On appeal from Superior Court of New Jersey, Law Division, Hunterdon County, Docket No. L-702-02.
Before Judges Wefing, Collester and Fuentes.
The opinion of the court was delivered by: Fuentes, J.A.D.
Defendant New Jersey Manufacturers Insurance Company (NJM) appeals from an order of the Law Division directing it to submit to uninsured motorist (UM) coverage arbitration in connection with a claim filed by plaintiff, Theodore Price. The court found that NJM's course of conduct had lulled plaintiff's attorney into a false sense of having timely made a UM claim. We agree and affirm.*fn1
On August 30, 1995, plaintiff, while in the course of his employment, was involved in an auto accident as a pedestrian. The vehicle that struck him was uninsured. NJM had issued an automobile insurance policy to plaintiff during the time period encompassing the accident. The UM coverage section of the policy provides as follows:
A. If we and an insured do not agree:
1. Whether that insured is legally entitled to recover damages; or
2. As to the amount of damages which are recoverable by that insured;
from the owner or operator of an uninsured motor vehicle or an underinsured motor vehicle, then the matter may be arbitrated.
Either party may make a written demand for arbitration. In this event, each party will select an arbitrator. The two arbitrators will select a third. If they cannot agree within 30 days, either may request that selection be made by a judge of a court having jurisdiction.
Thus, in order to invoke the arbitration provisions there must first be a disagreement as to either (1) the threshold issue of entitlement to recover damages or (2) the amount of the claim. If either one of these conditions precedent exists,"[e]ither party may make a written demand for arbitration."
By letter dated February 12, 1998, plaintiff's counsel wrote to NJM advising it of the accident and enclosing documents which revealed that the tortfeasor was uninsured. The letter concludes as follows:
Therefore, my client will be presenting an uninsured motorist claim arising from this accident. Please establish an uninsured motorists claim file and ask that adjuster to contact me as soon as possible.
NJM acknowledged receipt of the February 12, 1998 letter"putting [it] on notice of a potential uninsured motorist claim." NJM assigned a file number to the case and requested information concerning (1) the amount of the workers' compensation lien (operating under the assumption that such a case had been filed and settled) and (2) plaintiff's injuries.
Two months later, NJM's claims representative sent another letter to plaintiff's counsel emphasizing that the case was"some three years old" and again requesting information as to any lien. Forty days thereafter, plaintiff's counsel responded by forwarding the information requested to"allow you [NJM] to begin to evaluate this claim...." The letter also advised NJM that a suit had been filed against the tortfeasor to"protect" [NJM's] subrogation rights. The letter further requested that NJM advise whether it intended to pursue the subrogation action."If you do not, [the letter continued] I presume you have no ...