Opinion
DOCKET NO. A-4789-13T3
06-08-2015
KRISTI DRYSTEN AND ROBERT DRYSTEN, her husband, Plaintiffs-Respondents, v. PAOLA N. CHIESA, Defendant, and USAA CASUALTY INSURANCE COMPANY, USAA GENERAL INDEMNITY COMPANY and UNITED SERVICES AUTOMOBILE ASSOCIATION, Defendants-Appellants.
William J. Pollinger argued the cause for appellants. Andrew A. Fraser argued the cause for respondents (Laddey, Clark & Ryan, L.L.P., attorneys; Mr. Fraser and Jessica A. Jansyn, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fuentes, Ashrafi and O'Connor. On appeal from Superior Court of New Jersey, Law Division, Sussex County, Docket No. L-0452-11. William J. Pollinger argued the cause for appellants. Andrew A. Fraser argued the cause for respondents (Laddey, Clark & Ryan, L.L.P., attorneys; Mr. Fraser and Jessica A. Jansyn, on the brief). PER CURIAM
By leave granted, defendants USAA Casualty Insurance Company, USAA General Indemnity Company, and United Services Automobile Association (collectively USAA) appeal an interlocutory order denying their motions for summary judgment. We reverse.
I
On September 1, 2012, defendant Paola N. Chiesa struck and injured plaintiff Kristi Drysten with his car. Plaintiffs settled their personal injury claim against him for $100,000, the limit of his automobile liability insurance coverage. Plaintiff thereafter sought uninsured/underinsured motorist (uninsured) benefits from their automobile insurance policy, which had been issued by USAA. Although plaintiffs claim that, on March 1, 2007, they requested USAA to provide the maximum coverage possible under their policy, after the September 1, 2010 accident they discovered that their uninsured benefits were only $100,000/300,000. The maximum amount of uninsured motorist benefits plaintiffs could have obtained on March 1, 2007 was $500,000/$1,000,000.
In certain parts of USAA's declaration pages and coverage selection forms, there is reference to only "uninsured" motorist coverage. It is not disputed that these references to uninsured motorist benefits subsume underinsured motorist benefits. Therefore, any reference in this opinion to uninsured benefits is intended to also reference underinsured motorist benefits.
Plaintiffs seek reformation of the policy to provide $500,000/$1,000,000 in uninsured benefits retroactive to March 1, 2007. They also seek damages against USAA for breach of contract and for violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, for failing to provide the coverage requested on March 1, 2007. The background is as follows.
Mr. Drysten, who for simplicity shall be referred to as "plaintiff" for the balance of this opinion, obtained a standard automobile policy from USAA in 1998. The coverage selection form he signed on July 15, 1998, shows that, in addition to selecting other benefits, he chose $100,000/$300,000 for bodily injury liability coverage, $100,000/$300,000 for uninsured motorist coverage, and $25,000 in coverage for property damage. Immediately following that part of the coverage selection form where plaintiff checked-off the amount of uninsured motorist coverage he wanted, the following language appears, in capital letters:
NOTE INSURANCE COMPANIES OR THEIR PRODUCERS OR REPRESENTATIVES SHALL NOT BE HELD LIABLE IN AN ACTION FOR DAMAGES EITHER ON ACCOUNT OF THE CHOICE OF A GIVEN LEVEL OF MOTOR VEHICLE INSURANCE COVERAGE MADE BY AN INSURED, AS LONG AS THOSE LIMITS PROVIDE AT LEAST THE MINIMUM COVERAGE REQUIRED BY LAW, OR ON ACCOUNT OF THE INSURED CHOOSING NOT TO
PURCHASE UNDERINSURED MOTORIST COVERAGE, COLLISION COVERAGE OR COMPREHENSIVE COEVERAGE, EXCEPT FOR DAMAGES CAUSED AS THE RESULT OF A WILLFUL, WANTON OR GROSSLY NEGLIGENT ACT OF COMMISSION OR OMISSION.
