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Selective Insurance Co. of America v. Capoferri


March 19, 2010


On appeal from the Superior Court of New Jersey, Law Division, Cumberland County, Docket No. L-0444-08.

Per curiam.


Submitted October 5, 2009

Before Judges Yannotti and Chambers.

Defendant Dianne Capoferri appeals from the order of November 7, 2008, granting summary judgment to plaintiff Selective Insurance Company of America (Selective) and dismissing her counterclaim with prejudice. The order provided that her entitlement to Uninsured Motorist (UM) benefits from Selective's policy is governed by previous litigation between Capoferri and Selective. Capoferri maintains that the earlier adjudication should not govern her claim because the Legislature subsequently enacted a statute changing the law.

We affirm, agreeing with the trial court that under principles of res judicata, Capoferri's entitlement to the benefits is governed by the previous adjudication. Further, we conclude that the statute is not retroactive and would not benefit Capoferri even if the doctrine of res judicata did not apply here.


The relevant facts and procedural history are not in dispute. On March 19, 1999, Capoferri was involved in a motor vehicle accident with an uninsured motorist while operating a school bus for her employer. At the time, she had an automobile policy with The Prudential Commercial Insurance Company of New Jersey (Prudential).*fn1 That policy provided her with UM benefits up to $100,000. Her employer was insured by Selective, and Selective's policy provided UM benefits up to $500,000. However, the Selective policy contained a step-down provision that limited Capoferri's recovery for UM benefits to $100,000, representing the limit for UM benefits in her personal policy. Based on this step-down clause, Selective determined that Capoferri's claim for UM benefits under its policy was limited to $100,000.

On February 11, 2003, Capoferri brought a declaratory judgment action against Selective seeking a declaration that the step-down clause was "null and void and inapplicable," so that she could assert her claim against the full amount of UM benefits in Selective's policy. After a bench trial, the trial court issued a written opinion and order, both dated July 6, 2005, holding that Capoferri's claim for UM benefits under Selective's policy was subject to the step-down provision and limited to $100,000. That decision was affirmed on appeal. Capoferri v. Selective Way Ins. Co., No. A-6536-04 (App. Div. July 14, 2005).

Legislation was enacted, effective September 10, 2007, prohibiting step-down clauses in these circumstances, as follows:

A policy that names a corporate or business entity as a named insured shall be deemed to provide the maximum uninsured or underinsured motorist coverage available under the policy to an individual employed by the corporate or business entity, regardless of whether the individual is an additional named insured under that policy or is a named insured or is covered under any other policy providing uninsured or underinsured motorist coverage. [N.J.S.A. 17:28-1.1(f).]

Capoferri rejected a joint offer by Selective and Prudential to settle her UM claim for $100,000, the maximum she could receive in accordance with the earlier court ruling. She maintained that she was entitled to the benefit of this new legislation and could assert her claim against the $500,000 maximum of UM benefits under Selective's policy.

Selective filed this declaratory judgment action on January 28, 2008, seeking a declaration that Capoferri's UM recovery is limited to $100,000. Capoferri filed a counterclaim seeking the same relief sought in her 2003 complaint, namely a declaration that the step-down provision in Selective's policy is "null and void and inapplicable." The trial court granted Selective's motion for summary judgment and dismissed the counterclaim on two theories, first that further litigation on the applicability of the step-down clause is barred by the doctrine of res judicata, and second, that the statute is not retroactive.

On appeal, Capoferri contends that her claim for the full limits of Selective's UM coverage is not barred by the doctrine of res judicata. She does not address the issue of the statute's retroactivity.


We agree with the trial court that Capoferri's continued litigation of the limits of her claim under Selective's policy is barred by the doctrine of res judicata. She is bound by the result in the earlier litigation concluding that her claim is limited to $100,000, irrespective of subsequent changes in the law.

At the outset, we note that the question of whether an action is barred by the doctrine of res judicata "is a question of law 'to be determined by a judge in the second proceeding after weighing the appropriate factors bearing upon the issue.'" Selective Ins. Co. v. McAllister, 327 N.J. Super. 168, 173 (App. Div. 2000) (quoting Colucci v. Thomas Nicol Asphalt Co., 194 N.J. Super. 510, 518 (App. Div. 1984)). Since we are presented with a question of law, we owe the trial court's decision no deference. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

Broadly stated, the doctrine of res judicata bars "relitigation of claims or issues that have already been adjudicated." Velasquez v. Franz, 123 N.J. 498, 505 (1991). It provides that "a cause of action between parties that has been finally determined on the merits by a tribunal having jurisdiction cannot be relitigated by those parties or their privies in a new proceeding." Ibid. The doctrine fosters "the important policy goals of 'finality and repose; prevention of needless litigation; avoidance of duplication; reduction of unnecessary burdens of time and expenses; elimination of conflicts, confusion and uncertainty; and basic fairness . . . .'" First Union Nat'l Bank v. Penn Salem Marina, Inc., 190 N.J. 342, 352 (2007) (quoting Hackensack v. Winner, 82 N.J. 1, 32-33 (1980)). It also "maintain[s] judicial integrity by minimizing the possibility of inconsistent decisions regarding the same matter." Velasquez v. Franz, supra, 123 N.J. at 505.

For the doctrine of res judicata to bar an action, there must be "substantially similar or identical causes of action and issues, parties, and relief sought" between the two actions, and a final judgment must have been entered in the earlier action by a court of competent jurisdiction. Culver v. Ins. Co. of N. Am., 115 N.J. 451, 460 (1989). These criteria have been met here. In both the previous litigation and this case, Capoferri claimed that the step-down provision should not be enforced. The parties are identical in both cases. Capoferri sought the same relief in both suits, namely that the step-down provision be declared null and void and inapplicable. A final judgment on the merits was entered in the earlier action by a court of competent jurisdiction.

