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Superior Court of New Jersey, Appellate Division
January 8, 2008, Argued; March 7, 2008, Decided
DOCKET NO. A-4293-06T1
[*530] [**161] The opinion of the court was delivered by
The issue presented by this appeal is whether the failure of both the operator and the owner of a motor vehicle to cooperate with the vehicle's insurer, thus preventing the insurer from ascertaining whether the operator was a permissive user, provides sufficient [*531] grounds for the insurer to disclaim coverage. We conclude that such a failure of cooperation may result in "appreciable prejudice" to the insurer and therefore justify a disclaimer of coverage.
Defendant Rutgers Casualty Insurance Company (Rutgers Casualty) issued an automobile liability policy to defendant Edilberto Chilito insuring his pick-up truck. The policy contained a standard "cooperation clause" that required any person seeking coverage to "[c]ooperate with [the insurer] in the investigation, [***2] settlement or defense of any claim or suit."
On the evening of October 18, 2002, defendant Tammy Gonsalves, who was not a named insured under the policy, was operating Chilito's truck in Pleasantville. Gonsalves, who was intoxicated, was involved in two accidents within a period of nine minutes. The first accident did not result in any claim. However, the second accident caused substantial damage to the other car and serious personal injuries to the other driver, Nicole Hager, which resulted in Hager filing an automobile negligence action.
According to the police report, Gonsalves attempted to make a left-hand turn without yielding to Hager's car, which was traveling in the opposite direction, and the vehicles collided. Two witnesses who were driving behind Hager at the time of the accident informed the investigating police officer that Gonsalves "suddenly" crossed into the opposing lane of traffic, causing the impact. The officer issued Gonsalves summonses for driving while under the influence of alcohol, operating a vehicle without a license, driving while her license was suspended, failing to yield at an intersection and reckless driving.
Neither Gonsalves nor Chilito informed Rutgers [***3] Casualty of the accident. Rutgers Casualty became aware of the accident upon receipt of a letter from Hager's counsel more than five weeks after the accident. That same day, a Rutgers Casualty claims adjuster sent a letter to Chilito, by both certified and regular mail, which indicated that his vehicle had been involved in an accident on [*532] October 18, 2002 and reserved Rutgers Casualty's right to disclaim coverage. Chilito did not respond to this letter.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
398 N.J. Super. 529 *; 942 A.2d 160 **; 2008 N.J. Super. LEXIS 52 ***
NICOLE HAGER AND MARK HAGER, PLAINTIFFS, v. TAMMY M. GONSALVES AND EDILBERTO CHILITO, DEFENDANTS. HIGH POINT INSURANCE COMPANY, AS SUBROGEE OF NICOLE AND MARK HAGER, PLAINTIFF-RESPONDENT, v. RUTGERS CASUALTY INSURANCE COMPANY, DEFENDANT-APPELLANT, AND TAMMY M. GONSALVES AND EDILBERTO CHILITO, DEFENDANTS.
Subsequent History: [***1] Approved for Publication March 7, 2008.
Certification denied by High Point Ins. Co. v. Rutgers, 2008 N.J. LEXIS 636 (N.J., May 15, 2008)
Prior History: On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket Nos. L-2802-04 and L-3232-04.
insurer, cooperation, coverage, appreciable, disclaim, investigator, failure to cooperate, insured's breach, permissive user, letters, provide coverage, driving, notice, truck
Evidence, Burdens of Proof, Allocation, Insurance Law, Liability & Performance Standards, Bad Faith & Extracontractual Liability, Payment Delays & Denials, Claims Made Policies, Notice Requirements, Notice Prejudice