August 12, 2010
PATRICIA BARBOUR, PLAINTIFF-RESPONDENT,
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-6620-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: June 9, 2010
Before Judges Axelrad, Fisher and Sapp-Peterson.
Defendant New Jersey Manufacturers Insurance Company (NJM) appeals from orders entered on October 30, 2008, May 1, 2009 and May 4, 2009. We dismiss the appeal.
Plaintiff Patricia Barbour sustained injuries during a one-vehicle accident on March 11, 2006, in which she was a passenger on her husband David's motorcycle. David insured his motorcycle with Rider Insurance Company (Rider), with bodily injury limits of $15,000 per person and $30,000 per accident. Plaintiff and her husband had no other automobile insurance when the accident occurred.
At the time of the accident, plaintiff and her husband were full-time residents of her parents' home and were insured as resident relatives under an automobile policy issued by NJM to plaintiff's father, Rodrigo Rodriguez, for a period covering December 1, 2005 through December 1, 2006. The policy provided, among other coverage, underinsured motorist (UIM) liability benefits to the insured and others living in his residence.
On October 10, 2006, NJM received a renewal questionnaire completed by Rodriguez seeking to add plaintiff and her husband as members of the household. On October 11, 2006, plaintiff made a demand to NJM for UIM benefits through her attorney. NJM wrote to plaintiff on November 6, 2006, advising that an investigation was necessary to determine coverage. NJM conducted an interview of Rodriguez and an Examination Under Oath (EUO) of plaintiff and her husband, during which it was informed that plaintiff and her husband had been living with Rodriguez since April 2004.
By letter of April 11, 2007, NJM confirmed it would go forward with UIM arbitration. By letter of May l5, 2007, NJM responded to plaintiff's Longworth*fn1 demand and authorized acceptance of Rider's full policy tender of $15,000. At NJM's request, plaintiff was examined by defendant's doctor on November 8, 2007. Plaintiff's second EUO, originally scheduled for November 6, 2007, was rescheduled by defense counsel for December 12, 2007, and then to February 14, 2008.
On January l6, 2008, arbitration was scheduled by the neutral arbitrator for February 7, 2008. However, on January 29, 2008, defense counsel cancelled the arbitration, advising that defendant would not participate or provide UIM coverage to plaintiff. Plaintiff's counsel responded on February l5, 2008, advising that defendant was equitably estopped from denying UIM coverage and canceling the UIM arbitration pursuant to Barrett v. New Jersey Manufacturers Insurance Co., 295 N.J. Super. 613 (App. Div. l996), certif. denied, 150 N.J. 29 (1997). By letter of February 27, 2008, defense counsel indicated it would perform further research. However, after receiving no response, plaintiff filed a complaint and, on September 4, 2008, obtained an order to show cause seeking a determination of the applicability of UIM coverage under the NJM policy.
In opposing the motion at oral argument on October 30, 2008, defense counsel argued, in part, that it validly disclaimed coverage on two grounds: (1) the motorcycle owned by plaintiff's husband was a vehicle "[o]wned by or... available for the regular use of [Rodriguez] or any family member" within the exclusionary clause of the NJM policy, and (2) Rodriguez failed to inform NJM of plaintiff's residence until six months after the accident. Judge Travis Francis commented that those arguments could be made to the arbitrator.*fn2 The judge found defendant had made an "unreasonable delay in disclaiming coverage or even in giving notice of the possibility of such a disclaimer" and such "delay, combined with the prior express acknowledgement that the policy would provide coverage for the claim," warranted granting plaintiff's application to compel UIM arbitration. The court's order of the same date stated: (1) "coverage exists as a matter of law under the terms and conditions of [the] policy... issued by [NJM] to... Rodriguez and the resident relative insured Plaintiff, Patricia Barbour"; (2) NJM's "cancellation of the [subject] policy... is ineffective as a matter of law, and that UIM coverage does indeed exist under that policy for Plaintiff's accident"; (3) NJM is "ordered to provide UIM coverage on the Plaintiff's claims herein under the terms and conditions of the aforesaid policy"; and that (4) NJM is to provide the discovery requested by plaintiff within thirty days and attend and participate in the UIM arbitration within ninety days. NJM did not appeal the order compelling arbitration. See Wein v. Morris, 194 N.J. 364, 380 (2008) (holding that an order compelling arbitration is a final judgment eligible for appeal whether the trial court dismisses the action or stays it pending arbitration).
The UIM arbitration was rescheduled for February 26, 2009, which was cancelled by defense counsel the day before. Pursuant to motion, plaintiff obtained an order on April 3, 2009, compelling NJM to attend UIM arbitration on April 13, 2009. The arbitration resulted in an award in favor of plaintiff, finding her husband was 100% responsible for the accident and awarding her damages in the amount of $250,000, less the $15,000 Rider settlement. NJM did not file a motion for rejection of the award and request for trial de novo pursuant to Rule 4:21A-6(b).
