Estate of Hainthaler v. Zurich Ins.

• Decision Date: 07 August 2006
• Citation: Estate of Hainthaler v. Zurich Ins., 903 A.2d 1103, 387 N.J. Super. 318 (N.J. Super. 2006)
• Parties: The ESTATE OF Gertrude HAINTHALER, Richard Hainthaler, Individually, and as Executor of the Last Will and Testament of Gertrude Hainthaler, Plaintiffs-Appellants, v. ZURICH COMMERCIAL INSURANCE, Defendant-Respondent.
• Court: New Jersey Superior Court

Page 1103

903 A.2d 1103

387 N.J. Super. 318

The ESTATE OF Gertrude HAINTHALER, Richard Hainthaler, Individually, and as Executor of the Last Will and Testament of Gertrude Hainthaler, Plaintiffs-Appellants, v. ZURICH COMMERCIAL INSURANCE, Defendant-Respondent.

Superior Court of New Jersey, Appellate Division.

Argued June 6, 2006.

Decided August 7, 2006.

Diane Marie Acciavatti, argued the cause for appellants.

James P. Lisovicz, Morristown, argued the cause for respondent (Coughlin, Duffy, Kelly, Lisovicz, Midlige and Wolff, L.L.P., attorneys; Mr. Lisovicz, of counsel and Joseph C. Amoroso, on the brief).

Before Judges KESTIN, R.B. COLEMAN and SELTZER.

The opinion of the court was delivered by

SELTZER, J.A.D.

Plaintiff¹ appeals from a summary judgment dismissing her complaint to compel defendant to participate in underinsured motorists (UIM) arbitration on the ground that it was filed beyond the six-year period of limitations the judge found applicable to the action. Because we believe the initial agreement of defendant to submit to arbitration requires that the motion to dismiss be analyzed with a view to considerations other than the statute of limitations, we reverse and remand for further proceedings.

The facts presented on defendant's motion for summary judgment were essentially uncontested. On December 27, 1997, Gertrude Hainthaler was injured by a vehicle insured under a policy with liability limits of $25,000. Ms. Hainthaler was insured under a policy issued to her son, plaintiff Richard Hainthaler, affording her $1,000,000 of UIM coverage. Defendant's predecessor was promptly notified of the accident and the possibility of a UIM claim. Defendant ultimately authorized a settlement with the tortfeasor on April 23, 1998. See Rutgers Casualty Ins. Co. v. Vassas, 139 N.J. 163, 171, 652 A.2d 162 (1995) (adopting the procedure described in Longworth v. Van Houten, 223 N.J.Super. 174, 538 A.2d 414 (App.Div.1988)).

Plaintiff entered a nursing home on January 11, 1999. At defendant's request, her counsel forwarded copies of her available medical records to defendant's counsel. Additional medical information was supplied by letters dated March 2, 1999, and April 19, 1999. Settlement negotiations with respect to the UIM claim failed and, on October 18, 1999, plaintiff's counsel notified defendant that "this office hereby appoints Anna M. Liuzzo, Esquire as its arbitrator. Kindly advise the name of your party-appointed arbitrator." On November 19, 1999, defense counsel responded: "This letter shall serve to advise you that Zurich hereby appoints Scott A. Parsons, Esquire as their arbitrator with regard to the above referenced under-insured motorist arbitration." The record does not reveal any action taken by the named arbitrators after their appointment.

Defendant asked for additional medical information in November 1999, December 1999, June 2000, and August 2000. The requests were accompanied by disclaimers that they were "without prejudice to any questions of coverage that may exist in this matter" and that defendant "reserve[d] the right to contest all coverage questions at a later time should they, in fact, arise[]." Defendant, however, never repudiated the agreement to arbitrate evidenced by its November 1999 letter appointing an arbitrator.

On August 22, 2000, defendant's counsel authored a letter to plaintiff's counsel, reminding her that defendant's discovery requests had gone unanswered. Counsel then advised that, "in light of the passage of time and the complete absence of any discovery or communication from your office, we will assume that your client does not wish to proceed with this matter and we will close out our file. If this is not accurate, please provide all the information so that we can proceed with this matter in an ordinary fashion." Plaintiff's counsel responded, on September 20, 2000, to advise that Ms. Hainthaler had died on September 12, 2000, and agreed to forward outstanding medical liens when received.

On February 26, 2001, defendant acknowledged receipt of the requested medical records and asked for a copy of the entire convalescent center file together with a death certificate. Counsel then added, "[f]inally, rather than selecting a three member panel of arbitrators, I would like to proceed by utilizing a retired judge to review what is likely to be extensive medicals in this matter and hear the appropriate testimony. Would you kindly advise me if you would consent to proceed in that regard and whether you have any particular judge you would prefer to use." On March 29, 2001; May 3, 2001; and June 29, 2001, defendant sought further medical information.

