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Valerie Cheek v. Citizens United Reciprocal Exchange (Cure)

April 19, 2012

VALERIE CHEEK, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
v.
CITIZENS UNITED RECIPROCAL EXCHANGE (CURE), IMPROPERLY PLED AS NJ INSURANCE COMPANY, DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT, AND GOVERNMENT EMPLOYEES INSURANCE COMPANY (GEICO), THIRD-PARTY DEFENDANTAPPELLANT/CROSS-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-2328-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 27, 2012

Before Judges Reisner and Simonelli.

Third-party defendant Government Employees Insurance Company (GEICO) appeals from the June 16, 2010 final judgment, which required it to pay personal injury protection (PIP) benefits to plaintiff Valerie Cheek, and found that defendant/third-party plaintiff Citizens United Reciprocal Exchange (CURE) owed no PIP coverage to plaintiff. GEICO also appeals from the August 19, 2010 order, which denied its motion for reconsideration. Plaintiff cross-appeals from that part of the June 16, 2010 judgment, which found that CURE owed her no PIP coverage. We affirm in part, reverse in part, and remand for further proceedings.

On February 21, 2006, plaintiff slipped and fell in a parking lot while attempting to open the driver's side door of an automobile owned by her boyfriend, Grover Brown. The automobile was insured under a policy issued by CURE. Brown is listed as the "named insured" on the first page of the declarations page, and he and plaintiff are listed as "drivers" on the second page. At the time of the incident, plaintiff resided with Brown and her adult daughter, Shonda Cheek (Cheek).

Cheek owned an automobile that was insured under a policy issued by GEICO.

On May 1, 2006, plaintiff submitted a PIP claim to CURE. CURE began, but did not complete, an investigation of the claim, and it did not pay plaintiff any PIP benefits. As a result, on September 17, 2007, plaintiff filed an order to show cause (OTSC) and verified complaint, seeking a judgment requiring CURE to pay her PIP benefits pursuant to N.J.S.A. 39:6A-4.

In opposition to the OTSC, CURE argued that it was not required to provide PIP coverage under N.J.S.A. 39:6A-4 because plaintiff was not a named insured under the CURE policy or a family member of the named insured residing in his household, and she did not sustain bodily injury while occupying, entering into, alighting from or using the named insured's automobile with his permission. CURE also argued that N.J.S.A. 39:6A-7b(3) excluded plaintiff from coverage because she is a family member under the terms of Cheek's GEICO policy, and thus, Cheek's policy provided primary PIP coverage. Plaintiff responded that she is a named insured under the CURE policy because she is listed as a driver on the declarations page, and CURE should be estopped from denying coverage due to its failure to respond to her claim, which necessitated the OTSC.

The trial judge summarily entered judgment in plaintiff's favor, finding that plaintiff was an insured under the CURE policy because her injury occurred while she was entering Brown's automobile. The judge also found no reason to relieve CURE of its obligation to provide PIP coverage to plaintiff based CURE's more than a one-and-one-half year delay in investigating the claim, and failure to provide a reason for the delay.

CURE appealed. We reversed, finding that defendant did not consent to summary disposition, and there was a genuine dispute as to whether plaintiff was entering Brown's automobile when she fell, which may entitle her to PIP coverage pursuant to N.J.S.A. 39:6A-4, or whether she merely grabbed at the automobile's door handle after she began to slip, which would exclude her from coverage. Cheek v. N.J. CURE Ins. Co., No. A-2629-07 (App. Div. March 4, 2009) (slip op. at 2, 4). We remanded for a hearing to establish "the manner of plaintiff's fall and whether she was entering the vehicle at the time." Id. at 5. We expressed no view as to whether the CURE policy by its terms provided PIP coverage even if the trial court determined that plaintiff fell while entering the automobile. Ibid. We left those issues for resolution "after a more complete record is developed." Ibid. We also did not address whether CURE was estopped from denying coverage due to its alleged delay in investigating the claim or due to any delay in invoking an exclusion in the policy.

Following our decision, CURE sought, and was granted, leave to file a third-party complaint against GEICO, seeking a declaration that Cheek's GEICO policy provided primary coverage for plaintiff's PIP benefits pursuant to N.J.S.A. 39:6A-4.2. CURE filed the third-party complaint on August 17, 2009. GEICO filed an answer, and asserted a statute of limitations defense. Plaintiff did not amend her complaint to join GEICO as a direct defendant.

Prior to the start of the remand hearing before a different judge, GEICO argued that plaintiff had no direct claim against it, and the statute of limitations barred the third-party complaint. Plaintiff responded that GEICO never moved for summary judgment on its statute of limitations defense, and, in any event, the hearing was limited to determining whether the evidence established her entitlement to PIP benefits. The judge treated GEICO's statute of limitations argument as an untimely motion for summary judgment, and denied it "without prejudice." The judge agreed that GEICO could later move for summary judgment on this issue if he found the GEICO policy provided primary coverage for plaintiff's PIP claim.

Brown testified that he intended to purchase an automobile insurance policy that covered him and plaintiff, who was the primary driver of one of the three vehicles insured under the policy. He admitted that he never read the policy; however, he believed it covered ...


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