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Fiore v. Allstate Insurance Co.

March 24, 2008


On appeal from the Superior Court of New Jersey, Law Division, Ocean County, L-371-04.

Per curiam.


Submitted: February 27, 2008

Before Judges Axelrad and Messano.

This case arises out of a September 10, 1995 automobile accident in which plaintiffs (driver and passenger), who were insured by Allstate, were injured when their vehicle was struck by an automobile driven by Miguel Muniz and owned by Paul and Betty Skeens. As this appeal involves a decision following remand, the following recitation is taken directly from our per curiam opinion directing the remand. Fiore v. Allstate Ins. Co., No. A-2269-04T2 (App. Div. February 15, 2006).

The Skeens had a $20,000/$40,000 policy with State Insurance Company (State Insurance). Plaintiffs' coverage under their Allstate Insurance policy was $100,000/$300,000. Ralph Furino, Jr. filed suit on plaintiffs' behalf against Muniz and the Skeens in Middlesex County. By correspondence of May 21, 1998 to Allstate's claims adjuster Bruce Isendorfer, Furino detailed his phone calls beginning in March regarding State Insurance's offer and plaintiffs' intention to pursue a UIM (underinsured motorist) claim, and further confirmed Furino's inability to ascertain whether Muniz had insurance. On June 3, 1998, Furino requested written permission from Isendorfer to finalize settlement with the primary tortfeasor for the $38,000 figure they had previously discussed, and to proceed on plaintiffs' UIM claim, which Isendorfer received on June 25. Having Allstate's approval, Furino accepted the settlement on plaintiffs' behalf and dismissed the lawsuit against Muniz and the Skeens, although the record does not reflect the date of dismissal.

On June 24, 1998, Allstate was informed by its investigator that, as of the date of the underlying accident, Muniz had a registered vehicle insured through State Farm with a $100,000/$300,000 policy. This letter indicated it was a supplement to a May 18, 1998 report, and was based upon Muniz's driving abstract dated June 10, 1998. Susan Nuzzo, Allstate's Property-Casualty Claim Representative, purportedly advised Furino of this information by letter of July 10, 1998, which Furino certified he never received. Allstate hired attorneys to defend the arbitration claim, who proceeded with discovery and medical examinations in preparation for the UIM arbitration.

According to the certifications presented to the court in connection with plaintiffs' motion to compel UIM arbitration, discussed infra, both plaintiffs' and Allstate's counsel first learned at the arbitration on March 1, 2001, when the July 10, 1998 letter was faxed over from Allstate, that Muniz potentially had additional coverage equal to the limits of plaintiffs' policy and Allstate was taking the position that plaintiffs' UIM coverage did not extend to the underlying accident. The arbitration was adjourned so Furino could conduct discovery about Muniz's policy with State Farm. The hearing was adjourned or cancelled by someone other than Allstate, and apparently no new date was specified.

Plaintiffs' present counsel became involved around November 2003, and on February 4, 2004, he filed an order to show cause to compel Allstate to schedule a UIM hearing. Allstate filed an answer with separate defenses. It did not assert the statute of limitations defense in its answer. In April the court vacated the order to show cause and discovery ensued. Plaintiffs renewed their motion to compel in August, and during argument plaintiffs' counsel raised the issue that Allstate was estopped from asserting the existence of the State Farm policy. The court deemed the argument abandoned and denied the motion in a letter opinion and order dated October 7, 2004, and further denied plaintiffs' motion for reconsideration.

Plaintiffs appealed, and on February l5, 2006 we reversed and remanded, stating:

In its ruling, the court did not mention the October 19, 1995 letter from Allstate to State Farm [contained in Allstate's file which was not disclosed to Furino nor plaintiffs' current counsel until February 2004 in connection with the order to show cause to compel UIM arbitration] nor plaintiffs' former counsel's certification that he did not receive Allstate's July 10, 1998 letter and was unaware of Muniz's State Farm policy or Allstate's intention to deny UIM coverage until he appeared at the arbitration on March 1, 2001. According, we remand this matter to the trial court to reconsider plaintiffs' estoppel argument in light of these facts. The trial court shall conduct whatever further proceedings it deems appropriate, including a plenary hearing. It shall then make specific findings pursuant to Rule 1:7-4 as to whether Allstate is estopped from denying UIM benefits to plaintiffs.

[Id., slip op. at 82-83.]

Following the remand, pursuant to the trial court's instructions, plaintiffs submitted a letter brief on the issue of estoppel. In its reply brief Allstate unilaterally raised, for the first time, the alternative argument that even if estoppel did apply it was not warranted, as plaintiffs, knowing Allstate was taking the position that there was no UIM coverage under the policy, failed to assert their claim for estoppel within the six-year statute of limitations for UIM claims.

By written decision of August 4, 2006, the trial court concluded that plaintiffs had established that Allstate should be estopped from denying UIM coverage because of all the activities that occurred before the arbitration, which actually was scheduled ...

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