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Loffa v. Motor Club of America Insurance Co.


March 14, 2008


On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-1820-06.

Per curiam.


Argued November 15, 2007

Before Judges Parker, R. B. Coleman and Lyons.

Plaintiff Alphonso Loffa appeals from two orders entered on September 22, 2006, one granting defendant's motion for summary judgment and the other denying plaintiff's motion for summary judgment. Defendant also appeals from an order entered on November 17, 2006 denying his motion for reconsideration.

This matter arises out of a motor vehicle accident that occurred on August 5, 1995 between plaintiff's vehicle and a vehicle owned by Allaire Limousine, Inc. (Allaire). Allaire was insured by Home State Insurance Company (Home State), which was declared insolvent on September 9, 1997.

Plaintiff carried uninsured motorist coverage in the amount of $300,000 through Motor Club of America Insurance Company (MCA). On December 30, 1997, plaintiff's counsel wrote to MCA advising that plaintiff, Genevieve Loffa, had died from injuries sustained in the accident and that her administrator, Antonio Loffa, was pursuing her claim. Plaintiff's counsel further indicated that he was submitting an uninsured motorist claim on behalf of Genevieve Loffa even though he was uncertain whether any other carrier would provide coverage. Alphonso Loffa, plaintiff in this case, who was the owner of the vehicle insured by MCA and was injured in the accident, was not mentioned in the December 30, 1997 letter.

Plaintiff's next communication with MCA was a letter dated July 20, 2001, referencing both Genevieve and Alphonso Loffa*fn1 -- two weeks before the statute of limitations expired -- forwarding medical reports and documents from the Allaire lawsuit. Plaintiff's letter made no reference to the statute of limitations, nor did it explain the delay in pursuing the UM claim. On September 5, 2001 -- one month after the statute had expired -- MCA's counsel wrote to plaintiff's counsel requesting further medical records for Alphonso Loffa and authorization for release of his PIP file at "your earliest convenience so as not to cause further delay in this matter." On September 25, 2001, MCA's counsel again wrote to plaintiff's counsel requesting the medical records and authorization for release of the PIP file. On November 2, 2001, MCA's counsel advised plaintiff's counsel that he had received the PIP file and wanted to schedule plaintiff's deposition. On November 6, 2001, MCA's counsel confirmed plaintiff's deposition for November 13, 2001. The deposition actually occurred on November 14, 2001 and on January 28, 2002, Dr. Thomas Westerman, who examined plaintiff on MCA's behalf, rendered a medical report. In March 2002, an independent arbitrator was appointed but on May 1, 2002, MCA advised the arbitrator that it could not proceed with arbitration because additional medical information had not been provided by plaintiff.

For more than a year, plaintiff had no further contact with MCA. On June 17, 2003, MCA's counsel notified plaintiff's counsel that MCA would not pay the claim voluntarily because the statute of limitations had expired more than two years earlier. MCA's counsel advised plaintiff's counsel to file a verified complaint and order to show cause to compel arbitration. Rather than file the complaint, on August 28, 2003 plaintiff attempted to schedule arbitration, to which MCA's counsel responded on September 2, 2003 with a letter again advising plaintiff that discovery was not complete and to proceed by verified complaint and order to show cause. Plaintiff did not file the verified complaint and order to show cause, however, until May 2006 -- more than ten years after the accident and three years after MCA advised that it would not make a voluntary payment on the claim because the statute expired on August 5, 2001.

After hearing the summary judgment motions on September 22, 2006, the trial court observed that the six-year contract statute of limitations applied. The court noted that about two weeks before the statute was to run, the letter . . . sent by plaintiff's counsel to the defendant, forwarding copies of medical reports indicating that Motor Club's UM coverage is primary and must be exhausted before they can pursue a claim against the fund and asking a claims supervisor to review the medical reports and return a call to see if it was possible to resolve the matter on an amicable basis.

That seems to be the only thing that took place of any substance before the statute ran.

In this appeal, plaintiff argues that the trial court erred in (1) granting summary judgment; (2) denying reconsideration; (3) failing to allow oral argument on the reconsideration motion; and (4) failing to give sufficient reasons for denying reconsideration.

