJM on February 15, 2018, advising that once NJM
had agreed to arbitrate the case, the statute of limitations was stayed. Plaintiffs
took the position "an insurer cannot defeat an insured's UIM claim by failing to
act on a formal demand within six . . . years of the date of the accident and then
raise the bar of the statute of limitations when the insured files suit." Plaintiffs'
counsel advised suit would be filed in the near future requesting damages and
pre-judgment interest.
In August 2018, plaintiffs filed an order to show cause requiring NJM to
show cause why they were not entitled to arbitration of their UIM claim. The
verified complaint, requesting a declaratory judgment, asserted that "a demand
for arbitration was made years ago[,]" citing only to the August 21, 2013 letter
from the former attorney. NJM opposed the requested relief, claiming among
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other defenses, the statute of limitations had expired. The order to show cause
was denied and a limited period was provided for discovery.
In its subsequently filed motion for summary judgment, seeking a
declaration it had no obligation to provide UIM coverage, NJM argued plaintiffs'
"present UIM claim is barred by the expiration of the statute of limitations." It
contended plaintiffs' counsel did not respond to it, or provide "status updates or
other information, never formally demanded arbitration, and never named an
arbitrator on plaintiffs' behalf." NJM argued plaintiffs' counsel did not go
forward with UIM proceedings as he had indicated in the August 21, 2013 letter.
Plaintiffs' cross-motion for summary judgment alleged that once NJM was
advised about their UIM claim and correspondence was exchanged about it,
NJM had a duty to advise plaintiffs it would rely on the statute of limitations
defense. They contended they sent NJM discovery from the Staeger case, and
that Kenneth Doctors had a PIP examination after the 2010 accident. In
December 2018, plaintiffs provided NJM with additional discovery information
including medical records, reports and an IME report from plaintiffs' case
against Staeger.
NJM's motion for summary judgment was granted on January 25, 2019
and plaintiffs' cross-motion for summary judgment denied, dismissing the
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verified complaint. The trial court found that by the time the six-year statute of
limitations under N.J.S.A. 2A:14-1 expired on January 5, 2016, plaintiffs had
not formally demanded arbitration or filed a UIM claim against NJM. Although
plaintiffs' prior attorney asked for approval to settle with Staeger, the trial court
found that letter "made no mention of arbitration in any certain terms . . . ."
Rather, it stated the attorney's intention to "proceed with underinsured motorist
arbitration proceedings in the event [he would be] unable to settle [his] client's
UIM claim with NJM." (alterations in original). The trial court found this was
not a formal demand for arbitration. It presumed the failure of a predicate act—
attempting settlement with NJM. It also assumed NJM was "first provided with
information it request[ed] and need[ed] to evaluate the UIM claim in order to be
in a position to settle and resolve it short of arbitration." The trial court found
application of the statute of limitations was "warranted and necessary" to relieve
NJM from being required to "litigate a stale claim."
On appeal, plaintiffs argue the trial court's order granting summary
judgment to NJM should be reversed because the decision is contrary to the
Supreme Court's holding in Price v. New Jersey Manufacturers Insurance Co.,
182 N.J. 519 (2005).
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II.
We review a court's grant of summary judgment de novo, applying the
same standard as the trial court. Conley v. Guerrero, 228 N.J. 339, 346 (2017).
Summary judgment must be granted "if the pleadings, depositions, answers to
interrogatories and admissions on file, together with the 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." Templo
Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189,
199 (2016) (quoting R. 4:46-2(c)). "Whether 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. 2006).
A six-year statute of limitations applies to UIM claims, which "begins to
run from the date of the accident." Price, 182 N.J. at 524 (citing Green v.
Selective Ins. Co. of Am., 144 N.J. 344, 354 (1996). "[T]he purpose of statutes
of limitations is to protect defendants from unexpected enforcement of stale
claims by plaintiffs who fail to use reasonable diligence in prosecuting their
claims." Hainthaler, 387 N.J. Super. at 327 (quoting LaFage v. Jani, 166 N.J.
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412, 423 (2001)). The parties do not dispute the statute of limitations for
plaintiffs' UIM claim expired six years after the date of the accident.
Plaintiffs argue their August 2013 letter satisfied the requirement under
their policy to provide notice to NJM of its claim for UIM coverage and
arbitration. Plaintiffs rely on Price, 182 N.J. at 522, to support their arguments.
In Price, the plaintiff was insured by NJM for uninsured motorist (UM)
coverage. Id. at 521. His attorney alerted NJM to "[p]lease establish an
uninsured motorist claim file." Id. at 522 (alternation in original). Shortly after,
he wrote that he would like "to proceed with [his] client's uninsured motorists
claim." Ibid. (alternation in original). Over the next three years, Price's
attorney sent NJM various documents that NJM requested. Id. at 526. When
arbitration was not scheduled, the plaintiff filed a complaint seeking to compel
arbitration, but by that time the statute of limitations had expired and NJM
opposed the requested relief. Id. at 523.
The Supreme Court held in Price that the statute of limitations was
equitably tolled. Notably, the Court did not hold that the content of the
plaintiff's letters by themselves were enough to prevent the running of the statut e
of limitations. Price is an equitable tolling case. Not only had the plaintiffs'
counsel written to NJM explaining he would be presenting a UM claim, NJM
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exchanged correspondence and information with him for three years. It was in
that context that the Court held "[i]t was not reasonable for NJM to sit back" and
then "deny [the] plaintiff’s claim because he failed to file a complaint in
Superior Court or request arbitration prior to the running of the six-year statute
of limitations." Id. at 526.
The Court observed in Price that NJM's insurance contract included an
"implied covenant of good faith and fair dealing." Ibid It found "NJM had a
duty of good faith to notify plaintiff if it disagreed with his understanding that
NJM was duly acting upon his filed claim." Ibid. The Court expressly did not
require the carrier to provide advance notice in each case where it intended to
raise the statute of limitations defense. Id. at 528.
Price is distinguishable from the present appeal. Plaintiffs' letter
referenced an intention to request arbitration in the future if he were not able to
settle with NJM. In the August 2013 letter, he stated he would "[p]roceed with
underinsured motorist arbitration proceedings in the event I am unable to settle
my client's UIM claim with NJM." He added that if NJM did not respond in
thirty days, he would forward it the General Release "and demand arbitration of
my client's UIM claim." No such demand was forthcoming.
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NJM approved the request to settle with Staeger. Its September 10, 2013
letter referred to plaintiffs' "potential UIM claim" and requested information,
only a portion of which was ever provided. On this record, we agree with the
trial court there was never a written demand for arbitration. No arbitrator wa s
named. The letter from plaintiffs' counsel provided that arbitration was
contingent on settlement negotiations. There is no information that there were
any settlement efforts by plaintiffs.
There are no facts in this case to support an equitable tolling of the statute
of limitations' application. There was no record of contact or correspondence
from plaintiffs' attorney about this claim from December 2, 2013 until January
2018, when plaintiffs' new attorney called NJM and then wrote on February 15,
2018, demanding that arbitration be scheduled. By this time, the January 5,
2016 statute of limitations for filing a UIM claim had come and gone. There
was no evidence that plaintiffs relied on any action by NJM to change their
position.
Plaintiffs have not asserted any other basis to toll the statute of limitations.
We agree with the trial court the six-year statute of limitations applied to bar
plaintiffs' request for arbitration of their UIM claim and that there was no
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equitable basis to toll application of the statute of limitations. Price did not
require NJM to advise plaintiffs that the statute of limitations was expiring.
Affirmed.
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