Myska v. New Jersey Manufacturers Insurance
114 A.3d 761
| N.J. Super. Ct. App. Div. | 2015Background
- Three insureds (Myska, Wagner against NJM; Todisco against Palisades) sought diminution‑in‑value recovery under their UM/UIM insurance provisions after post‑repair losses from uninsured/underinsured tortfeasors.
- NJM paid repair costs but denied payment "at this time" for diminution claims, citing insufficient proof and regulatory uncertainty; plaintiffs provided Collision Consulting reports but not underlying raw data.
- Todisco sent a February 15, 2013 letter stating he was "making a claim for diminished value damages" but provided no amount or supporting data and did not follow the policy’s proof‑of‑loss procedures.
- Plaintiffs filed a putative class action alleging breach of contract, breach of the covenant of good faith and fair dealing, and violations of the Consumer Fraud Act (CFA).
- The Law Division struck class allegations, dismissed the CFA claims, severed NJM plaintiffs’ breach claims for individual adjudication, and compelled arbitration (and dismissed) Todisco’s complaint.
- On appeal the court affirmed denial of class certification and CFA claims, held the Palisades arbitration clause unenforceable under Atalese but affirmed dismissal of Todisco’s complaint for failure to present a claim/comply with claims procedure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether class certification was properly denied pre‑discovery | Denial was premature; plaintiffs needed discovery to show a common pattern/practice | Class action unsuitable because individualized policy terms, vehicles, proofs, and damages predominate | Denial affirmed: individualized contract terms and claim facts preclude commonality/predominance; claims sizeable enough to permit individual suits |
| Whether CFA applies to insurer’s denial/refusal to pay diminution claims | CFA covers insurer practices and failures to disclose; NJM engaged in unconscionable conduct by denying/obfuscating claims | CFA does not apply to routine coverage/payment disputes; insurance claims adjudication falls under regulatory scheme and is not CFA territory | CFA inapplicable: plaintiffs alleged coverage/payment disputes, not an unlawful sales practice or fraud cognizable under CFA |
| Whether court improperly considered extrinsic documents on dismissal/class issue | Court improperly considered documents beyond complaint and drew inferences for defendants | Documents were referenced in the complaint (policies, letters, reports) and may be considered on Rule 4:6‑2(e) review | No error: court may consider documents integral to the complaint; the correspondence and policies were unambiguous |
| Enforceability of Palisades arbitration clause and effect on Todisco’s claim | Arbitration clause requires dismissal/compulsion to arbitrate; plaintiff should not be excused | Clause is enforceable; Todisco never properly presented a diminution claim so arbitration should proceed | Arbitration clause fails Atalese notice/waiver requirements and is unenforceable; nevertheless Todisco’s complaint was dismissed for failing to submit a cognizable diminution claim or follow claims procedures |
Key Cases Cited
- Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430 (2014) (arbitration/waiver clauses must clearly and unmistakably inform parties they are relinquishing the right to sue in court)
- Green v. Morgan Props., 215 N.J. 481 (2013) (standard for Rule 4:6‑2 motions and liberal pleading review)
- Printing Mart‑Morristown v. Sharp Elecs. Corp., 116 N.J. 739 (1989) (Rule 4:6‑2 test: does a cause of action appear from the facts alleged)
- Riley v. New Rapids Carpet Ctr., 61 N.J. 218 (1972) (class actions should not be prematurely dismissed when complaint shows a possible basis for class relief)
- Lemelledo v. Beneficial Mgmt. Corp., 150 N.J. 255 (1997) (CFA applies broadly to insurance sales practices but has limits regarding claim‑payment disputes)