We have carefully considered the record in light of plaintiff's arguments and we are satisfied that they lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons set forth by Judge John Malone on the record of September 22, 2006 and November 16, 2006. Nevertheless, we add the following comments.

Plaintiff argues that he first indicated his intention to claim UM benefits to MCA on December 30, 1997, but defendant never mentioned the statute of limitations until June 17, 2003. Plaintiff fails to note, however, that the December 30, 1997 letter made no reference to plaintiff Alphonso Loffa and that counsel had no further contact with MCA regarding Alphonso's claim until July 20, 2001 -- two weeks before the statute expired. Plaintiff argues that

[u]nder such circumstances, it is submitted, that the statute of limitations was tolled and, as a result, the filing of the present Verified Complaint and Order to Show Cause on May 16, 2006 was timely since the Statute of [L]imitations has been tolled from December 30, 1997 when the first notice of a UM claim was given to the UM carrier, until March 25, 2005, the first notice from the carrier that they were refusing to arbitrate after having indicated the exact opposite in the preceding years. At the very earliest, the statute was tolled from and after the June 17, 2003 letter from Defendant.

"'The primary purpose of the statute of limitations is to provide defendants a fair opportunity to defend and to prevent plaintiffs from litigating stale claims.'" Price v. N.J. Mfrs. Ins. Co., 182 N.J. 519, 524 (2005) (quoting W.V. Pangborne & Co., Inc. v. New Jersey Dep't of Transp., 116 N.J. 543, 563 (1989)). Equitable principles, however, may allow for relaxation of the statute of limitations. Id. at 525.

Plaintiff's argument that the statute should be tolled is essentially an equitable estoppel argument. The doctrine of equitable estoppel may be invoked when

[t]he effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed . . . as against another person, who has in good faith relied upon such conduct and has been led thereby to change his position for the worse. [Walsh v. Mattera, 379 N.J. Super. 548, 559 (App. Div. 2005) (citing W.V. Pangborne & Co., Inc. v. New Jersey Dep't of Transp., 116 N.J. 543, 554 (1989)); see also Konopka v. Foster, 356 N.J. Super. 223, 231 (App. Div. 2002) (finding that courts should be guided by the objective impression created by the actor's conduct).]

The six-year statute of limitations on coverage for UM claims ordinarily accrues on the date of the accident. Green v. Selective Ins. Co. of America, 144 N.J. 344, 354 (1996). Equitable principles may be invoked, however, to protect a plaintiff who has failed to file a complaint because he reasonably believed that the carrier would settle and then acts within a reasonable time to protect his rights. Id. at 357.

In actions based on contract, such as this, "'equitable estoppel has been used to prevent a defendant from asserting the statute of limitations when the defendant engages in conduct that is calculated to mislead the plaintiff into believing that it is unnecessary to seek civil redress.'" Trinity Church v. Atkin Olshin Lawson-Bell, 394 N.J. Super. 159, 171 (App. Div. 2007) (quoting W.V. Pangborne, supra, 116 N.J. at 553-54). Here, MCA did nothing prior to expiration of the statute to lead plaintiff to believe he could forego his civil remedies.

Equitable estoppel may be invoked where defendants have actively participated in discovery or arbitration proceedings. In White v. Karlsson, 354 N.J. Super. 284, 291 (App. Div. 2002), the defendant engaged in extensive discovery and participated in arbitration. Post-arbitration, defense counsel "filed a timely request for a trial de novo, and continued to engage in discovery." Id. at 287. A trial date was set when defense counsel raised the statute of limitations defense in a motion for summary judgment. We held that the defendant's actions waived the statute of limitations because the defendant waited until after arbitration to assert the statute of limitations defense. Id. at 288. We declined to interfere with the Legislature's intended goal "'to preserve judicial resources and improve efficiency by providing for [this forum of] arbitration.'" Id. at 291 (quoting Hartsfield v. Fantini, 149 N.J. 611, 616 (1997)). Here, MCA declined to engage in arbitration after the statute expired and specifically advised plaintiff to file a complaint and order to show cause to compel arbitration. Although MCA did engage in discovery after the statute expired, plaintiff failed to provide all of the requested medical records and failed to pursue his claim for more than a year after Dr. Westerman's report and the appointment of an independent arbitrator.

