UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY
July 30, 1999
MICHAEL AND AMY COATES,
LIBERTY MUTUAL INSURANCE CO.,
The opinion of the court was delivered by: Simandle, District Judge:
HONORABLE JEROME B. SIMANDLE
This matter is before the court on the motion of defendant, Liberty Mutual Insurance Co. ("Liberty Mutual"), for summary judgment, pursuant to Federal Rule of Civil Procedure 56(b). Liberty Mutual argues that plaintiffs, Michael and Amy Coates, failed to commence this action within the one-year limitations period of the homeowners insurance policy at issue in this case. Because the court agrees that plaintiffs' action is untimely, the court grants Liberty Mutual's motion for summary judgment and dismisses plaintiffs' Complaint with prejudice.
From February 14, 1996 through February 14, 1997, Liberty Mutual provided homeowners insurance coverage to plaintiffs for their home in Haddon Township, New Jersey, pursuant to a "LibertyGuard Deluxe Homeowners Policy." (Defendants' Ex. A.) The policy contained a limitations clause that provides that any action against Liberty Mutual must be commenced within one year of the date of loss. (Id. at pg. 24.)
On or about May 18, 1997, plaintiffs discovered that their porch was collapsing and that their steps were crumbling under the pressure of the porch. On June 6, 1997, plaintiffs contacted Liberty Mutual by telephone to make a claim for coverage under their homeowners policy. Thereafter, Liberty Mutual sent an engineer to inspect the damage to plaintiffs' home.
By letter dated July 31, 1997, Liberty Mutual denied coverage of plaintiffs' claim. In closing the letter, Liberty Mutual's claims representative advised:
If you have any questions concerning your claim or have other information which may change our coverage decision, please feel free to contact me. (Plaintiff's Ex. D.)
Before receiving Liberty Mutual's July 31, 1997 letter disclaiming coverage for their claim, plaintiffs had hired a contractor to investigate the damage, ascertain the cause and provide them with an estimate of the cost of repairing the problem. They also had hired an engineer to conduct an examination. On August 7, 1997, plaintiffs hired a public adjuster to represent them in discussions with Liberty Mutual about their claim for coverage. That day, the public adjuster wrote to Liberty Mutual to advise of its involvement in the matter. (Plaintiffs' Ex. G.)
By letter dated September 17, 1997, Liberty Mutual sent the public adjuster a copy of the July 31, 1997 letter denying coverage of plaintiffs' claim and advising that its "coverage decision has been explained to [plaintiffs], and stands." (Plaintiffs' Ex. H.)
By letter dated October 13, 1997, the public adjuster advised Liberty Mutual that plaintiffs intended to challenge Liberty Mutual's decision to disclaim coverage. The public adjuster enclosed copies of the report prepared by the engineer plaintiffs had retained and requested Liberty Mutual to review the report. The public adjuster indicated that it would contact Liberty Mutual's claims representative by telephone to discuss the contents of the engineer's report. (Plaintiffs' Ex. I.)
By letter dated November 13, 1997, the public adjuster complained to Liberty Mutual that Liberty Mutual had not responded to the public adjuster's correspondence of October 13, 1997. The public adjuster asserted in the letter that Liberty Mutual was required to provide a written response under the unfair claims practices act. (Plaintiffs' Ex. K.)
By letter dated December 2, 1997, Liberty Mutual responded to the public adjuster's November 13, 1997 letter, advising that its engineer was reviewing the report of plaintiffs' engineer and that Liberty Mutual would respond in writing once its engineer completed his review of plaintiffs' engineer's report. (Plaintiffs' Ex. M.)
By letter dated January 2, 1998, Liberty Mutual reiterated its denial of coverage of plaintiffs' claim. (Plaintiffs' Ex. P.)
On October 6, 1998, plaintiffs commenced this action by filing a Complaint against Liberty Mutual, alleging that Liberty Mutual had denied coverage of their claim in bad faith and in breach of their homeowners insurance policy. Liberty Mutual now moves for summary judgment, contending that plaintiffs failed to file suit within one-year of the date of loss, as required under the limitations provision of their homeowners' insurance policy.