Just above his signature, the following language appears, also in capital letters:
I HAVE READ THE BUYERS GUIDE OUTLINING THE COVERAGE OPTIONS AVAILABLE TO ME. THE LIMITS AVAILABLE FOR UNINSURED AND UNDERINSURED MOTORISTS COVERGE HAVE BEEN EXPLAINED TO ME. MY CHOICES ARE SHOWN ABOVE. I AGREE THAT EACH OF THESE CHOICES WILL APPLY FOR ALL VEHICLES INSURED BY MY POLICY AND TO EACH SUBSEQUENT RENEWAL, CONTINUATION, REPLACEMENT OR AMENDMENT UNTIL USAA RECEIVES MY REQUEST THAT A CHANGE BE MADE. . . .
I UNDERSTAND THAT IF THIS IS A POLICY RENEWAL AND I DO NOT COMPLETE CHOICES, I WILL RECEIVE THE SAME COVERAGE AS IN MY PREVIOUS POLICY . . . .
Plaintiff renewed his policy with USAA every year thereafter through the time of the accident. It is not disputed that, just before he renewed his policy each year, USAA mailed him a declaration page, a buyer's guide, and a blank coverage selection form. But for checking to make sure the declaration page correctly reflected his and his wife's name, their address, the cars they were insuring, and the total cost of coverage, plaintiff did not read any of the materials forwarded to him.
On March 1, 2007, plaintiff telephoned USAA and requested that the policy provide the "max protection for my family." At the time plaintiff requested this change, the policy was not due to expire until July 17, 2007 and thus the changes he sought were being requested mid-term. The customer service representative responded that one million dollars in coverage was "the max."
After a supervisor got on the telephone to discuss the amount of coverage sought, it was plaintiff's understanding that he was going to have one million dollars in coverage for "anything that could happen as far as accident, injury, liability, . . . excluding collision and comprehensive [which] I understood to be different." However, plaintiff also testified that he could not recall if the customer service representative said that his coverage would increase to one million dollars for all benefits, but for collision and comprehensive benefits, or just one benefit. There was no discussion about increasing uninsured motorist benefits.
At his deposition the customer service representative testified that plaintiff requested that only coverage for bodily injury be increased. However, because this is USAA's motion for summary judgment, we must accept as true plaintiff's deposition testimony. See R. 4:46-2(c).
On March 7, 2007, USAA mailed plaintiff an "automobile adjustment policy packet," which consisted of a declaration page and a cover sheet that directed plaintiff to review the declaration page to determine if the coverage he selected met his needs. USAA did not forward a coverage selection form. The declaration sheet indicated that there had been an adjustment to the bodily injury and property damage coverage limits effective March 2, 2007. Specifically, the declaration page indicates that the coverage for bodily injury was $500,000/$1,000,000, and the coverage for property damage was $100,000. There were no other adjustments to the policy. Uninsured motorist coverage remained at $100,000/$300,000.
As the annual renewal date of July 17, 2007 approached, on June 15, 2007, USAA mailed plaintiff a declaration page, a buyer's guide, and a blank coverage selection form for plaintiff's use in the event he wanted to make any changes to his policy upon renewal. The cover letter that accompanied these documents stated, in pertinent part:
Refer to your Declarations Page and endorsements to verify that coverages, limits, deductibles and other policy details are correct and meet your insurance needs. Required information forms are also enclosed for your review. . . .
We have your signed New Jersey Coverage Selection Form, which is kept as part of your policy record. We've enclosed a blank
copy of the form. Complete, sign and return the enclosed form only if you want to change your coverage. . . .
Your renewal policy contains some important changes. Please read the attached form, IMPORTANT CHANGES TO YOUR AUTO POLICY, for details about these changes. . . .
If you have any concerns or need to modify or cancel the renewal policy, please contact us immediately.
[(Emphasis added).]
The declaration page reflected the same coverage limits as had appeared on the declaration page forwarded to plaintiff the previous March. The buyer's guide that was forwarded, which was only ten pages in length, explained the different types of coverages available, including uninsured coverage, in terms a layperson could understand. The buyer's guide also mentioned that an insured could have uninsured motorist coverage that was equal to one's liability coverage. The blank coverage selection form, which was six pages in length, set forth in simple terms the different coverage levels available for each kind of benefit.