In Price, the Court held that "[t]he undisputed facts . . . support an equitable tolling of the statute of limitations," 182 N.J. at 525. There,

[p]laintiff's attorney first notified NJM on February 12, 1998, that plaintiff "would be presenting an uninsured motorists claim," and on June 29, 1998, he wrote that plaintiff "would like to proceed with [his] uninsured motorist claim[s]." In the latter letter he enclosed various documents to permit NJM "to begin to evaluate this claim." In addition, plaintiff informed NJM that he filed a lawsuit against the tortfeasor to protect the interest of NJM.

An NJM claims representative wrote to plaintiff's counsel on October 8, 1998, that she was now handling plaintiff's claim and requested "copies of all medical bills and reports on [plaintiff] as they become available." During the next several years, NJM received various information necessary to evaluate plaintiff's claim, including a medical examination of plaintiff.

Plaintiff met each of NJM's requests. In fact, NJM's last request was dated August 21, 2001, nine days before the expiration of the statute of limitations. At that time, NJM asked for the complete workers' compensation file, plaintiff's employer's "policy language regarding their UM limits and exposure to his loss," and the original MRI films. Plaintiff's counsel responded with most of the requested information on September 20, 2001, and thereafter continued to forward, upon receipt, information relative to the claim. It was not until October 28, 2002, more than a year after the statute would have otherwise run, that NJM notified plaintiff that the statute of limitations barred his claim. [182 N.J. at 525-26.]

On October 28, 2002, NJM notified the plaintiff that it would invoke the statute of limitations and on November 22, 2002, the plaintiff filed a complaint and order to show cause. Id. at 523, 526. The Court declared that "[i]t was not reasonable for NJM to sit back, request and receive various documents over a three and one-half year period, and then deny plaintiff's claim because he failed to file a complaint in Superior Court or request arbitration prior to the running of the six-year statute of limitations." Id. at 526. In Price, the plaintiff filed the complaint three weeks after NJM invoked the statute of limitations. Here, plaintiff waited three years to do so.

Plaintiff knew on December 30, 1997 that he had to file a UM claim but failed to notify MCA on behalf of Alphonso Loffa. By June 17, 2003 -- when MCA declined to make voluntary payment because the statute had run two years earlier -- plaintiff still had not completed discovery or provided MCA with pre-accident medical records requested by MCA.

On June 17, 2003, MCA put plaintiff on notice that he would have to proceed by verified complaint and order to show cause in order to compel arbitration, and twice thereafter MCA advised plaintiff that the carrier would not proceed because the statute of limitations had run. Nevertheless, plaintiff waited another three years to file the verified complaint.

The doctrine of equitable estoppel is intended to invoke the "fundamental duty of fair dealing imposed by law." Knorr v. Smeal, 178 N.J. 169, 178 (2003). As with any equitable doctrine, it requires a balancing of interests. "'[W]here defendants are on notice of the claims, and no significant prejudice results, the policy reasons for upholding a strict statute of limitations recede.'" Price, supra, 182 N.J. at 524 (quoting W.V. Pangborne, supra, 116 N.J. at 563). And therein lies our dilemma.

MCA argues that even if we tolled the statute of limitations, the doctrine of laches bars plaintiff's claim, filed ten years after the accident occurred. Laches "is the neglect, for an unreasonable and unexplained length of time, under circumstances permitting diligence, to do what in law should have been done. More specifically, it is inexcusable delay in asserting a right." Lavin v. Hackensack Bd. of Ed., 90 N.J. 145, 151 (1982) (quoting Atlantic City v. Civil Serv. Comm'n, 3 N.J. Super. 57, 60 (App. Div. 1949)). We agree. Here, plaintiff offers no excuse for failing to file his complaint and order to show cause within a reasonable time after June 17, 2003, when MCA first notified him that the carrier would not pay the claim voluntarily.

We can find no legal or equitable basis for tolling the statute of limitations under these circumstances. The chronology of events here leads us to the conclusion that plaintiff failed to take the necessary and appropriate action to pursue his UM claim against MCA.


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