The opinion of the court was delivered by: Hon. Garrett E. Brown,
This matter comes before the Court upon the motion for dismissal and/or summary judgment (Doc. No. 40) filed by Plaintiff Connie Carr ("Plaintiff"). Plaintiff seeks judgment on Defendant Citizens United Reciprocal Exchange's (CURE) counterclaim under the New Jersey Insurance Fraud Prevention Action (NJIFPA), on the ground that the claim is barred by NJIFPA's six-year statute of limitations, N.J. Stat. Ann. § 17:33A-7e. The Court has considered the parties' submissions and decided the motion without oral argument pursuant to Federal Rule of Civil Procedure 78. For the following reasons, the Court will grant Plaintiff's motion for summary judgment on CURE's NJIFPA counterclaim.
As noted in this Court's January 31, 2011 Opinion ("January 31 Opinion"), this insurance dispute arises from a February 7, 2002 car accident in Fort Lauderdale, Florida, and CURE's subsequent denial of coverage. At the time of the accident, Plaintiff was driving a 1993 Oldsmobile Cutlass covered by CURE's automobile insurance policy number J00014559. (January 31 Opinion at 2 (citations omitted).) Plaintiff first notified CURE of the accident on June 12, 2002, and Plaintiff thereafter completed a Driver's Report of Automobile Accident and application for personal injury protection (PIP) benefits on or about June 27, 2002. (Id.) In conjunction with the filing of the accident claim, Plaintiff, in the presence of her attorney, made a recorded statement with CURE representatives via telephone on June 27, 2002. During the recorded statement, Plaintiff revealed inter alia that she had moved to Florida and that she kept the covered vehicle garaged in Florida. (Id. at 2--3.) Subsequent to Plaintiff's recorded statement, CURE denied coverage for Plaintiff's PIP claim on July 29, 2003, citing Plaintiff's "material misrepresentation[s] and/or omission[s]" concerning Plaintiff's move to Florida as grounds for retroactively voiding her policy. (Id. at 3.)
Plaintiff filed suit on July 28, 2009, alleging breach of contract, and filed an Amended Complaint on April 16, 2010, adding a claim for declaratory judgment under 28 U.S.C. § 2201. Defendant filed its Answer and Counterclaims on May 6, 2010, seeking a declaration that Plaintiff's material misrepresentations rendered the policy void, as well as damages under the NJIFPA, N.J. Stat. Ann. §17:33A-1, et seq. On September 24, 2010, CURE moved for summary judgment on all claims, or alternatively for dismissal due to lack of subject matter jurisdiction.
The Court resolved CURE's motion by Opinion and Order of January 31, 2010. First, the Court addressed CURE's jurisdictional arguments, and held that diversity jurisdiction was proper under 28 U.S.C. § 1332(a). (Id. at 4--8.) The Court then granted CURE's motion for summary judgment on Plaintiff's affirmative claims, finding that Plaintiff's Complaint in July 2009, more than seven years after the subject automobile accident in February 2002, fell outside the limitations period imposed by the PIP statute of limitations, N.J. Stat. Ann. § 39:6A:14-1, and was therefore time-barred. (Id. at 9--13.)
At the same time, the Court denied Defendant's motion for summary judgment on its NJIFPA counterclaim, reasoning that the claim was barred by NJIFPA's six-year statute of limitations, N.J. Stat. Ann. § 17:33A-7e.*fn1 (January 31 Opinion at 17--18.) In denying summary judgment on the CURE's counterclaim, the Court acknowledged that accrual under NJIFPA statute of limitations was an issue of first impression, and in lieu of clear guidance on the matter, this Court looked to New Jersey's accrual rule for common law fraud cases for guidance. The Court reasoned:
Generally speaking, a cause of action accrues under New Jersey law on "the date on which 'the right to institute and maintain a suit' first arose." Rosenau v. City of New Brunswick, 14 51 N.J. 130, 137 (1968) (quoting Fredericks v. Town of Dover, 125 N.J.L. 288, 291 (E. & A. 1940)); see also Russo Farms, Inc. v. Vineland Bd. of Educ., 144 N.J. 84, 98 (1996). For fraud claims, a court's determination of when the cause of action accrued is guided by the legal elements necessary to state a claim for fraud, which are: (1) a knowing, material misrepresentation; (2) intent that the receiving party would rely on the misrepresentation; and (3) reliance on those misrepresentations to the detriment of the relying party. See, e.g., Hartford Acc. & Indem. Co. v. Baker, 208 N.J. Super. 131, 136 (L. Div. 1985) (citing Bilotti v. Accurate Forming Corp., 39 N.J. 184 (1963); United Jersey Bank v. Wolosoff, 196 N.J. Super. 553 (App. Div. 1984)). Because damages are an integral part of a common law fraud claim, the cause of action "will accrue only when 'damage' is inflicted." Holmin v. TRW, Inc., 330 N.J. Super. 30, 36 (App. Div. 2000). Thus, in order to determine when CURE's cause of action accrued, the Court must consider when the alleged material misrepresentations occurred, and when the alleged injury to CURE took place. (Id. at 14--15.)