Plaintiff did not respond to defendant's requests or communicate with defendant again until December 8, 2003, when plaintiff's counsel faxed a letter to defense counsel indicating she intended to pursue the claim and asking "if Zurich will honor said claim." She also advised defendant that "[i]n the event I do not hear from you by the end of this week, I will be forced to prepare an Order to Show Cause." In the same letter, plaintiff rejected the suggestion that the arbitration proceed before a judge rather than a panel.

On December 11, 2003, defense counsel wrote back, advising that the file had been closed and that he could not respond to the inquiry as to whether Zurich "will honor said claim" until he reviewed the file. Moreover, counsel advised that "I do not believe that an Order to Show Cause is appropriate until I have been able to review the file.... [I]f you insist on proceeding by way of order to show cause, I will request fees in light of the history of this action."

Plaintiff provided additional information by letter dated December 24, 2003, and, on January 23, 2004, defendant acknowledged receipt of that information, noting again the failure of plaintiff to provide other previously requested information. That letter suggested, for the first time, the possibility that "Zurich will assert the Statute of Limitations." On April 12, 2004, counsel for Zurich, in fact, asserted that the applicable statute of limitations barred plaintiff's claim.

On July 26, 2004, plaintiff filed a verified complaint, seeking a declaration that "Zurich is obligated to arbitrate" the UIM claim; to compel Zurich to submit to "underinsured motorists ... coverage arbitration;" to appoint a third arbitrator and schedule a hearing date; and fees together with any other appropriate relief.

On the date set for consideration of a proposed order to show cause, defendant asserted that the plaintiff's right to seek to compel arbitration was governed by the statute of limitations applicable to contract actions, N.J.S.A. 2A:14-1, and that the six-year statute began to run on the date of the accident. See Green v. Selective Insurance Co. of America, 144 N.J. 344, 354, 676 A.2d 1074 (1996).² Thus, defendant asserted, the time within which plaintiff might have filed suit expired on December 27, 2003, and the complaint was, therefore, filed some seven months too late. The plaintiff resisted that analysis. She claimed that "if [defendant] is going to raise [the statute of limitations], after they've investigated a claim and agreed to arbitrate it, that they have to tell us that [the defendant will invoke the statute of limitations]."

The judge focused on the possible entitlement of plaintiff to some relief from the statute, but acknowledged that defendant might have defenses other than the statute of limitations. She declined to issue summary relief, explaining:

The Court finds that there are fact disputes that surround the entitlement of the plaintiff to a waiver — to an — equitable tolling of the statute of limitations. That there are other defenses to the claim, such as the defense of failure to cooperate, the defense of unclean hands on the part of the plaintiffs in failing toor at least, estoppel, laches in failing to proceed with the arbitration. That is going to require a trial.

The judge permitted some discovery to determine if defendant should be equitably estopped from asserting the statute, see Price v. N.J. Mfrs. Ins. Co., 182 N.J. 519, 524-25, 867 A.2d 1181 (2005), and, presumably, to explore the other defenses she had identified. After discovery had been completed, defendant moved for judgment. The motion judge determined that the action to compel arbitration was time barred and that plaintiff was not entitled to relief from that bar. She explained:

Zurich did absolutely nothing at any point in time ... that [] justified the tolling of the Statute of Limitation. It's clear that the passage of time is solely the result of plaintiff failing to prosecute the claim. There was nothing done by Zurich at any point in time that would lead the plaintiff to believe that if the plaintiff continued to sit quiet on its claim and take no action, that the carrier would waive the Statute of Limitations defense.³

Since the suit to compel arbitration was initiated more than six years after the accident and since plaintiff was not entitled to relief from the applicable limitation period, the judge dismissed the suit.

Whether a particular cause of action is barred by a statute of limitations is determined by a judge rather than a jury. See Lopez v. Swyer, 62 N.J. 267, 275, 300 A.2d 563 (1973); Fernandi v. Strully, 35 N.J. 434, 449, 173 A.2d 277 (1961). The judge's determination of the legal consequences of established facts is not due any special deference from us. See Manalapan Realty, L.P. v. Twp. Committee of Manalapan, 140 N.J. 366, 378, 658 A.2d 1230 (1995). Accordingly, we review de novo the decision to dismiss.

We take, as our starting point, the nature of the claim that defendant asserts, and the judge found, was time barred. That claim was to compel defendant to arbitrate, pursuant to its contractual agreement. In fact, defendant had recognized its obligation pursuant to that agreement. Moreover, when it named an arbitrator, it...