It is not disputed that, from 1998 to July 2010, plaintiff received a declaration page, a buyer's guide and coverage selection form at the time of renewal every year. Each declaration page indicated the uninsured motorist coverage was $100,000/$300,000. The coverage selection forms clearly showed that there were higher levels of uninsured motorist coverage available than $100,000/$300,000.
USAA filed a motion for summary judgment claiming it was immune from liability under N.J.S.A. 17:28-1.9. USAA further argued that, even if it were not immune, plaintiffs could not show they were entitled to reformation of the policy or damages for breach of contract or violation of the CFA.
Plaintiffs argued USAA is not immune from liability because it had engaged in the willful and wanton act of deliberately failing to increase plaintiffs' uninsured motorist benefits following the March 1, 2007 telephone call. Plaintiffs contended that USAA did not want to provide greater uninsured motorist benefits because it was not realizing a profit from providing such benefits to insureds. The basis for plaintiffs' claim was that, in approximately twenty-seven percent of the USAA automobile insurance policies issued between January 1, 2007 and December 31, 2010, the insured's bodily injury coverage was unequal to the uninsured motorist coverage.
Plaintiffs contended that discovery on this issue has been stayed. In support of their claim that discovery has been stayed, plaintiffs refer to a written decision appended to an August 29, 2013 order. However, neither the decision nor the August 29, 2013 order mentions that discovery was stayed. In fact, the August 29, 2013 order states that discovery was extended sixty days.
On April 30, 2014, the trial court entered an order denying USAA's motion for summary judgment. On June 23, 2014, we granted USAA's motion for leave to appeal this interlocutory order.
II
Our review of a ruling on summary judgment is de novo. Parsons v. Mullica Twp. Bd. of Educ., 440 N.J. Super. 79, 83 (App. Div. 2015). We apply the same legal standard as the trial court. Ibid. Summary judgment is appropriate where "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." R. 4:46-2(c).
When determining whether there is a genuine issue of material fact, the court must consider "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Here, even when viewing the evidence in the light most favorable to plaintiff, we conclude that not only is there no genuine issue of material fact, but also USAA is entitled to summary judgment as a matter of law because it is immune from liability under N.J.S.A. 17:28-1.9.
N.J.S.A. 17:28-1.9 states in pertinent part:
a. [N]o . . . insurer . . . shall be liable in an action for damages on account of the election of a given level of motor vehicle insurance coverage by a named insured as long as those limits provide at least the minimum coverage required by law or on account of a named insured not electing to purchase underinsured motorist coverage, collision coverage or comprehensive coverage. Nothing in this section shall be deemed to grant immunity to any person causing damage as the result of [its] willful, wanton or grossly negligent act of commission or omission.
b. The coverage selection form required pursuant to [N. J.S.A. 39:6A-23] shall contain an acknowledgement by the named insured that the limits available to him for uninsured motorist coverage and underinsured motorist coverage have been explained to him and a statement that no . . . insurer . . . shall be liable in an action for damages on account of the election of a given level of motor vehicle insurance coverage by a named insured as long as those limits provide at least the minimum coverage required by law or on account of a named insured not electing to purchase underinsured motorist coverage, collision coverage or comprehensive coverage, except for that person causing damage as the result of [its] willful, wanton or grossly negligent act of commission or omission.
N.J.S.A. 17:28-1.9 was enacted "to abrogate prior judicial decisions holding insurers, agents, and brokers liable for failing to advise their customers of the availability of additional underinsured and uninsured motorist coverage[,]" and to quell the "explosion of litigation by providing blanket immunity except in cases of willful, wanton, or gross negligence." Strube v. Travelers Indem. Co., 277 N.J. Super. 236, 237, 242 (App. Div. 1994), aff'd o.b., 142 N.J. 570 (1995).
