On certification to the Superior Court, Appellate Division.
For affirmance in part; for reversal in part; for reinstatement -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, Garibaldi and Stein. Opposed -- None. The opinion of the Court was delivered by Pollock, J.
[123 NJ Page 347] Like the companion case, Weinisch v. Sawyer & Allstate Insurance Co., 123 N.J. 333, 587 A.2d 615 (1991), decided today, this case requires us to determine whether plaintiffs' claim is properly construed as one for reformation rather than for money damages, and if so, whether a jury trial is available in an action for reformation of an insurance contract. Additionally,
this case raises the issue of whether Allstate Insurance Company's (Allstate) slogan, "You're in good hands with Allstate," violates the Consumer Fraud Act, N.J.S.A. 56:8-2, or constitutes common law fraud. Finally, plaintiffs question whether the Appellate Division had jurisdiction to reverse on its own motion the trial court's order denying Allstate's motion to intervene.
Plaintiffs, Marie and Salvatore Rodio, sued Robert Smith, an Allstate insurance agent from whom they had obtained automobile insurance, for his allegedly negligent failure to inform them of the availability of higher underinsured motorist (UIM) coverage. At the time of the accident, their coverage was for the statutory minimum of $15,000 per person and $30,000 per event. The trial court denied Allstate's motion to intervene, but the Appellate Division reversed. Plaintiffs further claimed that Allstate's slogan was fraudulent. The trial court granted defendants' motion to strike plaintiffs' jury demand, dismissed the fraud claim, and after trial entered judgment for defendants on the claim for negligent failure to inform. The Appellate Division affirmed the dismissal of the fraud claim but reversed the judgment for defendants on the failure-to-inform claim, and remanded for a jury trial.
We granted plaintiffs' petition and defendants' cross-petition for certification, 121 N.J. 640, 583 A.2d 332 (1990), and now affirm so much of the Appellate Division's judgment as disposes of the fraud claim and reverse so much of that judgment as affects the failure-to-inform claim. Consequently, we reinstate the judgment of the Law Division. For the reasons set forth in Weinisch, we find that plaintiffs' claim is properly understood as an action for reformation, and that the trial court properly struck plaintiffs' jury demand. We further hold that Allstate's slogan amounts to neither statutory consumer fraud nor common law fraud, and that the Appellate Division properly reversed the trial court's order denying Allstate's motion to intervene.
Except for a more complicated procedural history, the material facts are substantially similar to those in Weinisch. On January 23, 1985, plaintiff Marie R. Rodio was involved in an automobile accident and sustained damages that exceeded the combined limits of the other driver's coverage and her own UIM coverage. Just as the plaintiff in Weinisch claimed that Allstate's agent breached a duty to inform him of the availability of higher UIM coverage, so plaintiffs here claim that Allstate's agent Smith failed to inform them about the availability of additional UIM coverage.
At trial, the resolution of the critical issue of Smith's alleged failure to inform them of the availability of higher UIM coverage depended on an assessment of the credibility of the witnesses. In resolving that sensitive issue against plaintiffs, the trial court found that they had demonstrated "selective memory or motivated loss of memory."
Although plaintiffs testified that defendants had never informed them of the availability of increased bodily injury or uninsured/underinsured motorist (UM/UIM) coverage, the trial court rejected that testimony. It was "satisfied from the evidence that there is no doubt that Mr. Rodio was aware that higher limits of insurance coverage for liability was available." The court found incredible plaintiffs' testimony that they had never received any of the information mailed by Allstate about the availability of additional UM/UIM coverage. It also found that in early January 1985, before Mrs. Rodio's accident, Smith had explained to plaintiffs the options for increased UM/UIM coverage. As determined by the trial court, Smith explained that plaintiffs could obtain additional coverage by paying an additional fifty-dollar premium. The court concluded its oral opinion with the statement that plaintiffs "made a conscious, although in hindsight extremely foolish decision, to save the fifty dollars."
Following Mrs. Rodio's accident, plaintiffs sued Smith, alleging that he had negligently failed to inform them about the availability of additional UIM coverage, and demanded a jury trial. Allstate sought to intervene, and Allstate and Smith moved to strike plaintiffs' jury demand on the ground that plaintiffs had in essence asserted a claim in equity for reformation of the policy. The trial court ruled that reformation was the sole remedy and therefore struck the jury demand. However, the court denied Allstate's motion to intervene. Plaintiffs sought leave to appeal the denial ...