JANET NIEVES v. ALLSTATE INSURANCE COMPANY (2011)

Plaintiff Janet Nieves appeals from the order granting summary judgment to defendant Allstate Insurance Company (Allstate), dismissing her bad faith claim.   We now affirm.

The relevant facts are not in dispute and may be summarized as follows.   Plaintiff was injured in a motor vehicle accident on September 17, 1997.   The driver of the vehicle involved in the collision was Eduardo Munoz, and the owner of the vehicle was Enrique Rivera–Arroyo.   Allstate was the insurer.

The matter was tried before a jury, which rendered a verdict on May 4, 2001 in the amount of $185,000.   Following post-trial motions, Allstate deposited its $50,000 policy limit with the court by order of February 8, 2002.

Subsequently, Rivera–Arroyo died on November 9, 2002, leaving no assets at the time of his death.   His death occurred six days prior to this court's affirmance of the verdict rendered in plaintiff's favor.  Nieves v. Munoz, No. A–5778–00 (App.Div. Nov. 15, 2002) (slip op. at 11).

Plaintiff brought a direct action against Allstate in 2003 for bad faith in refusing to settle her claim against Munoz and Rivera–Arroyo.   On May 11, 2004, that complaint was dismissed without prejudice, noting that an assignment from either defendant would be necessary to maintain a claim against Allstate.   Juana Arroyo Lopez, the mother of decedent, Enrique Rivera–Arroyo, was declared his sole heir in a decision of March 9, 2007 by Judge Héctor Clemente Del Gado, Superior Court of Bayamón, Commonwealth of Puerto Rico. The decision also noted that the “decedent died intestate, without any assets.”

On February 8, 2007, Juana Arroyo Lopez assigned her late son's bad faith claim against Allstate, arising out of the motor vehicle accident of September 17, 1997 to plaintiff.   On September 22, 2008, plaintiff filed suit again with the assignment, pursuing it as a first party claim.   On July 23, 2010, that suit was dismissed on a summary judgment motion.

In dismissing the action, Judge Mark Baber had this to say:

Absent his having the judgment executed against any of his property during his lifetime and having no judgment—no property left in the estate from which the judgment could be paid in whole[,] or in part, there is no pecuniary loss that Mr. Arroyo suffered that could be enforced by way of assignment.

It's an assignment[,] but it's an assignment of a right that under these circumstances is worth nothing.

It does not provide any basis for [plaintiff] now to obtain a judgment against Allstate based on the assignment of Mr. Ar[r]oyo's right against Allstate.   The motion for summary judgment is granted.

On appeal, plaintiff raises the following arguments for our consideration:

POINT I

WHERE THE CAUSE OF ACTION FOR BAD FAITH AGAINST ALLSTATE ACCRUED WHEN THE APPELLATE DIVISION AFFIRMED THE JUDGMENT AGAINST ARROYO, ANY ANALYSIS OF “HARM” TO ARROYO MUST BE MADE AT THE TIME OF THE ACCRUAL.

POINT II

NEW JERSEY SHOULD ADOPT THE JUDGMENT RULE WITH REGARD TO AN INSURED'S REMEDY WHERE AN INSURER BREACHES ITS GOOD FAITH DUTY TO RESOLVE A CLAIM AGAINST THE INSURED RESULTING IN AN EXCESS VERDICT.

In Point I, plaintiff argues that the time for determining whether there was any harm to Rivera–Arroyo should be made at the time of the cause of action.   Plaintiff maintains that this was when the judgment was affirmed on appeal.

In addressing this point, it must be noted that this court's affirmance occurred six days after Rivera–Arroyo died when he had no assets to his name or his estate.   Thus, even if we agreed with plaintiff and measure the state of Rivera–Arroyo's assets when the appeal was decided, there was no harm to Rivera–Arroyo because he had no assets.   Moreover, he had never been threatened with any claim for the difference between the $50,000 policy limit and the jury verdict of $185,000.   As a consequence, Rivera–Arroyo had not been harmed nor was his estate put in jeopardy.   Even under plaintiff's approach to determining when harm should be measured, the decision here would not require a different result from that rendered by the trial judge.

With respect to plaintiff's claim that we should adopt the “judgment rule” ¹ regarding an insured's remedy where an insurer breaches its good faith duty to resolve a claim against an insured resulting in an excess verdict, this argument was not raised before the trial court, and we decline to consider it for the first time on appeal.   See Nieder v. Royal Indem.   Ins. Co., 62 N.J. 229, 234 (1973);  Tractenberg v. Twp. of West Orange, 416 N.J.Super. 354, 377–78 (App.Div.2010).   Moreover, we deem it inappropriate to consider this issue where plaintiff did not provide the trial court with the factual predicate that would support an argument that the estate of Rivera–Arroyo was in any way damaged as a result of the judgment entered in the underlying motor vehicle case.²

Affirmed.

FOOTNOTES

FN1. See, e.g., Frankenmuth Mut. Ins. Co. v. Kelley, 447 N.W.2d 691, 694–96 (Mich.1989) (explaining the “judgment rule” as adopted in other jurisdictions)..  FN1. See, e.g., Frankenmuth Mut. Ins. Co. v. Kelley, 447 N.W.2d 691, 694–96 (Mich.1989) (explaining the “judgment rule” as adopted in other jurisdictions).

FN2. In support of its motion for summary judgment, Allstate questioned the legality of the assignment to plaintiff from the decedent's mother, who was not in an administrative capacity of her son's assetless estate.   Allstate also argued that plaintiff would still need to establish that the refusal to settle by not offering the policy limit constituted bad faith.   We find no need to address these issues because we agree with the trial judge's determination that the assignment, even assuming its validity, was valueless because Rivera–Arroyo suffered no pecuniary loss nor had he been threatened with such loss.   Thus, there is no basis for plaintiff to pursue a judgment against Allstate..  FN2. In support of its motion for summary judgment, Allstate questioned the legality of the assignment to plaintiff from the decedent's mother, who was not in an administrative capacity of her son's assetless estate.   Allstate also argued that plaintiff would still need to establish that the refusal to settle by not offering the policy limit constituted bad faith.   We find no need to address these issues because we agree with the trial judge's determination that the assignment, even assuming its validity, was valueless because Rivera–Arroyo suffered no pecuniary loss nor had he been threatened with such loss.   Thus, there is no basis for plaintiff to pursue a judgment against Allstate.

PER CURIAM