On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket Numbers L-182-01 and L-2988-01.
Before Judges Havey, Wells and Payne.
The opinion of the court was delivered by: Havey, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Automobile general liability policies issued by the defendant insurance companies in this case contain a Compensation Provision, under which defendants agree to reimburse their insureds for out-of-pocket expenses incurred while the insureds attended court proceedings in a personal injury action defended by the insurers. In these consolidated appeals, the central issue is whether defendants have an affirmative duty to alert the insureds to their right to reimbursement under the Compensation Provision when the expenses are incurred, and to provide them with "claim forms" in order to facilitate their reimbursement claims. In granting defendant's motion to dismiss for failure to state a claim, Rule 4:2-6(e), the trial court held that defendants owed no such duty. We agree and affirm.
Plaintiff Kenneth Davis filed a class action complaint against defendants Allstate Insurance Company, Allstate Indemnity Company and Allstate New Jersey Insurance Company (Allstate) asserting, among other causes of action, breach of implied covenant of good faith and fair dealing, breach of contract, and insurance bad faith. Plaintiffs Jerome Edwards and Joseph Garofolo filed a separate class action advancing the same causes of action against defendants Prudential Property and Casualty Company and the Prudential Property and Casualty Insurance Company of New Jersey (Prudential). In both complaints, plaintiffs allege that: (1) they and class members are current or former named insureds or "other" insureds under automobile liability policies issued by Allstate or Prudential; (2) they were named as defendants in personal injury actions for which defendants provided a defense; and (3) they incurred lost wages and other expenses as a result of attending pretrial court proceedings in the underlying actions.
The policies issued by Allstate and Prudential contain a Compensation Provision. Allstate's policy provides:
In addition to our limit of liability, we will pay on behalf of an insured: . . . . 4, Up to $50 a day for loss of earnings, but not other income, because of attendance at hearings or trials at our request.
Prudential's policy provides:
We'll pay any reasonable bills connected with the defense of you or any other insured incurred at our request, such as travel expenses to attend court. But we won't pay more than $50 per day for actual net wages lost if the insured has to take time off from work.
It is undisputed that plaintiffs have never made a claim for reimbursement under the Compensation Provisions of the policies issued to them.
Indulgently read, plaintiffs complaints charge that defendants are deliberately "silent" regarding their duty to reimburse under the Compensation Provisions. Specifically, plaintiffs complaints charge that defendants: intentionally fail to inform insureds of their right to payment under the Compensation Provision, even though [defendants] know that [they are] requiring [their] insureds to incur expenses and likely lose wages, which automatically entitles the insureds to payment under the Compensation Provision.
[Defendants] know that the vast majority of [their] insureds are unaware that they are automatically entitled to benefits under the Compensation Provision as a result of complying with [defendants'] request that they attend and give testimony. [Defendants rely] on the ignorance of [their] insureds and conceal the right to payment from [their] insureds. Plaintiffs add:
[Defendants do] not provide insureds who have attended a deposition, hearing or trial with any type of notification or claim form, or any other means by which payments under the Compensation Provision can be sought. On information and belief, no such form exists. [Defendants] make it difficult, or impossible, for ...