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Southard v. New Jersey Manufacturers Insurance Co.


July 22, 2009


On appeal from Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-0539-06.

Per curiam.


Argued January 13, 2009

Before Judges Fuentes, Gilroy and Chambers.

Plaintiff*fn1 Beverly Southard appeals from the order of the Law Division dismissing her lawsuit against defendant New Jersey Manufacturers Insurance Company, (NJM) seeking uninsured motorist (UM) coverage. The trial court granted NJM's summary judgment motion finding that plaintiff failed to provide the carrier, in a timely manner, with the information necessary to verify the legitimacy of the claim. We affirm.

Because the trial court decided this case as a matter of law in favor of NJM, we will recite all salient facts in the light most favorable to plaintiff. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995).

On April 13, 2001, plaintiff, her husband and son were passengers on a New York Transit bus in Manhattan. Plaintiff claims the bus pulled over to the curb to drop off passengers and pick up new passengers. As it pulled away from the curb into the lane of traffic on 48th Street, the bus collided with an unidentified vehicle. According to plaintiff, she did not see this vehicle before the collision, and only saw the car very briefly immediately after the accident.

The "phantom" vehicle was damaged on the passenger side, rear quarter panel. There was no police report of the accident, and no New York Transit incident report documenting the event. At her deposition, plaintiff confirmed that she was never questioned about the accident by anyone associated with the New York Transit Authority or the New York City Police Department. In fact, no one called the police at the time of the accident. According to plaintiff, neither the bus driver nor the driver of the unidentified vehicle ever got out of their respective vehicles or spoke to each other.

Although she did not sustain any visible injuries, plaintiff felt stiff shortly after the accident. As she and her family walked through Central Park, her symptoms increased in severity, causing her to cut her trip short.

At the time of the accident, plaintiff had a personal automobile insurance policy with NJM. On August 21, 2001, four days after the accident, plaintiff gave NJM notice of the accident by telephone. On September 12, 2001, plaintiff, through her attorney, filed a formal application for Personal Injury Protection (PIP) benefits.

By letter dated January 28, 2002, NJM advised plaintiff that her maximum PIP medical benefit coverage had been exhausted by a previous medical provider. On February 25, 2002, plaintiff requested additional information on the question of exhaustion.

Sixteen months after the accident, plaintiff advised NJM that she was seeking UM benefits. In a letter dated July 23, 2002, plaintiff's counsel gave a brief description of the accident and, for the first time, indicated that the "unknown vehicle" that cut off the bus had "New York Tag #FY66073." With respect to this information, plaintiff's counsel wrote: "We have completed a search on the aforementioned tag which came back unknown. We have written to the New York Transit Bus company for a report as to the incident, however, to date we have not received a response."

NJM responded in August 2002, requesting that plaintiff provide all pertinent information, including, but not limited to, police accident reports and incident reports from the New York Transit Bus Company. In response, plaintiff's counsel sent NJM a settlement brochure dated September 2002, containing an undated inquiry to the New York State Department of Motor Vehicles for insurance information on a "gold/tan Infinity with license plate FY66073." The Department of Motor Vehicles responded that it had no record of the license plate on file. According to plaintiff, this license plate number was given to her by a passenger on the bus. Plaintiff also provided a handwritten piece of paper with the plate number and the bus number, and dates for certain medical tests she had after the accident.

On October 23, 2002, NJM sent plaintiff a letter declining UM coverage. The letter noted that under Part G of plaintiff's policy, NJM had no duty to provide UM coverage unless there has been full compliance with the following duties.

A. A. We must be notified promptly of how, when, and where the accident or loss happened. Notice should also include the names and addresses of any injured persons and of any witnesses.

B. B. A person seeking Uninsured Motorist Coverage must also:

1. 1. Promptly notify the police if a hitand-run driver is involved.

2. 2. Promptly send [NJM] copies of the legal papers if a suit is brought.

We will be unable to evaluate whether your client has a legitimate UM claim and/or respond to your demand until the above terms and conditions of the policy have been satisfied.

