Green v. Selective Insurance Co. of America

POLLOCK, J.,

concurring.

In Zirger v. General Accident Ins. Co., 144 N.J. 327, 333, 676 A.2d 1065, 1068 (1996), also decided today, the Court recognizes that contract law governs the resolution of disputes about UM and UIM coverage. Consequently, a cause of action for UIM benefits does not accrue until the carrier breaches the contract, for example, by denying the benefits. Allstate Ins. Co. v. Altman, 200 N.J.Super. 269, 275, 491 A.2d 59 (App.Div.1984).

In the present case, recognizing the contractual nature of a UIM claim, the majority asserts that recovery of UIM benefits is “conceptually different from recovery in tort.” Ante at 333, 676 A.2d at 1068. Curiously, however, the majority ignores the contractual nature of the claim in determining the event that starts *358the running of the statute of limitations. N.J.S.A. 2A:14r-l. Even more curiously, the majority concludes that the limitations period runs from the date of the accident, a conclusion that implicitly recognizes a UIM claim as sounding in tort. Yet, the majority rejects the proposition that an insured’s right of action against the UIM carrier stems from the tort claim against the tortfeasor. Ibid.

Although the majority does not expressly say so, it solves the riddle by asserting that the Legislature apparently intended that the statute of limitations on the contract claim starts to run on the date of the accident. Ante at 350, 676 A.2d at 1078. Significantly, it cites no statutory language or history to support its assertion.

Instead, the majority simply refers to the legislative policy to “ ‘provide expeditious protection to the innocent victims of financially irresponsible motorists.’ ” Ante at 351, 676 A.2d at 1078 (quoting Longworth v. Van Houten, 223 N.J.Super. 174, 184, 538 A.2d 414 (App.Div.1988)). Missing from the opinion is an explanation how the majority furthers that protection by measuring the right of claimants to sue from the date of the accident, rather than from the date of the denial of UIM benefits.

The majority’s requirement that a claimant must bring an action on a UIM claim within six years from the accident date does not protect accident victims. Existing case law, in contrast, protects those victims by permitting the assertion of UIM claims before the determination of tort actions. See Rutgers Casualty Ins. Co. v. Vassas, 139 N.J. 163, 171, 174, 652 A.2d 162 (1995) (adopting Longworth); Longworth, supra, 223 N.J.Super. at 193, 195, 538 A.2d 414 (stating that an insured may seek arbitration of UIM benefits before resolution of underlying tort action). No similar salutary effect follows from requiring an insured to file a premature claim for UIM benefits.

Implicit in the majority opinion is an awareness that an insured may not know on the date of the accident that a potential tortfeasor is underinsured. Ante at 351, 678 A.2d at 1078. In *359such a case, it hardly seems fair to measure the insured’s right to sue from that date.

Most claimants will have an economic incentive to file timely claims for UIM benefits. UIM claimants are already obligated to notify carriers of accidents and of ensuing litigation. “If, during the pendency of the claim, the tortfeasor’s insurance coverage proves insufficient to satisfy the insured’s damages, then the insured should again notify the UIM insurer of that fact.” Vassas, supra, 139 N.J. at 174, 652 A.2d 162. Additionally, the insured must notify the UIM insurer of any settlement offer or arbitration award that does not completely satisfy the claim because the tortfeasor is underinsured. Ibid. Finally, insurance carriers can protect themselves by including in their policies time limits for filing UIM claims. Under existing law, moreover, insurers can require insureds to file timely claims. Thus, present law balances an insured’s right to file a UIM claim within six years of the insurer’s breach of the contract with the correlative duty to provide the insurer with reasonable notification of the status of the underlying tort action. That strikes me as a fair and reasonable accommodation of the respective rights of the parties. I would leave to the Legislature a more marked accommodation.

My further concern is that the majority, to provide what it perceives to be a more practical procedure for UIM claims, has unintentionally sacrificed doctrinal consistency for practicality. Established contract law supports the same result as that reached by the majority, that Green may pursue his suit against Selective. Thus, my difference with the majority is not the result but the means it uses to reach that result. Public acceptance of the judiciary depends not only on results of judicial decisions, but on the means courts use to reach those results. Regrettably lacking from the majority opinion is any reason for the result reached other than the majority’s desire to reach that result.

I also believe that the majority misplaces its reliance on a leading automobile-insurance text, Cynthia M. Craig & Daniel J. Pomeroy, New Jersey Auto Insurance Law, § 23:3-l(b), at 299 *360(1996). According to the majority, “[i]n a somewhat analogous context, Craig & Pomeroy observe that UM claimants must raise their demand for arbitration within six years of the accident.” Ante at 353, 676 A.2d at 1079. The majority opinion, however, omits any reference to the statement in the next paragraph of Craig & Pomeroy’s treatise:

It is noteworthy that suit against an insurer for breach of the contractual obligation to arbitrate a UM claim is timely when brought within six years of the insurer’s refusal to arbitrate. In that regard, the six-year limitation period does not begin to run until the insurer rejects the UM claimant’s arbitration demand.
[Craig & Pomeroy, supra, § 23:3 — 1(b), at 299.]

Although Craig & Pomeroy recognize the benefit of encouraging insureds to file timely claims for benefits, they also recognize that the denial of such claims is a breach of contract that starts the running of the six-year statute of limitations under N.J.S.A 2A:14r-l.

To the extent that the majority opinion may be read to propose that the underlying tort action and the claim for UIM benefits should be adjudicated in one proceeding, ante at 352, 676 A.2d at 1079, no one at any stage in these proceedings — not the parties, the Law Division, or the Appellate Division — has suggested that proposal. At a minimum, I would permit the parties to comment on the proposal before writing it into the law of the State. That practice would include the parties in the process and provide the Court with the benefit of their thinking.

In sum, the six-year statute of limitations did not begin to run until Selective breached its contract by denying Green’s claim for UIM benefits. That denial occurred in February, 1993. Thus, the limitations did not expire on Green’s claim before he instituted this action.

Justice STEIN joins in this concurrence.