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Green v. Selective Ins. Co. of America6/12/1996
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
Robert Green v. Selective Insurance Company of America (A-74-95)
(NOTE: This is a companion case to Zirger v. General Accident Insurance Company also decided today.)
Argued January 29, 1996 -- Decided June 12, 1996
O'HERN, J., writing for a majority of the Court.
This appeal presents two issues: 1) whether the statute of limitations on a claim for underinsured motorist (UIM) benefits begins to run on the date of an accident or on the breach of the insurance contract; and 2) whether this claimant has forfeited a right to collect UIM benefits by failing to give prompt notice to the insurance company or otherwise having prejudiced the insurance company's subrogation rights.
On October 17, 1985, Robert Green was injured in a three-car automobile accident. The car driven by Johnnie Tingle collided with the car driven by Mary Galex. Those two vehicles then collided with Green's vehicle. The Tingle car had an insurance policy with a $15,000 limit of liability and the Galex car had a $250,000 policy limit. Green had $100,000 of UIM coverage with Selective Risks Insurance Company (Selective).
Selective had early notice of Green's injuries because it had paid him personal injury protection (PIP) benefits under his insurance policy. During the course of his treatment, Green had to sue Selective for the payment of additional PIP benefits. That matter was ultimately settled by the parties.
In June 1987, Green sued Galex and Tingle for the injuries he suffered in the accident. In August 1988, Tingle's insurance carrier paid its $15,000 policy limits into court. Green refused to settle for that amount and decided to proceed with the litigation. Inadvertently, the file was closed without notice to the parties during the pendency of the law suit. On August 26, 1992, the court reopened the case, five years after the original complaint was filed. In the interim, Tingle had died.
Although denying that Galex was responsible for the accident, Galex's insurer, on February 1, 1993, offered Green $2,500 to settle any claims against her. Green was concerned that without Tingle's testimony, he would be unable to prove that Galex was liable for the accident. Therefore, Green contacted Selective, his own insurance company to preserve his UIM benefit rights. Selective's representatives told Green that it considered its file closed because of the passage of time and that Green should exercise his own judgment as to whether or not to accept the offer. Green decided to accept the settlement.
In February 1993, over seven years from the date of the accident, Green sought arbitration of his claim against Selective for UIM benefits. Selective denied any duty to arbitrate, claiming that the statute of limitations barred Green's claim. In March 1993, Green brought a declaratory judgment action to compel Selective to submit to arbitration. Selective moved for summary judgment. The trial court granted the motion and dismissed Green's complaint. The court held that Green's claim was barred by the six-year statute of limitations applicable to contract claims and that the limitations period began to run on the date of the accident.
The Appellate Division affirmed the trial court's dismissal but not on the basis of the statute of limitations. Rather, the court relied on this Court's recent decision in Vassas,
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