On November 4, 2002, plaintiff's counsel responded to NJM's declination of coverage conceding that there was no police report documenting the incident or the involvement of the hit-and-run driver. Faced with this impasse, the issue was eventually brought before the Law Division.*fn2

The case came before Judge Hogan by way of NJM's motion for summary judgment. After considering the facts recited here, Judge Hogan found in favor of NJM. He explained his reasoning in a memorandum of opinion dated February 1, 2008. Judge Hogan found that plaintiff had breached her duties under the policy by failing to report the accident promptly, and by failing to take the steps necessary to document the event itself. He gave the following explanation in support of his findings:

Five months after the accident, [p]laintiff called [NJM] and provided minimum information. It was after fifteen months from the date of the accident that

[p]laintiff filed her uninsured motorist claim. Plaintiff has breached the terms of the insurance policy and the statutory requirements for uninsured motorist claims [(N.J.S.A. 39:6-78),] by failing to promptly notify [defendant] of the accident and her injuries, failing to provide a police report, failing to use reasonable efforts to identify the owner/operator of the unidentified vehicle. This breach of policy and statutory requirements is prejudicial to [NJM]. Now close to seven years after the alleged accident, the only information regarding the April 13, 2001 occurrence is that there was an unidentified car which hit the bus, injuring only the [p]laintiff.

There are no police reports, no incident reports, or corroborating testimony from witnesses other than [p]laintiff's family members.

Plaintiff argues that the trial court erred in granting summary judgment because the evidence shows that she complied with the terms of her insurance contract by providing information about the unidentified driver, and by promptly reporting the accident to NJM in her PIP claim. We disagree.

We begin our analysis by reaffirming that failure by the insured to comply with the notice requirements for UM coverage in an automobile liability policy "is not a sufficient basis to deny coverage as a matter of law." Sheckel v. State Farm Mutual Auto. Ins. Co., 316 N.J. Super. 326, 331-32 (App. Div. 1998). In order to successfully decline coverage for UM benefits, the carrier must prove that (1) the insured violated the notice provisions in the policy; and (2) the carrier will likely suffer appreciable prejudice as a result of such violation. Id. at 332. The carrier bears the burden of persuasion as to both of these prongs. Ibid.

As the NJM policy shows, the insured not only has a duty to provide prompt notice of the accident, but she must also report the incident to the police and provide the carrier with any information that would assist in investigating the claim, and identify the hit-and-run driver. The requirement that the insured use reasonable efforts to identify the hit-and-run motorist is also statutory. N.J.S.A. 17:28-1.1, the statute mandating UM coverage in this State, incorporates the definition of "hit-and-run driver" in the New Jersey Unsatisfied Claim and Judgment Fund Law, N.J.S.A. 39:6-61 to -91. Under N.J.S.A. 39:6-78(e), an injured party seeking UM benefits must make "[a]ll reasonable efforts... to ascertain the identity of the motor vehicle and the owner and operator thereof."

Thus, plaintiff must demonstrate that her conduct in attempting to identify the hit-and-run driver was reasonable, or alternatively, efforts to do so would have been futile. Alternatively, plaintiff can show that her failure to file a prompt police report was excusable under the circumstances. Kenny v. New Jersey Mfrs. Ins. Co., 328 N.J. Super. 403, 407-08 (App. Div. 2000).

We are satisfied that the record supports Judge Hogan's conclusion that plaintiff failed to honor her contractual and statutory duties of promptly notifying NJM of the occurrence of the accident, in the specific context of an UM coverage claim. Her application for PIP benefits does not carry over to put NJM on notice of her UM coverage claim, because plaintiff has an independent contractual duty to specifically comply with the requirements outlined in the UM coverage section of the policy. At best, a PIP claim notice merely apprises the insurer that the insured has been injured in an automobile accident.

The record here is undisputed that plaintiff failed to honor all of her obligations to qualify for UM coverage. Her failure to contact the New York Police Department or the New York Transit Authority in order to document the accident, coupled with her sixteen-month delay in notifying NJM of the UM claim, prejudiced the carrier directly, by making any efforts to investigate the accident virtually futile. Plaintiff has also not come forward with any reasonable explanation for her failure to contact the police at the time of the accident, or for her failure to report the accident for UM benefits in a prompt fashion.

In this light, the trial court correctly found that plaintiff was ineligible to seek UM benefits under her policy with NJM.


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