Summary
finding that insurer's letter was an unequivocal denial where it stated that it "denies liability for this claim" and that the insured "must institute litigation within 12 months from the date of this letter should you contest our position," even though it invited the insured to "supply additional documentation"
Summary of this case from Boisvert v. State Farm Fire & Cas. Co.Opinion
DOCKET NO. A-5193-11T2
03-19-2013
WILLIAM H. ZAUN, Plaintiff-Appellant, v. FRANKLIN MUTUAL INSURANCE COMPANY, Defendant-Respondent.
Mark S. Kancher argued the cause for appellant. Matthew G. Minor argued the cause for respondent (Sweet Pasquarelli, P.C., attorneys; Mr. Minor, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Fisher and Alvarez.
On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-1000-12.
Mark S. Kancher argued the cause for appellant.
Matthew G. Minor argued the cause for respondent (Sweet Pasquarelli, P.C., attorneys; Mr. Minor, on the brief). PER CURIAM
Plaintiff William H. Zaun appeals the June 8, 2012 grant of summary judgment to defendant Franklin Mutual Insurance Company (FMI). The Law Division judge found, as the basis for dismissal of plaintiff's complaint, that he had not filed within the one- year suit limitation period specified in his homeowner's policy. We affirm.
I
Plaintiff owns property located in Maple Shade, insured by FMI. On July 27, 2010, plaintiff discovered water damage to the premises, alleged in his complaint to be in excess of $75,000, caused by a broken feed line to a toilet. The ensuing claim was denied by FMI because section four of plaintiff's homeowner's policy provides that if the insured premises had been vacant for sixty days or more, coverage was "suspended."
The declination letter forwarded to plaintiff by FMI's adjuster, Decker Associates, on November 12, 2010, states as follows:
[FMI] respectfully denies liability for this claim.
Please be advised, that pursuant to N.J.A.C. 11:2-17, you must institute litigation within 12 months from the date of this letter should you contest our position.
You also have the right to appeal our decision within 30 days of the date of this letter. You must provide us with reasons for this appeal in writing and attach all documentation in support of your position. The company will review your appeal and notify you in writing no later than 10 working days after receipt of your written appeal.
Send your appeal and documentation to: FMI Insurance Companies, PO Box 400,
Branchville, NJ 07826, Attention: Internal Appeals.
In making this denial of liability, [FMI] waives no terms or provision of the policy of insurance. Furthermore, all rights and defenses now known or which may become available in the future are expressly reserved.
If you have any additional pertinent documentation to present, please submit to this office for review. We welcome the opportunity to review the complete copies of gas, electric, water and other invoices that you wish to present. They must be full copies and not just monthly statements. Any other paperwork you wish to present will be reviewed on their merits.
If you wish to appeal this decision without any additional documentation or information to present beforehand, your appeal should be directed as noted above.
On December 21, 2011, more than one year after the date of the adjuster's letter, plaintiff wrote to FMI requesting an internal appeals panel review. Despite the untimeliness of the request, FMI reviewed the claim and on January 12, 2012, again denied coverage. Plaintiff's complaint followed on February 27, 2012, on theories of both breach of contract and bad faith.
FMI moved for summary judgment based on plaintiff's breach of the one-year suit limitation provision contained in a policy section titled "Sections I and II — General Conditions." It reads: "No action may be brought against [FMI] until all conditions in this policy are complied with, and unless brought within 12 months after [its] denial of either the entire claim or that part of the claim in dispute . . . ." (emphasis added).
Plaintiff raises the following points of error for our consideration:
A. [Plaintiff]'s Complaint was Timely Filed.
B. [FMI]'s Motion for Summary Judgment Should Have Been Denied as both Premature and Because There Were Genuine Issues of Material Facts Raised on the Motion.
II
An appellate court uses the same standard as the trial court in reviewing an order granting or denying summary judgment. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div), certif. denied, 154 N.J. 608 (1998). This standard, embodied in Rule 4:46-2(c), provides that summary judgment should be granted in favor of the moving party
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.In deciding 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 dispute in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Where "the evidence 'is so one-sided that one party must prevail as a matter of law' the . . . court should not hesitate to grant summary judgment." Ibid. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202, 214 (1986)). Interpretation of a contract is a purely legal question suitable for decision on a motion for summary judgment. Spaulding Composites Co., Inc. v. Liberty Mut. Ins. Co., 346 N.J. Super. 167, 173 (App. Div. 2001), rev'd on other grounds sub nom. Spaulding Composites Co., Inc. v. Aetna Cas. & Sur. Co., 176 N.J. 25 (2003), cert. denied, 540 U.S. 1142, 124 S.Ct. 1061, 157 L.Ed.2d 953 (2004).
