MEITAL RAVIV, Plaintiff–Respondent, v. FARMER'S INSURANCE GROUP,1 Defendant–Appellant, GEICO, Defendant–Respondent.
The question posed by this appeal is whether the statute of limitations applicable to claims for personal injury protection (PIP) benefits expires two years after the date of the accident even where the claimant was unaware of the identity of the insurance carrier. We answer the question in the negative in this unusual case, concluding that plaintiff Meital Raviv is entitled to benefits payable by defendant 21st Century, improperly designated as Farmers Insurance Group. We affirm the May 11, 2012 judgment compelling 21st Century to extend PIP coverage.
We summarize the relevant facts. On December 1, 2009, Raviv was injured while driving a car, owned by a friend and insured by GEICO. A few days later, she submitted an affidavit of no insurance along with a claim for benefits to GEICO, listing her address as 10 Hilliard Avenue, Edgewater. The affidavit stated that she lived at that address with her husband Oswaldo Novo.
Born in Israel in 1977, Raviv relocated to the United States in 2004 or 2005, and has some language difficulties. Counsel nonetheless agreed before a 2012 examination under oath (EUO) that no Hebrew interpreter was required. She lived at the Hilliard Avenue address for approximately four or five years.
In March 2010, GEICO conducted the first EUO of Raviv. She testified that she first lived at that address with her sister Shlomit Raviv (Shlomit) who moved out when Raviv got married. She thought it was probable that her sister's vehicle was still registered there.
Raviv then also stated that her husband did not want her to provide information regarding his car insurance. It was later determined that Novo registered his car in Texas where he had an apartment, and he elected, as permitted by Texas law, not to provide insurance for his wife. He and Shlomit were both flight attendants, and Texas was his home base and his place of residence after the parties separated sometime in 2008.
At a March 2012 EUO conducted by 21st Century, Raviv noted that although Novo was on the lease in 2007 and 2008, she could not recall if he was on the lease in 2009. Raviv also clarified that Shlomit lived with her at the Hilliard Avenue apartment, moving out briefly around the time of Raviv's marriage in late 2007. Her recollection was that in 2009 only she and her sister paid for household expenses such as utility bills.
While the issue of which carrier was responsible for PIP benefits was unresolved, GEICO continued to pay Raviv's claims. When it was discovered that Shlomit was covered through 21st Century, and that she had resumed living at the Hilliard Avenue address after Raviv and her husband separated, 21st Century was informed of that fact. The record is unclear as to exactly who notified 21st Century. On November 16, 2011, less than two years after the accident date, Raviv submitted a claim to 21st Century, her sister's insurance company. On November 18, plaintiff provided to 21st Century proof of residency in the form of her driver's license, a letter from her college, and a copy of her ten-year lease. On November 23, 21st Century requested the completion of an affidavit of no other insurance, which was returned to 21st Century. GEICO made their final payment for Raviv's ongoing treatment on December 1, 2010.
21st Century issued a Reservation of Rights letter on December 12, 2011, the purpose of which was to “permit an impartial and full investigation of all matters relating to this claim and the liability, if any, to the 21st Century Insurance Company without incurring any admission of liability.” A three-way telephone conversation including plaintiff, 21st Century, and GEICO was prompted by 21st Century's request for an official disclaimer of coverage. A letter dated December 15, 2011, states that “this loss was reported in an untimely manner” and that plaintiff “should continue to submit her medical bills under her existing claim with G[EICO].” On January 5, 2012, plaintiff's counsel sent 21st Century information regarding plaintiff's husband's insurance. Thereafter, on January 13, GEICO issued a formal coverage denial letter which plaintiff faxed to 21st Century.
On February 22, 21st Century notified plaintiff that “the statute of limitation in regards to personal injury protection coverage for this loss has tolled as of 12/01/2011. Please forward a copy of the summons and complaint which should have been filed to preserve any potential expiration of the statute of limitation.” 21st Century characterized the lack of earlier notification as a “slight oversight” on the part of its counsel. GEICO provided a copy of its PIP file to 21st Century in July 2012.
The judge noted in his findings that GEICO was not demanding reimbursement of its PIP payments. He concluded that 21st Century “lull[ed] [Raviv into believing] that coverage would be afforded” by virtue of its negotiations with Raviv's counsel, and demands that various forms be completed until after the statute date had run. For this reason, he found that although he would not “go as far as to say they acted in bad faith,” that in the balance the equities compelled the tolling of the statute. The judge ordered 21st Century to extend coverage to Raviv and ordered GEICO to pay for treatment provided prior to January 13, 2012.
On appeal, 21st Century raises the following issues:
The Lower Court's Determination that the Statute of Limitation Did Not Apply was Incorrect and/or It's Application of Said Statute was Improper, thereby Reaping Sever[e] Prejudice on Appellant, 21st [Century]
Genuine Issues of Material Fact Remain Unresolved and, therefore, Order to Show Cause was not an Appropriate Mechanism of Relief
The Trial Court Failed to Take Into Account Plaintiff's Failure to Give Timely Notice of the Accident and Lack of Compliance with N.J.S.A. 39:6A–5(a), thereby Committing Plain Error Whose Effect Led to Unjust Result
GEICO supports Raviv's opposition to the appeal, and also argues that even if we were to find that the statute of limitations barred an order compelling 21st Century to pay PIP benefits, that GEICO was not required to pay after January 13, 2012, and that this aspect of the judge's order should be enforced.
