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Knoepfler v. Guardian Life Insurance Company of America

February 27, 2006

JERROLD B. KNOEPFLER, APPELLANT
v.
GUARDIAN LIFE INSURANCE COMPANY OF AMERICA; BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA, A SUBSIDIARY OF THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA



On Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 01-cv-05186) District Judge: Hon. William H. Walls.

The opinion of the court was delivered by: Cowen, Circuit Judge

PRECEDENTIAL

Argued October 18, 2005

BEFORE: SCIRICA, Chief Judge, VAN ANTWERPEN and COWEN, Circuit Judges.

OPINION

Jerrold Knoepfler, the insured, appeals the order of the district court granting summary judgment in favor of defendant-appellees Guardian Life Insurance Company of America and Berkshire Life Insurance Company of America (collectively "Guardian") on his claims for benefits under two policies of disability insurance. The district court found that the claims were time-barred based upon a policy provision which requires actions to be brought no more than three years after written proof must be furnished. This appeal calls upon us to construe the policy language which fixes the time for furnishing written proof. The policies provide that the insured must furnish proof of loss within ninety days after "the end of the period for which [the insurer is] liable." Knoepfler argues that this language requires an insured with an ongoing disability to furnish written proof after the end of the entire period of disability, while Guardian contends that the insured is required to submit proofs of loss after the end of each month of disability. Because we predict that the New Jersey Supreme Court would construe the policy language to require proof of loss after the end of the entire period of disability, we will reverse.

I.

On April 4, 1990, Jerrold Knoepfler purchased two policies of disability insurance ("Policies") from Guardian. Knoepfler claims entitlement to disability benefits under the Policies based upon an illness that began in November or December of 1992 and continues to the present.

In September 1995, Knoepfler furnished written notice of claim to Guardian. In October 1995, Knoepfler furnished written proof of loss to Guardian. Thereafter, Guardian conducted an investigation of the claim. In a letter dated March 5, 1997, Guardian unequivocally denied coverage.

The Policies under which Knoepfler claims entitlement to benefits are: (1) a Professional Disability Income Policy (Policy No. G-709770) ("Personal Liability Policy"), which provides for payment of benefits in the event of total and/or residual disability as defined therein;*fn1 and (2) an Overhead Expense Disability Income Policy (Policy No. G-709771) ("Overhead Expense Policy") (collectively the "Policies"), which provides for payment of benefits in the event of total disability as defined therein.*fn2

The Policies each contain a "Legal actions" provision and a "Time for filing proof of loss" provision ("Proof of loss" provision). The Legal actions provisions in the Policies read as follows:

No one can bring an action at law or in equity under this policy until 60 days after written proof has been furnished as required by this policy. In no case can an action be brought against Guardian more than three years after written proof must be furnished.

(App. at 97a, 129a.) The Proof of loss provision in the Personal Liability Policy reads as follows:

We are liable for benefits at the end of each month while you are disabled beyond the elimination period until the benefit period ends or, if earlier, the date you recover.

You must give us proof of loss at our home office or at any agency office:

* for loss from disability within 90 days after the end of the period for which we are liable; and

* for any other loss within 90 days after the date of loss.

If you cannot reasonably give us proof within such time, we will not deny or reduce claim if you give us proof as soon as possible. But we will not pay benefits in any case if proof is delayed for more than a year, unless you have lacked legal capacity.

(App. at 97a.) The Proof of loss provision in the Overhead Expense Policy reads as follows:

We are liable for benefits at the end of each month while you are disabled beyond the elimination period until the aggregate benefit is reachedor, if earlier, the date you recover.

You must give us proof of loss at our home office or at any agency office within 90 days after the end of the period of disability for which we are liable.*fn3

If you cannot reasonably give us proof within such time, we will not deny or reduce claim if you give us proof as soon as possible. But we will not pay benefits in any case if proof is delayed for more than one year, unless you have lacked legal capacity.

(App. at 129a.)

The Legal actions and Proof of loss provisions are included in the Policies by statutory mandate. N.J. Stat. Ann. § 17B:26-3. The wording of the Legal actions provisions in the Policies mirrors that of the corresponding statutory provision.

N.J. Stat. Ann. ยง 17B:26-14. The wording of the Proof of loss provisions in the Policies, however, does not mirror the wording of the statutory proof of loss provision, reflecting modifications that Guardian made to the ...


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