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Wendy N. Fullman v. Allstate Insurance Company of New Jersey

August 29, 2012


On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-4941-05.

Per curiam.


Argued May 30, 2012

Before Judges Baxter and Nugent.

Plaintiff Wendy Fullman commenced this action against defendant Allstate Insurance Company of New Jersey after Allstate, for the fourth time, stopped paying personal injury protection (PIP) income continuation benefits to which she claimed entitlement under her personal automobile insurance policy. Following a non-jury trial in the Law Division, the court entered an order awarding plaintiff PIP income continuation benefits, counsel fees, and costs. Allstate appeals from that order, contending the trial court applied the wrong measure of damages to plaintiff's claim, and failed to consider offsets for disability payments plaintiff had received from her employer and from Social Security. We affirm.


When plaintiff was injured in an automobile accident on May 4, 1998, she was insured under a personal automobile insurance policy issued by Allstate (the 1998 policy). The 1998 policy provided PIP benefits as required by the Automobile Insurance Cost Reduction Act, N.J.S.A. 39:6A-1.1 to -35, and included additional weekly income continuation benefits up to $700 with no limit on the total amount payable. In this appeal, Allstate disputes the amount of income continuation benefits plaintiff is entitled to receive under the 1998 policy for income losses she has sustained since June 9, 2003. To provide a context for the parties' arguments, we review plaintiff's employment and accident histories, and the previous litigation between the parties concerning plaintiff's income continuation benefits.

Plaintiff began working for the United States Postal Service in 1983 or 1984. She sustained injuries in an automobile accident in 1994. According to the PIP application plaintiff filed following the 1994 automobile accident, she was absent from work from January 7 through February 19, 1994. The Allstate automobile insurance policy that covered her for the 1994 accident (the 1994 policy) included a maximum weekly income continuation benefit of $500, subject to a limit of $52,000.

Plaintiff underwent neck surgery, described as a cervical diskectomy, on June 27, 1997.*fn1 She had not returned to work when, eleven months later, on May 4, 1998, she was injured in another automobile accident. As the result of the injuries sustained in that accident, she underwent another surgical procedure involving her neck, described as a cervical diskectomy and fusion, on September 11, 1998. Since that surgery, plaintiff has filed four actions, including the lawsuit now before us, to compel Allstate to resume paying income continuation benefits.

The first time Allstate stopped paying income continuation benefits, plaintiff filed a "Demand for Arbitration" with the American Arbitration Association seeking, among other things, payment of income continuation benefits from "June 28, 1997- Present." Plaintiff filed her arbitration demand on December 1, 1998. The parties settled that dispute in January 1999, and plaintiff's attorney confirmed in a letter to Allstate's claim representative that: Allstate would pay $22,000, "which represents wage loss payment up to the date of her subsequent accident of May 4, 1998"; and "[a]ll wage loss payments, due and owing after the date of May 4, 1998, shall be processed under the claim for benefits for the May 4, 1998 accident." Allstate noted on the settlement check that the payment represented "lost income from 06-28-1997 through 05-04-1998 due to an accident on 01-07-94."

During the 2009 trial of the instant action, Allstate's claims representative testified about the January 1999 settlement. She explained, "we had decided in this case that we would settle the benefits up to the second accident and then let the -- or the '98 accident and let the benefits continue through there as warranted"; but acknowledged her testimony was "only conjecture." The representative had no independent recollection, and had no access to "the file, to my notes, to anything that occurred . . . ." Nevertheless, she also testified that Allstate agreed to pay plaintiff's post-May 4, 1998 income losses under the 1998 policy "primarily [as] a matter of administrative convenience"; but subsequently acknowledged that in order to pay plaintiff's claim under the 1998 policy, there would have to be a disability emanating from the date of loss, and that "administrative convenience" would have been an insufficient reason to process a claim under that policy.

Plaintiff's former attorney contradicted the adjuster's testimony concerning the 1999 settlement and explained that when she negotiated the settlement with Allstate, plaintiff had a projected return-to-work date and had not been declared permanently disabled. Allstate agreed to pay the post-May 1998 income losses under the 1998 policy. The attorney testified, "it was an agreement we both came to." The trial court determined that plaintiff's former attorney was "very credible," and though the Allstate adjuster was truthful, "she admittedly had no memory of the Plaintiff."

Allstate stopped making PIP payments to plaintiff a second time on August 16, 2001. Plaintiff instituted a PIP action in the Superior Court, Law Division, Camden County, which the parties settled after a non-binding arbitration but before trial. On September 10, 2002, plaintiff's counsel confirmed in a letter to Allstate's counsel that Allstate would "resume payment of my client's wage loss benefits and the payments shall be retroactive to August 16, 2001, the date upon which Allstate stopped paying [plaintiff's] benefits." Thereafter, Allstate paid the income continuation benefits to plaintiff with a check bearing the notation, "Due to an accident of 05-04-1998," and on October 1, 2002, the parties filed a stipulation dismissing the lawsuit with prejudice.

Allstate stopped paying plaintiff's income continuation benefits a third time in December 2002. To compel Allstate to resume payments, plaintiff filed a motion seeking to: set aside the stipulation of dismissal that had been filed in the Superior Court action; enforce the settlement agreement; and have a judgment entered against Allstate for attorney's fees and costs. In an order dated June 6, 2003, the court set aside the stipulation of dismissal and entered judgment against Allstate in the amount of $19,808 plus attorney's fees and costs of $2,655. On June 9, 2003, Allstate issued a check to plaintiff for income ...

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