A. Summary Judgment Standard
A court may grant summary judgment only when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is "genuine" if it is supported by evidence upon which a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is "material" only if a dispute about it might affect the outcome of the suit under the governing substantive law. Id. In deciding whether a genuine issue of material fact exists, the court must view the facts in the light most favorable to the non-moving party and extend all reasonable inferences to that party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
The moving party always bears the initial burden of demonstrating the absence of a genuine issue of material fact, regardless of which party ultimately would have the burden of persuasion at trial. Celotex, 477 U.S. at 323. Once the moving party has met its opening burden, the non-moving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id. at 324. The non-moving party may not rest upon the mere allegations or denials of its pleadings. Id. "[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322. "When the record is such that it would not support a rational finding that an essential element of the non-moving party's claim or defense exists, summary judgment must be entered for the moving party." Turner v. Schering-Plough Corp., 901 F.2d 335, 341 (3d Cir. 1990).
Under N.J.S.A. 17:36-5.20, all fire insurance policies issued in New Jersey must contain a standard clause advising that any suit to recover under the policy must be commenced within one year from the date of loss. The parties agree that the policy at issue in this case contained such a provision and that it is enforceable. The parties also agree that, under Peloso v. Hartford Fire Ins. Co., 56 N.J. 514, 521 (1970), the one-year limitations period is tolled from the date on which the insured gives notice of the claim to the carrier until the date on which the carrier denies coverage of the claim in writing. The parties also agree that Liberty Mutual initially denied coverage of plaintiffs' claim in writing on July 31, 1997. The issue in dispute is whether the one-year limitations period should be tolled through January 2, 1998, when Liberty Mutual FINALLY reiterated its denial of plaintiffs' claim after reviewing materials plaintiffs had submitted in an effort to convince Liberty Mutual to reconsider its initial denial of coverage.
The court finds no merit in plaintiffs' argument that the one- year limitations period should be tolled through January 2, 1998. Liberty Mutual unequivocally and unambiguously denied coverage of plaintiffs' claim in writing on July 31, 1997, and no reasonable jury could find otherwise. Although Liberty Mutual invited plaintiffs to contact its claims representative if they had any questions or information that might change the coverage decision, Liberty Mutual never withdrew or retreated from its initial denial of coverage or communicated to plaintiffs any intention to do so. On the contrary, Liberty Mutual repeatedly reiterated its denial of coverage in its correspondence with plaintiffs and the public adjuster plaintiffs retained to represent them. No reasonable jury could find any intention to mislead plaintiffs or to lull them into inaction from Liberty Mutual's correspondence with plaintiffs and their public adjuster between July 31, 1997 and January 2, 1998.
Moreover, plaintiffs had plenty of time to file suit against Liberty Mutual after Liberty Mutual reiterated its denial of coverage on January 2, 1998. Assuming a date of loss of May 18, 1997 and tolling of the one-year limitations period from June 6, 1997, when plaintiffs filed their claim, through July 31, 1997, when Liberty Mutual initially denied coverage, plaintiffs still had over seven months (i.e., until July 12, 1998) in which to file suit against Liberty Mutual after Liberty Mutual finally reiterated its denial of coverage on January 2, 1998. There is no indication in the record of any negotiations or correspondence between plaintiffs and Liberty Mutual after January 2, 1998 from which a reasonable jury could find that Liberty Mutual intended to mislead plaintiffs or lull them into inaction. Indeed, plaintiffs have offered no explanation for their decision to delay filing suit against Liberty Mutual until October 6, 1998, more than ten months after Liberty Mutual finally reiterated its denial of coverage.
For these reasons, the court grants Liberty Mutual's motion for summary judgment and dismisses plaintiffs' Complaint with prejudice. The accompanying Order is entered.
JEROME B. SIMANDLE U.S. District Judge
THIS MATTER having come before the court on the motion of defendant, Liberty Mutual Insurance Co. ("Liberty Mutual"), for summary judgment, pursuant to Federal Rule of Civil Procedure 56(b), and the court having reviewed the submissions of the parties, and for the reasons stated in the accompanying Opinion;
IT IS on this 30th day of July, 1999, hereby ORDERED that Liberty Mutual's motion for summary judgment is GRANTED and that plaintiffs' Complaint is DISMISSED WITH PREJUDICE.
JEROME B. SIMANDLE U.S. District Judge
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