The requirements for obtaining immunity under N.J.S.A. 17:28-1.9 are that (1) the named insured must have had at least the minimum coverage required by law; (2) the insurer must not have caused the insured's alleged damages by any willful, wanton or grossly negligent act of commission or omission; and (3) the insurer must have complied with the coverage selection requirements of N.J.S.A. 17:28-1.9(b). Baldassano v. High Point Ins. Co., 396 N.J. Super. 448, 453-54 (App. Div. 2007) (citing Pizzullo v. N.J. Mfrs. Ins. Co., 391 N.J. Super. 113, 118 (App. Div. 2007), rev'd on other grounds, 196 N.J. 251 (2008). In addition, an insurer must have obtained an insured's acknowledgement that the available underinsured and underinsured coverage limits were explained to him, and that the insurer will not be liable for the insured's selection of coverage that was chosen in accordance with subsection (a) of the immunity statute. N.J.S.A. 17:28-1.9(b).
The coverage selection requirements referenced in N.J.S.A. 17:28-1.9(b) are set forth in N.J.S.A. 39:6A-23. This latter statute mandates that when applying for a new or renewing an automobile policy, a "'written notice identifying [all coverage information] and containing a buyer's guide and a coverage selection form'" must be provided to the named insured. Baldassano, supra, 396 N.J. Super. at 454 (citing N.J.S.A. 39:6A-23(a) and (c)).
If applying for a new policy, the insured must check-off the options he has elected on the coverage selection form, and then sign and return the form to the insurer. N.J.S.A. 39:6A-23(a); N.J.A.C. 11:3-15.7(a). A completed, executed coverage selection form is "prima facie evidence of the insured's knowing election or rejection of any option." N.J.S.A. 39:6A-23(e).
An insured is not required to complete, sign and return a coverage selection form upon the renewal of a policy unless he wishes to make a change to that policy, see Kimba Med. Supply v. Allstate Ins. Co., 431 N.J. Super. 463, 492 (App. Div. 2013), certif. granted, 217 N.J. 286 (2014); Baldassano, supra, 396 N.J. Super. at 455, except under the following circumstance. If an insured renews a policy over the telephone and coverage is bound at that time, the insurer must, if the insured agrees, send to the insured within five business days after the telephonic transaction a buyer's guide, a completed coverage selection form showing the coverage choices the insured made, and a copy of the Automobile Insurance Consumer Bill of Rights. N.J.A.C. 11:3-15.4(a)(3). An insured may, if desired, alter the coverage indicated on the form that had been completed by the insurer by returning to the insurer a signed coverage selection form setting forth the changes he wants. Ibid.
An insurer must obtain a signed coverage selection form from an insured if he seeks any of the following during the term of a policy as opposed at the time of renewal: an alteration of the policy type to standard or basic; a change in the limitation-on-lawsuit threshold, see N.J.S.A. 39:6A-8(a); a change in primary coverage for PIP medical expense benefits coverage; a change in the PIP medical expense coverage limit; or an addition or deletion of liability coverage in a basic policy. N.J.A.C. 11:3-15.7(a)-(b).
Here, as for meeting the requirements for immunity under N.J.S.A. 17:28-1.9, plaintiff maintained more than the minimum coverage required by law. USAA complied with the coverage selection requirements of N.J.S.A. 17:28-1.9(b). When plaintiff initially applied for automobile liability insurance from USAA in 1998, he was given, among other things, a buyer's guide and a blank coverage selection form in compliance with N.J.S.A. 39:6A-23. He completed, executed, and delivered to USAA a coverage selection form at that time. The coverage selection form included the acknowledgements required by N.J.S.A. 17:28-1.9(b). Before each annual renewal of the policy, USAA sent plaintiff another buyer's guide and coverage selection form.
Plaintiff contends that USAA was obligated to obtain a signed coverage selection form from plaintiff following the March 1, 2007 telephone call, but there is no authority to support this argument. The telephone call occurred mid-term. N.J.A.C. 11:3-15.7 does not require an insurer to secure an executed coverage selection form from an insured when a change is made to a policy mid-term except under very limited circumstances, none of which existed here.