Capoferri argues that she is now asserting a new claim based on the newly enacted statute. She maintains that her theory of recovery in the two cases is different. She contends that in the earlier litigation she argued that the step-down clause should not apply to her, based on theories of fraud and lack of notice, while she now argues that the step-down clause should not apply to her based on the new statute.

The fact that Capoferri is asserting a new legal theory to support her claim does not circumvent the bar of res judicata. To allow new litigation based on claims already resolved by final judgments merely on the basis that the law has subsequently changed would upend all notions of finality of judgments and principles of res judicata. Here, Capoferri is seeking to relitigate her claim, finalized in 2005, based on a statute enacted in 2007. The doctrine of res judicata cannot be circumvented solely by arguing that the law has changed. See Franco v. Davis, 112 N.J. Super. 496 (Law Div. 1970) (concluding that despite a change in law eliminating parent-child immunity, a child's personal injury action against her father was barred by the doctrine of res judicata because an earlier action had been dismissed due to parent-child immunity). The doctrine of res judicata cannot be circumvented by asserting a new legal theory in a new action involving the same claim. See Restatement (Second) of Judgments § 27, comment c (1982) (when discussing whether a particular issue has been foreclosed by prior litigation, stating that "if the issue was one of law, new arguments may not be presented to obtain a different determination of that issue"). " The finality of judgments is a cornerstone of our judicial system. While judgments are subject to being opened and retroactively modified in certain extraordinary situations where justice demands, a change in precedent is not one of those extraordinary circumstances." Harris v. Martin, 834 F.2d 361, 366 (3d Cir. 1987), (declining to relieve the United States Parole Commission from a final judgment even though the Commission had succeeded in changing the law in another case).

Capoferri's reliance on City of Plainfield v. Public Service & Gas Co., 82 N.J. 245 (1980) is misplaced. In Plainfield, the City sought to compel the Public Service & Gas Co. (PSE&G) to provide free lighting services in accordance with an 1898 contract requiring PSE&G to provide free lighting service to the City's municipal buildings. Id. at 247. PSE&G challenged the enforceability of the contract under the 1911 Public Utility Act that prohibits unjust discriminatory utility rates and unreasonable preferences. Ibid. The City argued that the issue had been resolved by litigation in 1916 in which the Court of Errors and Appeals had found the contractual provision enforceable. Id. at 247-48. Rejecting the City's res judicata argument, the Court found that review of the legal issue involved, namely the interpretation and application of a regulatory statute, was warranted in order to avoid the inequitable administration of law and in light of the public interests involved in the issue. Id. at 258-59.

Capoferri's claim does not fall within the narrow exception to the principles of res judicata recognized in Plainfield; her claim for additional UM benefits from Selective does not involve the public interest nor does it rise to the inequitable administration of the law. Also, notably, the situation in Plainfield involved an ongoing relationship between the parties, and application of the 1916 decision would have required PSE&G to provide free lighting services to the City indefinitely. The Court did not retroactively undo the provision of the contract, but made its decision prospective only. Id. at 260. No similar circumstance is present here; res judicata is not being invoked to govern ongoing transactions; rather it is being used to bring finality to one specific claim for UM benefits arising out of one accident.

We recognize that courts have declined to apply the doctrine of res judicata when a party's case falls within an express statutory declaration allowing such a claim to go forward despite a prior adjudication. See Yaris v. Special School Dist. of St. Louis County, 661 F.Supp. 996 (E.D. Mo. 1987)(allowing a claim for attorneys' fees after a final judgment where plaintiffs' claim clearly fell within the express retroactivity provision of the statute); Burdick v. AfrimetIndussa, Inc., 525 N.Y.S.2d 542 (Sup. Ct. 1988)(permitting plaintiffs' case to go forward under the revival of actions provision of a toxic tort statute, although identical earlier litigation had been dismissed as time barred). However, the statute in the case before us provides no express retroactivity provision covering earlier litigation.

Indeed, even if the doctrine of res judicata were inapplicable here, the newly enacted statute governing step-down clauses would not apply to Capoferri's claim because the provisions of that statute are not retroactive. See Olkusz v. Brown, 401 N.J. Super. 496 (App. Div. 2008) (holding that N.J.S.A. 17:28-1.1(f) is not retroactive); but see Hand v. Philadelphia Ins. Co., 408 N.J. Super. 124 (App. Div. 2009) (holding that N.J.S.A. 17:28-1.1(f) is retroactive but declining to apply the statute retroactively because to do so would be manifestly unjust), certif. denied, 200 N.J. 506 (2009). The trial court concluded that N.J.S.A. 17:28-1.1(f), passed in 2007, long after her accident, is not retroactive. Capoferri has not briefed that issue. Any issue not briefed is deemed waived. Pressler, Current N.J. Court Rules, comment 4 on R. 2:6-2 (2009); see also Jefferson Loan Co. v. Session, 397 N.J. Super. 520, 525 n.4 (App. Div. 2008).

In sum, we conclude that under principles of res judicata, Capoferri's claim for UM benefits is governed by the decision in the earlier litigation. As a result, the step-down provision in Selective's policy, limiting her claim for UM benefits to $100,000, may not be challenged in this subsequent litigation. Further, even if the doctrine of res judicata did not apply, the subsequently enacted legislation set forth in N.J.S.A. 17:28-1.1(f) may not be applied retroactively to her claim.


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