In the meantime, on April l, 2009, NJM filed a motion for reconsideration based on a claim of newly discovered evidence. At oral argument on May 1, 2009, memorialized in an order of the same date, Judge Francis denied reconsideration, finding the motion was procedurally defective as all of the relief sought in the complaint was granted, namely, a determination there was coverage and compelling arbitration "so there was nothing left to litigate, following the Court's decision." The judge also found, on substantive grounds, that NJM presented nothing new.
NJM also contemporaneously filed a motion for summary judgment, returnable May 1, 2009, seeking a determination as a matter of law that plaintiff was a "named insured" under the Rider policy, which had the effect of limiting her coverage to the benefits available under that policy pursuant to NJM's step-down provision. At oral argument before another judge, defense counsel argued the issue was different from that brought before Judge Francis, who found coverage applicable to plaintiff, as NJM was now applying the coverage, which had a step-down clause. Plaintiff argued she was a covered party but not a named insured on her husband's policy and nonetheless, under Barrett, NJM was estopped from denying coverage as determined by Judge Francis. By written opinion of May 4, 2009, the judge found there was "no basis for the argument that [plaintiff] is a 'named insured' under the Rider policy" because her name did not appear in the policy and "named insured" and "additional insured" were not equivalent terms. The court concluded:
Here, because [plaintiff] was not a "named insured" on the Rider policy, it is arguable that coverage is provided by NJM; the summary judgment motion seeking an opposing conclusion is denied.
The precise language contained in the October 30, 2008, order mandates coverage "under the terms and conditions" of the NJM policy. Because this motion can be decided by analyzing the "named insured" provisions, the court takes no positions on the legal theories raised by counsel in their briefs beyond the grounds for decision set forth.
The record does not contain an order.
On June 10, 2008, NJM filed an appeal of the October 30, 2008, May l, 2009 and May 4, 2009 orders, arguing:
I. THE COURT ERRED IN HOLDING THAT PLAINTIFF WAS NOT SUBJECT TO THE 'STEP-DOWN' CLAUSE IN DEFENDANT'S INSURANCE POLICY.
II. THE COURT ERRED IN FINDING UIM COVERAGE FOR PLAINTIFF UNDER HER PARENTS' AUTOMOBILE INSURANCE POLICY WITH DEFENDANT.
A. THE MOTORCYCLE IN QUESTION IS EXCLUDED FROM UIM COVERAGE AS IT WAS AVAILABLE "FOR REGULAR USE" OF A FAMILY MEMBER.
B. THE COURT ERRED IN HOLDING THE DEFENDANT SHOULD BE EQUITABLY ESTOPPED FROM DENYING UIM COVERAGE.
C. THE COURT ERRED IN DENYING DEFENDANT'S MOTION FOR RECONSIDERATION AS NEWLY OBTAINED DOCUMENTS SHED NEW LIGHT ON THE EQUITIES INVOLVED.
D. THE COURT ERRED IN HOLDING THAT DEFENDANT'S MOTION FOR RECONSIDERATION WAS UNTIMELY.
Specifically, NJM argues that plaintiff's order to show cause was not intended to determine all coverage issues and the resulting October 30, 2008 order was not a final order. NJM's rationale is based on the comments of the judge and plaintiff during oral argument that coverage issues could be raised at arbitration and the provision directing NJM to respond to plaintiff's requested discovery in the April 3, 2009 order that compelled UIM arbitration. NJM further contends that even if plaintiff is entitled to UIM coverage, the judge erred in denying its motion for summary judgment, arguing the "unambiguous language in the Rider policy and its parroting of the precise statutory definition lead to the inescapable conclusion that plaintiff is a 'named insured' under the Rider policy," and given the "unambiguous language" in the NJM policy, the court erred in failing to enforce the step-down clause in the NJM policy. NJM requests we reverse the motion judge and hold NJM is entitled to enforcement of its step-down clause as a matter of law.
On October 30, 2008, NJM argued its position of no coverage and raised all of its defenses deriving from the policy language of Rodriguez's policy. Judge Francis held that coverage existed as a matter of law, NJM was estopped from denying UIM coverage and the parties were directed to arbitration. NJM neither sought timely reconsideration within twenty days under Rule 4:49-2, nor appealed this final order, arguing, in either instance, for example, the legal ruling was erroneous or the coverage disputes it raised were not arbitrable under the policy. Nor did NJM move for a trial de novo following the arbitration award. R. 4:21A-6(b). As NJM's appeal was not filed until June 11, 2009, over seven months after entry of the final judgment, we have no jurisdiction to review it.
NJM's motion for reconsideration five months after entry of the October 30, 2008 order was untimely and, consequently, the May 1, 2009 order denying reconsideration is not appealable. Moreover, as Judge Francis noted, following his determination that there was coverage and compelling arbitration, thereby granting all the relief sought in the complaint, "there was nothing left to litigate." Thus, even if the case were not formally dismissed as part of the order compelling arbitration but was administratively suspended until after the arbitration was complete, the litigation was resolved by the final order in October 2008. Wein, supra, 194 N.J. at 377, 380. Accordingly, because there was no case pending at the time NJM filed its summary judgment motion, the proceedings before the second judge were a nullity.