When plaintiff renewed the policy on July 17, 2007, the insurer was not obligated to obtain a coverage selection form from him. See Kimba Med. Supply, supra, 431 N.J. Super. at 492. The circumstance under which an insurer must obtain a coverage selection form from an insured at the time of the renewal on July 17, 2007, did not exist. See N.J.A.C. 11:3-15.4(a)(3). Plaintiff had the option to submit a completed coverage selection form at the time of renewal if he wished to change the coverage that had been in effect since the previous March, but USAA was not obligated to obtain an executed form from plaintiff at that time.
Plaintiffs assert USAA engaged in willful and wanton conduct by deliberately failing to increase uninsured motorist benefits on March 1, 2007, and, thus, is not immune from liability under N.J.S.A. 17:28-1.9. But even if USAA had engaged in willful and wanton conduct, that conduct has to have caused plaintiffs' alleged damages in order for USAA to lose the protection afforded by this statute. Under these particular circumstances, USAA was not the cause of plaintiffs' damages.
First, the "legislative and regulatory design [behind N.J.S.A. 39:6A-23] 'was to create a milieu in which New Jersey insureds would inform themselves about available coverage from the written notice and buyer's guide and make intelligent choices based on that information . . . .'" Strube, supra, 277 N.J. Super. at 240 (quoting Avery v. Arthur E. Armitage Agency, 242 N.J. Super. 293, 305 (App. Div. 1990)). Second, a declarations page is "the one page of the policy tailored to the particular insured and not merely boilerplate." Lehrhoff v. Aetna Cas. and Sur. Co., 271 N.J. Super. 340, 347 (App. Div. 1994). The conduct expected from an insured is that of "a conscientious policyholder, [who] upon receiving the policy [examines] the declaration page to assure himself that the coverages and their amounts . . . accord with his understandings of what he is purchasing." Id. at 346-47.
Third, and most important, as an insured, plaintiff was under a duty to examine his insurance documents and to notify the insurer if there was a discrepancy between what he requested and what the insurer provided. Martinez v. John Hancock Mut. Life Ins. Co., 145 N.J. Super. 301, 310 (App. Div. 1976), certif. denied, 74 N.J. 253 (1977); Millhurst Milling & Drying Co. v. Auto. Ins. Co., 31 N.J. Super. 424, 435 (App. Div. 1954).
Here, despite requesting USAA to provide the maximum coverage for all but collision and comprehensive benefits, none of the declaration pages issued thereafter reflected any change to the coverage limits except for bodily injury and property damage. It cannot be said that USAA obscured the fact that the alleged requested changes had not been made. Even a cursory glance at the declaration pages issued after March 1, 2007, would have revealed that USAA failed to make all of the changes plaintiff wanted. It was patently obvious from the coverage selection forms issued after March 1, 2007 that coverage greater than $100,000/$300,000 was available for uninsured motorist benefits. The buyer's guides sent to plaintiff prominently stated that he could have obtained coverage for uninsured motorist benefits equal to his liability coverage.
Plaintiff repeatedly breached his duty to review the declaration pages and other documents USAA provided to him, which were specifically designed to enlighten him about his policy and the coverages available. Plaintiff was obligated to alert USAA of the inconsistencies between what he wanted and what was in his policy. Under these circumstances, we cannot say USAA's conduct here was the cause of plaintiff's damages.
As observed by the Supreme Court, the Legislature intended that N.J.S.A. 17:28-1.9 confer immunity
in circumstances relating to an insured's election of UIM coverage when the insured attempts to later shift the blame for a decision to opt for any level of coverage less than the maximum back onto the insurer, as long as the insurer has complied with its obligations to make known the availability of all possible limits as required by the statute.Even if USAA, intentionally or otherwise, failed to increase plaintiffs' uninsured motorist benefits in March 2007, plaintiffs are deemed to have known of the error and they failed to take any action. In the final analysis, plaintiffs are the cause of their alleged damages. Accordingly, USAA is immune from plaintiffs' claims under N.J.S.A. 17:28-1.9.
[Pizzullo v. N.J. Mfrs. Ins. Co., 196 N.J. 251, 268 (2008).]
To the extent that any arguments raised by plaintiffs have not been explicitly addressed in this opinion, it is because we have concluded the arguments lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Reversed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION