Opinion
DOCKET NO. A-5358-13T4
05-04-2016
IFA INSURANCE COMPANY, Plaintiff-Appellant, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY and JEFFREY W. FALANA, Defendants-Respondents, and MARIANA OROPEZA-DEFALANA, Defendant.
Robert R. Nicodemo, III, argued the cause for appellant (Law Offices of Nicodemo & Connell, P.C., attorneys; Mr. Nicodemo, on the briefs). Walter F. Kawalec, III, argued the cause for respondent Government Employees Insurance Company (Marshall Dennehey Warner Coleman & Goggin, attorneys; Mr. Kawalec, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Ostrer, Haas and Manahan. On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-1711-13. Robert R. Nicodemo, III, argued the cause for appellant (Law Offices of Nicodemo & Connell, P.C., attorneys; Mr. Nicodemo, on the briefs). Walter F. Kawalec, III, argued the cause for respondent Government Employees Insurance Company (Marshall Dennehey Warner Coleman & Goggin, attorneys; Mr. Kawalec, on the brief). PER CURIAM
This appeal concerns a coverage dispute between two auto insurance carriers. Plaintiff IFA Insurance Company seeks contribution from defendant GEICO toward underinsured motorist (UIM) and personal injury protection (PIP) benefits IFA paid to its insured, defendant Jeffrey Falana. IFA contends that Falana was also insured under a policy that GEICO issued to Mariana Oropeza-DeFalana (Oropeza), Falana's then-estranged wife. IFA appeals from the trial court's orders granting GEICO summary judgment, dismissing IFA's declaratory judgment complaint, and denying IFA's reconsideration motion. We affirm for two reasons. Oropeza removed Falana as a named insured under her policy before Falana's claim arose; and Falana was not entitled to coverage as a spouse who was a resident of Oropeza's household, since he abandoned the marital home before she obtained the GEICO policy.
I.
Falana and Oropeza were married in 1999 and moved into Falana's pre-marital home at 7 Ogden Avenue in Collingswood. Falana testified that by the summer of 2011, he and his wife were experiencing marital difficulties. On July 10, 2011, Falana abandoned Oropeza without prior notice. He quit his job; left the Collingswood home with a couple bags of clothing and a satellite radio; and moved into a motel at the Jersey Shore, where he hoped to find a job and build a new life. Falana testified he had no plans to return to the Ogden Avenue home. He intended to divorce Oropeza. He expected Oropeza would take whatever furnishings from the home she wanted. After he moved, Falana stopped paying the tax, electricity, and other household bills, which continued to be sent to him at the Collingswood address. Although he renewed his annual IFA policy effective July 31, 2011, he did not inform IFA that he had relocated.
Oropeza initially reported Falana as a missing person, but was later informed by police, as a result of a traffic stop, that Falana had relocated and did not want her to know his whereabouts. In response to Falana's abandonment, Oropeza took steps to live independently. Within a couple weeks of his departure, she obtained a driver's license. On July 27, 2011, she signed a lease for a house in Moorestown with an August 1 move-in date. On July 29, she leased a Honda automobile, using the Collingswood address.
The same day, she bought an auto insurance policy from GEICO. The GEICO policy's July 30 declarations page listed Oropeza and Falana as named insureds and listed their address as 7 Ogden Avenue. The sole insured vehicle was Oropeza's Honda. The policy period was July 29, 2011 through January 29, 2012. On July 28 and 29, Oropeza moved her clothing and furnishings from the Collingswood home to her new residence. She began living there the evening of July 31. On August 7, 2011, GEICO issued a new declarations page that identified Oropeza as the only named insured and listed her new address. At the end of September, Oropeza filed suit for divorce.
Only after the appeal was fully briefed, and notwithstanding GEICO's previous denials, GEICO's counsel advised the court that he "recently learned" that the July 30 declarations page existed. We express our displeasure that GEICO did not disclose the document earlier.
Sometime in October, Falana learned that Oropeza had relocated. Because he had not succeeded in landing a new job at the Shore, he decided to return temporarily to the Collingswood home to save the $1200 he was paying monthly for rent. He continued to drive to the Shore to job hunt.