Where multiple potential insurers may be liable, the primary insurer is identified pursuant to N.J.S.A. 39:6A–4.2. The statute states:
Except as provided in subsection d. of section 13 of P.L. 1983, c. 362 (C. 39:6A–4.3), the personal injury protection coverage of the named insured shall be the primary coverage for the named insured and any resident relative in the named insured's household who is not a named insured under an automobile insurance policy of his own. No person shall recover personal injury protection benefits under more than one automobile insurance policy for injuries sustained in any one accident.
At the time in question, Raviv no longer lived with her husband, whose policy did not provide for coverage for his wife in any event. Raviv was the “resident relative in [Shlomit's] household who [was] not a named insured under an automobile insurance policy of [her] own.” Ibid. Additionally, there is a two-year statute of limitations on an action for PIP benefits from the date of the accident or two years after the last payment of benefits. N.J.S.A. 39:6A–13.1(a).
“A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.” Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). Findings of fact, however, are reviewed deferentially. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974).
21st Century contends that the trial court's application of equitable principles to its statute of limitations defense was in error. The rationale for imposing a time limit is as follows:
[S]tatutes of limitations are not self-executing. Such statutes are based on the goals of achieving security and stability in human affairs and ensuring that cases are not tried on the basis of stale evidence. Because they are based on these specific policies, they must be raised as affirmative defenses, subject to judicial modification in appropriate circumstances. Mechanistic application of such statutes could unnecessarily sacrifice individual justice in particular circumstances.
[Zaccardi v. Becker, 88 N.J. 245, 256 (1982) (citations omitted).]
“[T]he purposes of a statute of limitations are ‘to stimulate litigants to pursue a right of action within a reasonable time so that the opposing party may have a fair opportunity to defend,’ and ‘to penalize dilatoriness and serve as a measure of repose.’ ” Aponte–Correa v. Allstate Ins. Co., 162 N.J. 318, 324 (2000) (quoting Zupo v. CNA Ins. Co., 98 N.J. 30, 32 (1984)).
Insurance companies have been compelled to extend coverage where ongoing investigation may have lulled a claimant into believing that a claim will be paid because it was “properly filed.” Price v. N.J. Mfrs. Ins. Co., 182 N.J. 519, 527 (2005). Where an insurer has not lulled a plaintiff into believing a claim was timely, no coverage will be extended. See Cruz–Diaz v. Hendricks, 409 N.J.Super. 268, 278–79 (App.Div.), certif. denied, 200 N.J. 548 (2009). In Cruz–Diaz, the insurer did not request additional documents or otherwise mislead the plaintiff who himself requested information about treatment dates two years after the insurer denied his claim. Id. at 279. The decision as to whether enforcement of a statute of limitations is equitable requires a weighing of the insured's conduct and the insurer's conduct. See Price, supra, 182 N.J. at 527; Cruz–Diaz, supra, 409 N.J.Super. at 279. Additionally, a court might consider any effect the delay may have on the insurer's ability to defend against a claim. See Parisi v. Aetna Cas. & Sur. Co., 296 N.J.Super. 179, 186 (App.Div.1997).
In this case, Raviv promptly pursued her PIP claim when she believed GEICO was the responsible insurer. Once she learned that 21st Century was responsible, she immediately filed a claim. Clearly, she was not dilatory. At most, GEICO's counsel and Raviv's counsel erred in not sorting out residency sooner.
The question remains whether 21st Century would be prejudiced by being forced to defend against a stale claim because two years have passed since the accident. First, GEICO had the responsibility and opportunity to investigate the claims and medical treatment while the incident was still fresh. 21st Century has received GEICO's file, which presumably contains accident claim and medical information. As a side note, 21st Century has provided no specifics as to how that file is lacking. Second, GEICO has already paid medical bills up until December 1, 2010, is required to pay for any medical expenses up until January 13, 2012, and cannot seek subrogation; therefore, any claims for medical bills will be more recent and 21st Century will have the opportunity to conduct an independent medical examination if it so wishes.
Finally, the remaining issue is whether defendant's behavior contributed to lulling plaintiff into believing that coverage would be provided until the purported statute of limitations had passed. 21st Century, even after the statute of limitations from the date of the accident had passed, required plaintiff to seek a denial of coverage from GEICO and even conducted EUOs after it sent the letter regarding the statute of limitations. Although 21st Century had a right to investigate plaintiff's asserted status as Shlomit's resident relative, such actions after the purported passing of the statute of limitations was somewhat irresponsible. Taken as a whole, plaintiff's relative blamelessness for the delay because of a misunderstanding, the fact that GEICO paid $50,000 towards a claim that 21st Century should have paid, and the fact that 21st Century should not have continued investigating months after it believed the statute of limitations passed, supports the trial judge's finding that the circumstances favored equitable tolling of plaintiff's claim against 21st Century.
Because we find that Raviv was lulled into a false sense of security with regard to 21st Century's willingness to pay her PIP claim, we consider it unnecessary to reach 21st Century's additional arguments on appeal.