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Rutgers Casualty Insurance Co. v. Kennedy

September 30, 2009


On appeal from the Superior Court of New Jersey, Law Division, Camden County, L-4219-04.

Per curiam.


Argued September 14, 2009

Before Judges Rodríguez, Reisner and Yannotti.

This case, like the companion appeal decided today,*fn1 arises from a dispute over a claim for personal injury protection (PIP) benefits filed by Christopher Kennedy, premised on a policy of insurance purchased by his sister-in-law, Alice Kennedy. The insurer, Rutgers Casualty Insurance Company (Rutgers), sued Alice and Christopher seeking damages and a declaration voiding the policy on grounds of legal and equitable fraud. Alice counter-claimed against Rutgers for malicious use of process and malicious abuse of process. In the case before us, Rutgers appeals from a $392,630 judgment based on the jury's verdict in favor of Alice on her counter-claim for malicious abuse of legal process, and from the trial court's order denying Rutgers' motion for judgment notwithstanding the verdict.


On this appeal, Rutgers contends that the trial court should have dismissed the malicious abuse of process claim because plaintiff did not prove any "further acts" beyond the filing of the complaint; that Rutgers was entitled to invoke the litigation privilege; and that plaintiff did not prove a "special grievance." Rutgers also alleges that there were plain errors in the jury charge; that the court made improper evidentiary rulings; that the court should have bifurcated the compensatory and punitive damages aspects of the trial and should have stricken plaintiff's jury demand; and that opposing counsel made improper comments in summation.

We reverse, because we agree with Rutgers that plaintiff failed to prove one of the elements of a cause of action for malicious abuse of process, i.e., a further improper act beyond the initial filing of the complaint.*fn2 We also agree with Rutgers that the trial court improperly permitted plaintiff to introduce evidence of the number of claims Rutgers investigated for possible fraud and the number of fraud complaints that Rutgers filed against other insureds. In light of those conclusions, and because Alice has not cross-appealed from the jury's no-cause verdict on the malicious use of process claim, we need not address Rutgers' remaining appellate contentions.


These are the most pertinent facts. In March 2002, Alice Kennedy, who lived in Burlington City, New Jersey, applied to Rutgers for auto insurance. On the application, which asked for the names of "all licensed and unlicensed individuals permanently and/or temporarily residing with the applicant," she listed herself, her husband Joseph, and their daughter, whose driver's license was temporarily suspended. She did not list her brother-in-law Christopher Kennedy.

On May 3, 2003, Christopher was injured in an auto accident, while a passenger in a vehicle not owned or insured by Alice. In May 2003, he signed an affidavit of no insurance, attesting that he had no auto insurance of his own and was not living with anyone who had insurance.*fn3 In June 2003, he filed a claim with Rutgers for PIP benefits, representing to Rutgers that he resided in Alice's household at the time of the accident. According to Robert Cooper, the manager of Rutgers' Special Investigations Unit (SIU), the discrepancy between Christopher's claim that he lived with Alice and her failure to list him as a resident in her insurance application, caused the assigned underwriter to refer the claim to the SIU. Cooper further explained that under the State Insurance Fraud Act, insurance companies were required to investigate claims that presented "red flags" or possible indicia of fraud, and they could be fined if they failed to do so.

According to Cooper, Christopher's attorney refused to produce his client for more than ten minutes, when a proper interview would require at least an hour. Stymied, Cooper then had investigator James Angermeier interview Alice, who told him that Christopher was living at her house at the time she made the insurance application. Alice explained that she did not list him on the application because she knew his driver's license had been suspended for a long time. Later in the interview, however, Alice equivocated as to exactly when Christopher was living in her house, stating that he moved around. After Angermeier completed his investigation, Cooper sent the file to the legal department for review. On cross-examination, Cooper was asked about the number of fraud lawsuits Rutgers had filed against its insureds.

Called by Rutgers, Joseph Kennedy testified that Christopher was not living in his household in 2002, although he was visiting temporarily at the time of the 2003 accident. He testified that Christopher tended to move around and stay with various relatives. Called as Rutgers' witness, Alice corroborated Joseph's testimony. She explained that she initially told the investigator that Christopher was living with them in 2002 because she was not good with dates.

In his testimony, Christopher also confirmed that he was not living with Joseph and Alice in 2002, although he was staying with them temporarily at the time of the accident because he was "between apartments." He explained that he signed the May 2003 affidavit of no insurance because he understood it to ask if anyone in his household had insurance, and he did not consider the Kennedy's home to be his "household." He therefore believed he was entitled to PIP benefits from the insurance covering the host vehicle. He later withdrew that application ...

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