In this case, the trial judge did not find a disputed issue of material fact. Neither did he conclude that any reasonable interpretation of the relevant language in the homeowner's policy, regarding the time limitation, permitted plaintiff to prevail. Plaintiff asserts to the contrary, arguing both that the letter from Decker Associates was either ambiguous or misleading, a disputed issue of fact, and that summary judgment was granted prematurely as a matter of law because discovery should have been completed prior to summary judgment. These points lack merit.
In Matos v. Farmers Mutual Fire Insurance Company of Salem County, 399 N.J. Super. 219 (App. Div. 2008), a case similar to this one, the declination letter read "[i]f you disagree with our determination, please be advised that pursuant with N.J.A.C. 11:2-17, litigation must be instituted within 12 months of the date of this letter." Id. at 122. The Matos letter continued: "[w]e must point out that your request for appeal does not waive any of the terms, provisions or conditions under the policy, including but not limited to the time limit for filing suit . . . ." Ibid. We found that language to unequivocally put plaintiff on notice of the limitation period even though he had never received the full policy and claimed to be unaware of the limitation period. Id. at 227. In Matos, we affirmed the trial court's grant of summary judgment dismissing the complaint as untimely. Id. at 228.
Contending that Matos does not control, plaintiff urges us to rely instead on Azze v. Hanover Insurance Company, 336 N.J. Super. 630 (App. Div.), certif. denied, 168 N.J. 292 (2001). The declination letter in that case, however, did not spell out the twelve-month time frame. Instead, that declination letter invited the submission of new information, explained a policy holder's right to contact the Department of Insurance (DOI) about the claim, and was written while the parties were negotiating regarding structural damage, which while separate, arose from the same incident. Id. at 634. We opined that the letter could have "reasonably [led] a person to conclude that contact with DOI was actually a prerequisite to a lawsuit," and that "a reasonable insured might well believe that the limitations period would not restart until after the [related] structural damage claim was settled." Id. at 642, 643.
The letter in this case tracks the language in Matos. It clearly denies coverage: "[FMI] respectfully denies liability for this claim." It explains "that pursuant to N.J.A.C. 11:2-17, you must institute litigation within 12 months from the date of this letter should you contest our position." The only reasonable interpretation of the language is that the limitation period commenced to run on November 12, 2010, for a term of one year. Plaintiff is bound by that language, which mirrors the language of the policy from which the time frame was drawn. See Matos, supra, 399 N.J. Super. at 227.
Plaintiff also contends that FMI, by accepting his internal appeal beyond the thirty-day time frame, effectively waived the twelve-month limitation period. This argument too must fail. The initiation of an internal appeal was not a prerequisite to filing suit. As the letter stated, "[y]ou also have the right to appeal our decision within 30 days of the date of this letter." (Emphasis added). That FMI accepted the internal appeal beyond the thirty days, an accommodation to the insured, does not compel it to waive the separate twelve-month limitation period. Plaintiff has not drawn our attention to any precedent in support of that position.
To reiterate, plaintiff was told in plain language that it was necessary for him to institute litigation within twelve months and he failed to do so. There are no genuine disputes as to any material fact. The applicable law is clear. Plaintiff, by virtue of the language in the policy and the declination letter, was on notice of the relevant time frame and failed to act within it.
III
Certainly, summary judgment is inappropriate prior to the completion of discovery when there is "'the likelihood that further discovery will supply the missing elements of the cause of action.'" See Wellington v. Estate of Wellington, 359 N.J. Super. 484, 496 (App. Div.) (quoting Auster v. Kinoian, 153 N.J. Super. 52, 56 (App. Div. 1977)), certif. denied, 177 N.J. 493 (2003). In this instance, however, the language of the letter was the only "fact" necessary for the trial court to reach its conclusion. Interpretation of the language is a purely legal question appropriate for summary judgment without additional discovery. See Spaulding, supra, 346 N.J. Super. at 173. Just as plaintiff fails to explain the manner in which the letter's reference to the New Jersey Administrative Code and the invitation to supply additional documentation made the twelve-month time frame ambiguous, he fails to identify the additional information that could result from discovery which would have aided the court in interpreting the letter. See Auster, supra, 153 N.J. Super. at 56. Consequently, plaintiff has not demonstrated the manner in which additional discovery would have inured to his benefit, nor any reason the trial judge should have delayed summary judgment in order to allow for additional discovery. See Bilotti v. Accurate Farming Corp., 39 N.J. 184, 193 (1963).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office
CLERK OF THE APPELATE DIVISION