LIGUORI v. CERTAIN UNDERWRITERS AT LLOYDS LONDON SUBSCRIBING TO POLICY AJD8955, 1:14-cv-05898

Joseph and Lisa Liguori owned a Seaside Heights home insured under Policy No. AJD8955 (wind covered; flood excluded) for Aug 23, 2012–Aug 23, 2013.
Superstorm Sandy struck Oct 29, 2012; Liguoris gave notice Nov 1, 2012; insurer retained engineer who concluded flooding demolished the house and wind damage was minor.
On Feb 25, 2013, the insurer’s adjuster sent a letter stating wind damages were covered and enclosing an estimate (amounts left blank), but explicitly denying flood-related claims and reserving the right to amend the letter if new information emerged.
Liguoris filed suit for breach of contract and breach of the implied covenant on Aug 21, 2014—about 19 months after the adjuster letter and beyond the policy’s one-year contractual limitations period.
The insurer moved for summary judgment arguing the one-year contractual limitations period was triggered by the Feb 25 letter and thus the suit was time-barred; plaintiffs invoked equitable tolling/estoppel, arguing the letter was ambiguous and did not constitute a formal denial.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the insurer’s Feb 25, 2013 letter was a clear, formal denial that restarted the contractual one-year limitations period	The letter was ambiguous: it said wind damage was covered, left payment figures blank, and reserved the right to amend—so tolling continued	The letter notified plaintiffs of denial as to flood and effectively ended tolling so the one-year contractual limitation expired before suit	Court held the letter was ambiguous as to wind coverage and thus did not constitute an unequivocal denial; equitable tolling continued and summary judgment was denied
Whether plaintiffs needed to show detrimental reliance or affidavits that they were misled by the letter to avoid summary judgment	Not required; the question is one of law—whether the letter, on its face, was unambiguous	Argued plaintiffs offered no affidavits showing they relied to their detriment	Court agreed plaintiffs need not submit affidavits at summary judgment because interpretation of the letter’s language may be a legal question; ambiguity precludes summary judgment

Peloso v. Hartford Ins. Co., 56 N.J. 514 (1970) (tolling insurance contractual limitations from notice until a formal denial)
Azze v. Hanover Ins. Co., 336 N.J. Super. 630 (App. Div. 2001) (denial letter ambiguous where insurer continued negotiations or reserved ability to consider new information)
Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard: nonmoving party must present evidence on elements it must prove)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment requires no genuine dispute of material fact)