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Axa and Eduardo Kieffer v. High Point Insurance Company

August 30, 2011

AXA AND EDUARDO KIEFFER, PLAINTIFFS-APPELLANTS,
v.
HIGH POINT INSURANCE COMPANY, DEFENDANT-RESPONDENT.
TAMESHA BROWN, PLAINTIFF-APPELLANT,
v.
FIRST TRENTON INDEMNITY COMPANY, DEFENDANT-RESPONDENT.
SANDRA KOZUSKO, PLAINTIFF-APPELLANT,
v.
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket Nos. L-3132-08 (A-2721-09T2), L-3133-08 (A-2720-09T2), and L-3135-08 (A-2722-09T2).

The opinion of the court was delivered by: Sapp-peterson, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued January 26, 2011

Before Judges Cuff, Sapp-Peterson and Fasciale.

The opinion of the court was delivered by SAPP-PETERSON, J.A.D.

These are consolidated appeals by plaintiffs, Axa and Eduardo Kieffer (Kieffer), Tamesha Brown (Brown), and Sandra Kozusko (Kozusko), individually and on behalf of others similarly situated (collectively referred to as "plaintiffs"),*fn1 appealing the dismissal of their complaints against defendants, High Point Insurance Company (High Point), First Trenton Indemnity Company (First Trenton), and New Jersey Manufacturers Insurance Company (NJM), (collectively referred to as "defendants"), for failure to state a claim upon which relief may be granted and the subsequent denial of their motion for reconsideration. We affirm substantially for the reasons expressed by Judge Daniel M. Waldman in his comprehensive and well-reasoned written opinions dated October 19, 2009 and January 25, 2010.

In their complaints, plaintiffs sought an order prohibiting defendants from refusing to pay claims for diminution in the value of their vehicles damaged as a result of vehicular mishaps; requiring defendants to notify their insureds of coverage for diminution-in-value claims and the appropriate procedures for processing such claims; and directing defendants, in the future, to honor and abide by their contractual obligations and New Jersey laws by paying diminution-in-value claims resulting from vehicular collisions or other accidental losses as presented by defendants' insureds.

Plaintiffs' complaints also sought compensatory damages on behalf of those plaintiffs who presented first-party claims for diminution in value arising out of vehicular collisions or other accidental losses within six years of the filing of the underlying complaints, whose claimed theory of recovery was based upon the absence of such coverage in their policies, and defendants' refusals to advise plaintiffs that they have a right to recover for the diminished value of their vehicles.

In granting defendants' motions, Judge Waldman found that the language of the insureds' respective policies clearly and unambiguously limited defendants' liability to repairing damaged vehicles with "like kind or parts" or compensating insureds for the "actual value of the vehicle before the loss occurred (less depreciation and deductible) at the option of the insurer." Additionally, the judge concluded that diminution-in-value claims were clearly excluded under the policies and that the reasonable expectation of the insureds, after reading the limits of liability clauses and diminution-in-value exclusions in their policies, would be that their damaged vehicles "would be restored to [their] pre-loss value, less any 'perceived loss in market or resale value.'"

Judge Waldman also rejected plaintiffs' arguments that diminution-in-value exclusions in policies were unconscionable and he found no merit to plaintiffs' contention that defendants breached the implied covenant of good faith and fair dealing. Likewise, the judge concluded that given his finding that defendants did not breach their contractual obligations to plaintiffs, the complaints failed to assert viable claims under the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, or state a claim for relief based upon reformation.

Plaintiffs moved for reconsideration and included in their motion a request that the court grant plaintiffs leave to file amended complaints asserting claims for diminution-in-value damages in the context of uninsured and underinsured motorist coverage. The court denied reconsideration, finding that the motion did not satisfy the requirements for reconsideration. The court also denied plaintiffs leave to amend their complaints, concluding their motions were not only untimely, but that reconsideration was not an appropriate procedure for seeking such relief.

On appeal, plaintiffs raise the following points for our consideration:

POINT I

THE LANGUAGE OF THE POLICIES IS AMBIGUOUS AND THUS MUST BE INTERPRETED AS AFFORDING COVERAGE FOR DIMINUTION IN VALUE.

A. INSURANCE POLICIES ARE CONTRACTS OF ADHESION WHICH MUST BE BROADLY INTERPRETED IN FAVOR OF THE INSURED.

B. DIMINUTION IN VALUE IS A RECOGNIZED MEASURE OF DAMAGES.

C. DEFENDANTS' POLICIES FAIL TO UNAMBIGUOUSLY EXCLUDE COVERAGE FOR ...


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