CURE had argued that Plaintiff made material misrepresentations both before and after the 2002 accident, consisting of: (a) her failure to disclose her relocation to Florida, (b) her submission of a New Jersey registration card bearing an inaccurate New Jersey residence when she added the '93 Oldsmobile to the insurance policy in or about January 2002, and (c) information she gave during the June 27 recorded statement. Nevertheless, CURE argued that its cause of action accrued when Plaintiff filed her Complaint in July 2009, because CURE suffered a distinct injury from having to defend against Plaintiff's lawsuit. Toward this end, Defendant argued that Plaintiff made additional misrepresentations during this litigation with her 2010 deposition testimony and affidavit, which CURE claimed contradicted statements made during the June 27 statement. This Court rejected that argument as follows: neither Plaintiff's filing of a lawsuit in 2009 nor Plaintiff's alleged misrepresentations made during this litigation is the underlying event that gave rise to Defendant's cause of action, because it cannot be said that Defendant relied on these alleged misrepresentations to its detriment.
Rather, accepting CURE's theory of misrepresentation to be true for purposes of argument, Plaintiff made material misrepresentations and/or omissions during 2001 and 2002, which were revealed by concessions she made during the recorded statement of June 27, 2002. CURE appears to have relied on the June 27 statement when it cancelled Plaintiff's policy in 2003, and it relies heavily on the June 27 statement now in seeking summary judgment. Such reliance reveals that, as of June 27, 2002, CURE had reason to believe that Plaintiff had knowingly made material misrepresentations to procure automobile insurance she otherwise would not have been able to obtain. (Id. at 16 (record citations omitted).) With regard to CURE's argument that it did not suffer an injury at all until Plaintiff filed the lawsuit, the Court disagreed, reasoning that:
[e]ven though Defendant did not pay benefits on Plaintiff's policy, presuming that material misrepresentations were made, CURE suffered a cognizable injury when it received the fraudulent claim for PIP benefits on or about June 27, 2002, because CURE had to expend resources investigating the claim. Further, CURE's injury would have dated back to the point of the insured's first misrepresentation, because CURE would have expended resources when it approved the insurance application in the first place. To hold otherwise would require an insurance company to be sued by the insured before the insurance company would have standing to bring an NJIFPA claim. The statute does not contain such a prerequisite, and New Jersey courts have not construed NJIFPA in such a manner. See, e.g., Allstate Ins. Co. v. Greenberg, 376 N.J. Super. 623, 638--41 (L. Div. 2004) (recognizing that "each and every submission of documents to an insurance carrier in support of payment for PIP medical benefits to which a health care provider knowingly is not entitled or concealment of material facts, such as self interest, is a separate offense" under the NJIFPA, and entering judgment in favor of the insurance company); Material Damage Adjustment Corp. v. Open MRI of Fairview, 352 N.J. Super. 216, 230--31 (L. Div. 2002) (entering judgment in favor of insurance company where defendant, an unlicensed health care provider, had submitted numerous claims for reimbursement without disclosing its license status). (Id. at 16--17.)
Ultimately, the Court determined that Defendant's NJIFPA counterclaim accrued on or about June 27, 2002, because it arose from alleged misrepresentations that CURE would have relied upon prior to the June 27 statement, "and because Defendant would have had reason to suspect an injury based on Plaintiff's statements during the June 27 statement." (Id. at 17.) The Court therefore concluded that the six-year statute of limitations for Defendant's NJIFPA counterclaim expired at the end of June 2008, more than a year before the filing of this lawsuit, and nearly two years before Defendant filed its counterclaims. (Id.) In light of this ruling denying summary ...