Then, on November 2, 2011, Falana suffered serious injuries when a car struck him as he crossed the street in Collingswood. IFA ultimately paid him $233,495.08 in PIP benefits. IFA also paid Falana $50,000 in UIM benefits, after crediting $50,000 from the tortfeasor against the policy's $100,000 UIM limit.
IFA filed its complaint against GEICO on April 22, 2013, seeking a pro rata share of the benefits it had paid. After a period of discovery in which Falana and Oropeza were deposed, GEICO filed its motion for summary judgment and IFA cross-moved.
IFA also named Falana and Oropeza. IFA later dismissed its suit against Oropeza.
GEICO argued Falana was not a named insured under its policy. The policy defined "named insured" as a person identified on the declarations page, or that person's spouse "if a resident of the same household." GEICO argued that Falana did not meet the first definition, relying on the August declarations page that omitted Falana. GEICO also asserted that Falana was not covered as a spouse because he left the marital home before Oropeza bought the policy.
In response, IFA argued that despite his abandonment of the marital home, Falana remained a resident there. IFA relied on the facts that he continued to receive bills at the Ogden Avenue home, he had not formally changed his address, and he returned to Collingswood in October 2011. Even before GEICO disclosed the July 30 declarations page, IFA maintained that Falana was a named insured until GEICO dropped him in August. IFA relied on a July 29 endorsement naming the Honda Lease Trust as an additional insured, which was addressed to Falana and Oropeza at the Ogden Avenue address.
The court granted GEICO's motion for summary judgment and denied plaintiff's cross-motion. The court found Falana never resided with Oropeza during the policy period, and was never a named insured. The court noted Falana moved out of the Ogden Avenue house before Oropeza bought the policy and never lived with her at her home in Moorestown, which was listed as her address on the August 2011 declarations page. The court concluded that Falana was a named insured "by mistake for a 7 or 8 [day] period," but apparently found the fact that Falana left the marital home before the policy was issued dispositive. The court later denied IFA's motion for reconsideration.
This appeal followed.
II.
The governing standards of review are well-settled. We exercise de novo review of the trial court's grant of summary judgment and its interpretation of an insurance policy. Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016). Summary judgment shall be granted if the record evidence "'show[s] that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law.'" Ibid. (quoting R. 4:46-2). Issues of statutory interpretation are likewise subject to our plenary review. Cashin v. Bello, 223 N.J. 328, 335 (2015). However, we review for an abuse of discretion a trial court's decision on a motion for reconsideration. Cummings v. Bahr, 295 N.J. Super. 374, 389 (App. Div. 1996).
A.
IFA first argues that GEICO was prohibited from removing Falana as a named insured without his consent, relying on Matland v. United Services Auto. Ass'n, 174 N.J. Super. 499 (Law Div. 1980). In Matland, a husband was the sole named insured identified on an automobile policy's declaration page. However, with the wife's knowledge, he added her vehicle to his policy, which then listed her as a designated operator. Id. at 504. The wife was also a named insured under a definition of the term that included a "spouse, if a resident of the same household." Id. at 505. A month after the wife left the marital home, the husband deleted her vehicle from his policy without her knowledge. The insurer also asserted she was no longer a named insured once she moved out of the marital home.
The court held that the cancellation of coverage for the wife's vehicle was void. Id. at 502. The court noted the policy was silent as to whether the husband was authorized to modify coverage as he did. Id. at 507. The court relied on broader public policy principles, emphasizing that the cancellation caused her vehicle to be uninsured in violation of the compulsory insurance law. The court found that the wife expected the coverage and the insurer was estopped from relying on the definition of "named insured" to deprive her of coverage. Id. at 509-10. The court distinguished the case from those "in which the named insured deletes coverage for children operators who are not owners of insured automobiles." Id. at 507. The court reformed the policy to add the wife as an insured as to her vehicle, and declared that the husband "may not delete coverage without her consent." Id. at 510.
