Kieffer v. HIGH POINT INS. CO.
25 A.3d 1206
| N.J. Super. Ct. App. Div. | 2011Background
- Plaintiffs AXA, Kieffer, Brown, and Kozusko sue three insurers (High Point, First Trenton, NJM) in consolidated actions over diminution-in-value claims.
- Policies at issue exclude diminution in value and limit liability to repair or actual cash value, with definitions of diminution in value as loss in market or resale value.
- NJM policy covers loss minus deductible, limits liability to actual cash value or cost to repair/replace with like kind, and excludes diminution in value.
- First Trenton policy pays for loss to the insured car, capped at actual cash value or cost to repair/replace, and includes an amendment excluding diminution in value.
- High Point policy provides maximum liability as actual cash value minus deductible, and at insurer’s option, payment for repair/replacement excludes diminution in value.
- Trial court ruled the language is unambiguous, excluded diminution-in-value claims, and denied reconsideration and leave to amend; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are diminution-in-value exclusions enforceable as written? | Kieffer/Brown/Kozusko contend exclusions are ambiguous and should cover diminution in value. | High Point, First Trenton, NJM argue exclusions unambiguously bar diminution-in-value claims. | Exclusions are unambiguous and enforceable. |
| Does reasonable expectations doctrine require coverage for diminution in value? | Policy language should be read to include diminution in value based on reasonable expectations. | No; unambiguous exclusions control, and expectations do not change contract terms. | Not applicable; doctrine rejected. |
| Are diminution-in-value exclusions contrary to public policy under Rudbart analysis? | Exclusions are one-sided and economically coercive; public policy prohibits them. | Public policy does not require collision coverage; exclusions are valid if specific and not contrary to policy. | Exclusions not contrary to public policy. |
| Did the trial court err in denying reconsideration and leave to amend? | Court should permit amendment to include diminution-in-value claims under UM/UIM contexts. | Motion failed to meet reconsideration standards and amendment was untimely. | No reversible error; decisions affirmed. |
Key Cases Cited
- Gibson v. Callaghan, 158 N.J. 662 (1999) (limits courts from rewriting policy terms for insured)
- Longobardi v. Chubb Ins. Co., 121 N.J. 530 (1990) (interpretation of insurance contracts in light of intent)
- Carlton v. Trinity Universal Ins. Co., 32 S.W.3d 454 (Tex.App. 2000) (repair/replace provision caps liability; no value recovery for non-repairable loss)
- Victory Peach Grp., Inc. v. Greater N.Y. Mut. Ins. Co., 310 N.J. Super. 82 (App.Div.1998) (exclusions supported by detailed policy terms)
- Hintz v. Roberts, 98 N.J.L. 768 (E. & A.1923) (earlier diminution-in-value discussion; third-party context)
- Premier XXI Claims Mgmt. v. Rigstad, 381 N.J. Super. 281 (App.Div.2005) (distinguishing third-party tort recovery from first-party contract claims)
- Pickett v. Lloyd's, 131 N.J. 457 (1993) (bad faith insurance claim; fiduciary duty context)
- Homesite Ins. Co. v. Hindman, 413 N.J. Super. 41 (App.Div.2010) (doctrine against reading conflicting provisions in isolation when determining coverage)
- Rudbart v. North Jersey Dist. Water Supply Comm'n, 127 N.J. 344 (1992) (adhesion contracts factors for public policy analysis)
- Muhammad v. Cnty. Bank of Rehoboth Beach, 189 N.J. 1 (2006) ( Rudbart factors; public interest context)
- N.J. Coal. of Health Care Prof'ls, Inc. v. N.J. Dep't of Banking & Ins., Div. of Ins., 323 N.J. Super. 207 (App.Div.1999) (public policy and exclusions validity; specific/clear terms)
- Allstate Ins. Co. v. Malec, 104 N.J. 1 (1986) (principle that specific exclusions align with public policy)
- Doto v. Russo, 140 N.J. 544 (1995) (specific exclusion validity; public policy alignment)