April 28, 2011
BRUCE K. MARTIN, PLAINTIFF-APPELLANT,
FIREMAN'S FUND INSURANCE COMPANY AND THEIR WHOLLY OWNED SUBSIDIARY, PARKWAY INSURANCE COMPANY, DEFENDANTS-RESPONDENTS, AND ARROWPOINT CAPITAL CORP., FORMERLY ROYAL AND SUNALLIANCE INSURANCE COMPANY, DEFENDANTS.
On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-287-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: March 16, 2011
Before Judges Cuff and Simonelli.
On February 17, 2009, plaintiff Bruce K. Martin filed a complaint against defendant Fireman's Fund Insurance Company (Fireman's)*fn1 for uninsured motorist (UM) benefits. He appeals from an order granting defendant's motion for summary judgment. We affirm.
The February 2009 complaint has its genesis in an April 17, 2003 motor vehicle accident between plaintiff and Gustavo M. Cortez. Plaintiff filed a complaint against Cortez and the owner of the vehicle involved in the collision on March 28, 2005. They did not file an answer, and a judge entered a default judgment in the amount of $32,500 against them on March 23, 2007.
Plaintiff, a named insured on a policy of insurance issued by Fireman's, filed a claim for UM benefits with his insurer on April 12, 2007.
In its April 2010 motion for summary judgment, Fireman's argued that plaintiff violated his duty to promptly report the fact of the 2003 collision and his injuries sustained in that accident. Fireman's also asserted that plaintiff never informed it of the complaint he filed against the owner and operator of the other vehicle or informed it of the course of that litigation. Fireman's also asserted, and plaintiff does not disagree, that plaintiff never notified Fireman's of the April 17, 2003 accident before April 12, 2007. In addition, Fireman's asserted that it suffered prejudice by plaintiff's failure to comply with the terms of the policy.
In response, plaintiff argued that the Fireman's policy of insurance does not require a notice of claim for UM benefits within a specified time. He also stated that timely notice of an accident does not pertain to UM benefits. Therefore, plaintiff argued he breached no duty imposed by the policy. Plaintiff also alleged that Fireman's failed to investigate his claim or even contact him about his claim when it received notice of it. Accordingly, Fireman's cannot claim that plaintiff's action or inaction caused it any prejudice. Finally, plaintiff argued that Fireman's does not specifically identify how it has been prejudiced due to the delayed notice.
In her oral opinion, Judge McDonnell found that Fireman's suffered appreciable prejudice because the four-year delay prevented the insurer from participating in the initial action and from investigating the claim. The judge, therefore, granted Fireman's motion for summary judgment.
On appeal, plaintiff argues that the record does not support the finding that Fireman's suffered appreciable prejudice. Therefore, he urges that we reverse the April 16, 2010 order. We disagree.
Failure by an insured to notify an insurer of an accident or to cooperate in the investigation of a claim may result in loss of benefits provided by a policy of insurance. See generally Rutgers Cas. Ins. Co. v. Vassas, 139 N.J. 163 (1995) (failure to notify insured's insurance company of accident and injuries); Hager v. Gonsalves, 398 N.J. Super. 529 (App. Div.) (failure to cooperate to determine permissive user), certif. denied sub nom. High Point Ins. Co. v. Rutgers Cas. Ins. Co., 195 N.J. 522 (2008). In Cooper v. Government Employees Insurance Co., 51 N.J. 86, 94 (1968), the Court held that an insurance company cannot avoid its contractual obligation to provide coverage, even in the face of no notice of an accident, occurrence, or loss, unless the breach of the notice provision caused appreciable prejudice. The appreciable prejudice standard has been applied in various failure to notify contexts. See Gazis v. Miller, 186 N.J. 224, 230 (2006) (collecting cases); see also Hager, supra, 398 N.J. Super. at 536 (applying appreciable prejudice standard to UM claims). It is considered the appropriate standard whenever breach of a prompt notice requirement without more would prevent an injured insured from recovering anticipated benefits. Gazis, supra, 186 N.J. at 231.
Here, plaintiff was driving a vehicle owned by his employer at the time of the accident. It is undisputed that Fireman's, plaintiff's personal automobile liability carrier, had no knowledge of the accident and plaintiff's injuries until virtually four years after the accident. Plaintiff had an obligation to notify Fireman's when he filed the complaint against the tortfeasor, Vassas, supra, 139 N.J. at 174, but did not do so. When Fireman's learned of the UM claim, plaintiff had obtained a default judgment. Fireman's lost its opportunity to intervene in the action against the tortfeasor. Zirger v. Gen. Acc. Ins. Co., 144 N.J. 327, 341 (1996); Vassas, supra, 139 N.J. at 175. This loss of opportunity caused appreciable prejudice.
We, therefore, affirm the April 16, 2010 order granting Fireman's motion for summary judgment.