We need not decide whether to endorse Matland's broad expression of the right of one spouse to prevent another spouse from deleting coverage. The case is readily distinguishable from our facts. Unlike the wife in Matland, Falana had his own policy, and did not rely on the GEICO policy. Also, he was unaware that he was covered by his spouse's policy, and he was not rendered uninsured by Oropeza's policy change. Indeed, Falana is more like the child operator in Matland's hypothetical, as he did not own an automobile insured by Oropeza's policy, there was no possibility he would operate Oropeza's insured vehicle, and he would not be uninsured because the vehicle he did operate was covered by separate insurance.
IFA also relies on an out-of-state decision, Kent v. Dairyland Mutual Ins. Co., 131 N.W.2d 146 (Neb. 1964). However, Kent does not suggest a different result. In that case, a father and son jointly owned an automobile the son drove; both were named insureds under a policy that authorized the named insured to cancel; and the father paid two-thirds of the premium. The son unilaterally cancelled the policy, without the father's knowledge, and then was involved in a collision. The court held that the son was not the father's implied agent, and lacked authority to act on his behalf. "When property is owned jointly, and so insured, one owner cannot cancel the policy of insurance . . . without the consent of the co-insured." 131 N.W.2d at 154. By contrast, here Falana had no interest in Oropeza's vehicle, nor has IFA cited an express provision in the GEICO policy that limited Oropeza's authority to delete Falana as a named insured. --------
B.
In the alternative, IFA contends Falana was insured under the GEICO policy pursuant to N.J.S.A. 39:6A-2(g), which defines "named insured" as the person "identified as the insured" and that person's "spouse, if the spouse is named as a resident of the same household." The statute provides for continuation of coverage even if the co-resident spouse moves, stating: "[I]f the spouse ceases to be a resident of the household of the named insured, coverage shall be extended to the spouse for the full term of any policy period in effect at the time of the cessation of residency."
While the policy initially "named" Falana as a resident of the same household, he was not in fact a resident of Oropeza's household when the policy issued. He ceased to be a resident of her household on July 10, 2011, before the GEICO policy went into effect. Consequently, extending coverage for the "full term of any policy period in effect at the time of the cessation of residency" provides no coverage at all.
"[W]hether a relative of a named insured is a resident of that insured's household will depend on the facts of each case." Gibson v. Cty. of Essex, 158 N.J. 662, 672 (1999) (internal quotation marks and citations omitted). In particular, where a relative seeks coverage after moving out of the insured's household, the relative's intent matters. Thus in asking whether Falana ceased to be a resident of Oropeza's household, we look to whether he intended to return to her household, or rather intended to separate permanently from her. See id. at 675; see also id. at 672-73 ("insured's belief" also relevant in determining household). A court may also consider "whether the insured and the relative . . . share a 'substantially integrated family relationship.'" Id. at 673 (quoting Mazzilli v. Accident & Cas. Ins. Co., 35 N.J. 1, 19 (1961)).
Applying these principles, Falana was not a "resident of" Oropeza's household when her policy issued on July 29. He had already abandoned the marital home with the intent to divorce Oropeza. She had already found a new residence. The fact that Oropeza remained in the Ogden Avenue home for a few days after obtaining the GEICO policy is immaterial, as Falana vacated the home almost three weeks earlier. Oropeza also testified that she wanted nothing to do with Falana after he left, because of the way he acted.
IFA places undue weight on Falana's remaining legal ties to the real and personal property at Ogden Avenue after he moved to the Shore. He ceased paying any of the costs associated with the house, and stated that he intended to change the address of his driver's license and insurance when they came up for renewal. The fact that bills continued to be sent to Falana at the Ogden Avenue address is thus of no moment. Further, Falana's return to the house in October does not establish him as a resident of Oropeza's household, since by then her "household" was in Moorestown.
In sum, because Falana ceased being a "resident of" Oropeza's household before the GEICO policy issued, he did not meet the definition of a "named insured" under N.J.S.A. 39:6A-2(g). Consequently, there is no basis for coverage for his injuries under the GEICO policy.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION