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Ferrero v. New Jersey Manufacturers Insurance Co.


June 25, 2007


On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Mercer County, DC-8342-05.

Per curiam.


Argued February 27, 2007

Before Judges Weissbard and Payne.

Plaintiff, Steven Ferrero, appeals from an order of summary judgment entered against him on his collision claim against his own automobile insurer, defendant, New Jersey Manufacturers Insurance Company (NJM). We affirm.

The record discloses that, on December 4, 2003, Ferrero was involved in an auto accident with a car driven by Gretchen Patrick, who was also insured by NJM. Liability for the accident was disputed. Ferrero's car sustained minor property damage. Both parties promptly reported the accident to NJM.

Ferrero, who filed a collision claim pursuant to his own insurance coverage, was authorized by NJM to obtain a repair estimate from J&D Auto Repair in Washington, New Jersey. The estimate, which was completed on February 7, 2004, set the cost of repairs at a total amount of $1,556.65. The record indicates that J&D had also prepared an earlier, undated, estimate for the repairs prior to the time that the claim had been assigned to it by NJM.*fn1 However, it was in a slightly lesser amount and was not complete, since it lacked photographs of the damage. Moreover, Ferrero states that on January 2, 2004, he spoke with a claims representative at NJM and informed her that the initial estimate had not included certain wheel damage to his vehicle. Thus, a revised estimate was required.

J&D's final estimate was received by NJM on February 17, 2004. A check in the amount of $1,056.65 (the total cost of repair minus a $500 deductible) was issued by NJM on February 20, 2004 and was mailed to Ferrero. The check was received by Ferrero on February 23, 2004.

Simultaneously, NJM, finding fault to be unclear, sought to settle any liability claim between Ferrero and Patrick by payment to Ferrero of one-half of his deductible. By letter dated February 23, 2004, Ferrero advised NJM that the settlement offer was not acceptable.

In early March 2004, Ferrero returned the check tendered by NJM for the cost of repairs. Additionally, he filed a complaint against NJM with the Department of Banking and Insurance, which declined to act. Ferrero then instituted suit in the Special Civil Part by complaint dated November 7, 2005.

Following a discovery dispute, occasioned by Ferrero's irrelevant and unreasonable discovery demands and resolved by the issuance of a protective order by the judge, NJM filed a motion for summary judgment, which was granted on March 2, 2006.

On appeal, Ferrero raises the following arguments:


- Claimant vehemently challenges the granting of a broad Protective Order to the Defendant by the Mercer County Special Civil Part Court while the Defendant remained uncooperative and refused to comply with Discovery. This reversible error needs to be corrected.


- The Mercer County Special Civil Part Court exercised grossly inappropriate use of Summary Judgment in favor of Defendant while Claimant was not permitted access to any items accorded to Claimant under Rules Of Discovery, the Unfair Claims Settlement Practices, and while Defendant had submitted a falsified document to the Mercer County Special Civil Part Court under the guise of a police accident report. This reversible error needs to be corrected.


- Claimant challenges the submission of Defendant's Affidavit of Victoria Goodnow since it contains information knowingly false to the Defendant.


- Claimant is owed a duty-bound, contractual obligation of "good faith" from one's own insurer in a reasonable amount of time and should not be stonewalled for an excessive period of time when the absence of fault from the claimant is not even reasonably debatable. An almost comical (79) seventy-nine days elapsed before Defendant offered Claimant anything at all.


- Defendant had a duty-bound contractual obligation to provide Claimant a written notification with explanation on day (31) thirty-one that Claimant hadn't been paid and every (30) thirty days thereafter as to the cause of the delays and anticipated date of resolution. Defendant had a duty-bound contractual obligation to provide this mandated under the following statutes. Claimant's prepaid full coverage insurance policy ought to have preserved Claimant rights guaranteed under the following statutes which Defendant willfully, intentionally, and maliciously violated contributing to the defendant's exhibition of "bad faith."


- Plaintiff is owed the right to Discovery to obtain all relevant requested materials as per the Rules Of The Court and by Claimant's Constitutional 14th Amendment rights of due process. Defendant has maintained exclusive access to all relevant materials while denying these materials to Plaintiff despite the fact that all relevant materials are accorded to Plaintiff by the following statutes.

Having carefully considered the record in this matter, together with the briefs of the parties and the legal decisions, statutes and regulations cited therein, we find none of Ferrero's arguments to have sufficient merit to warrant extended discussion in a written opinion. R. 2:11-3(e)(1)(E).

It appears to us that Ferrero may have misunderstood the difference between a first- and a third-party claim. What Ferrero filed was a first-party claim against his own insurer for collision coverage, payable without regard for liability. Ferrero's policy with NJM provided for a $500 deductible in connection with such coverage. That amount was, in fact, deducted, and the balance of Ferrero's claim was properly paid to him by check issued on February 20, 2004.

We understand that Ferrero has also asserted that Patrick was fully liable for the accident at issue, that NJM made an unsuccessful attempt to settle the liability claim for one-half of Ferrero's deductible, and that Ferrero has filed suit against Patrick. He is entitled, in that action, to include the $500 deductible as an element of any damages allegedly sustained by him as the result of Patrick's negligence. If Ferrero prevails, he will recover the $500 from Patrick. Although any damages recovered by Ferrero will be paid by Patrick's insurer, which is also NJM, the fact that a single company insured both parties to the accident is simply fortuitous. It does not provide an additional ground for relief on a first-party claim by Ferrero under the collision coverage of his own policy or obviate the policy's requirement that Ferrero pay his collision deductible. For these reasons, summary judgment was properly granted in NJM's favor. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); Prudential Prop. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

Because Ferrero's discovery requests in the present first-party coverage action pertained to his liability action against Patrick, a protective order was properly entered. R. 4:10-3; see also Catalpa Inv. Group v. Franklin Tp. Zoning Bd. of Adjust., 254 N.J. Super. 270, 273-74 (Law Div. 1991).

Ferrero additionally argues that he is entitled to damages because NJM engaged in unfair claim settlement practices in violation of N.J.S.A. 17:29B-4(9), N.J.S.A. 17B:30-13.2 and N.J.A.C. 11:2-17.1, and violated the time and notice requirements pertaining to claims processing set forth in N.J.A.C. 11:3-10.5. However, as the Department of Banking and Insurance informed Ferrero in its letter of May 14, 2004, declining to take action on a complaint filed by Ferrero against NJM, arising in part out of its conduct in connection with this first-party claim, those statutes and regulations are designed to prohibit "general business practice[s]." If such practices are found to exist, fines will be imposed upon the offending insurer. An individual damage award will not be made.

A cause of action may be asserted for compensatory and punitive damages against an insurer based upon bad faith refusal to provide payment on a valid first-party claim. See Pickett v, Lloyd's, 131 N.J. 257 (1993). However, we discern no evidence in the record that would support a claim for such compensatory damages here, Ferrero's claim having been paid within three days after receipt of a completed and final estimate, and Ferrero's car having remained operable throughout the claims processing period. Further, we observe no evidence of the egregious circumstances, id. at 476, that would entitle Ferrero to damages for emotional distress or to punitive damages.


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