2006 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-27-2006

Knoepfler v. Guardian Life Ins Co

Precedential or Non-Precedential: Precedential

Docket No. 05-1186

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"Knoepfler v. Guardian Life Ins Co" (2006). 2006 Decisions. Paper 1496.

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1

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 05-1186

 

JERROLD B. KNOEPFLER,

Appellant

v.

GUARDIAN LIFE INSURANCE COMPANY OF AMERICA;

BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA,

a subsidiary of the Guardian Life Insurance Company of

America

 

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil No. 01-cv-05186)

District Judge: Hon. William H. Walls

 

Argued October 18, 2005

BEFORE: SCIRICA, Chief Judge, VAN ANTWERPEN and 

 COWEN, Circuit Judges

(Filed : February 27, 2006)

Robert E. Margulies, Esq. (Argued)

Margulies, Wind & Harrington

15 Exchange Place

Suite 510

Jersey City, NJ 07302

Counsel for Appellant
2

David R. Kott, Esq.

Robert P. Lesko, Esq. (Argued)

McCarter & English

100 Mulberry Street

Four Gateway Center

Newark, NJ 07102-0652

Counsel for Appellees

 

OPINION

 

COWEN, Circuit Judge

Jerrold Knoepfler, the insured, appeals the order of the

district court granting summary judgment in favor of defendantappellees Guardian Life Insurance Company of America and

Berkshire Life Insurance Company of America (collectively

“Guardian”) on his claims for benefits under two policies of

disability insurance. The district court found that the claims

were time-barred based upon a policy provision which requires

actions to be brought no more than three years after written proof

must be furnished. This appeal calls upon us to construe the

policy language which fixes the time for furnishing written

proof. The policies provide that the insured must furnish proof

of loss within ninety days after “the end of the period for which

[the insurer is] liable.” Knoepfler argues that this language

requires an insured with an ongoing disability to furnish written

proof after the end of the entire period of disability, while

Guardian contends that the insured is required to submit proofs

of loss after the end of each month of disability. Because we

predict that the New Jersey Supreme Court would construe the

policy language to require proof of loss after the end of the entire

period of disability, we will reverse.

I.

On April 4, 1990, Jerrold Knoepfler purchased two

policies of disability insurance (“Policies”) from Guardian. 
1

 The definitions of the terms “total disability” and “residual

disability” are not relevant to this appeal, and we make no finding

as to whether Knoepfler’s alleged illness qualifies as either a “total

disability” or a “residual disability.”

2

 See supra note 1.

3

Knoepfler claims entitlement to disability benefits under the

Policies based upon an illness that began in November or

December of 1992 and continues to the present.

In September 1995, Knoepfler furnished written notice of

claim to Guardian. In October 1995, Knoepfler furnished written

proof of loss to Guardian. Thereafter, Guardian conducted an

investigation of the claim. In a letter dated March 5, 1997,

Guardian unequivocally denied coverage.

The Policies under which Knoepfler claims entitlement to

benefits are: (1) a Professional Disability Income Policy (Policy

No. G-709770) (“Personal Liability Policy”), which provides for

payment of benefits in the event of total and/or residual disability

as defined therein;1

 and (2) an Overhead Expense Disability

Income Policy (Policy No. G-709771) (“Overhead Expense

Policy”) (collectively the “Policies”), which provides for

payment of benefits in the event of total disability as defined

therein.2

The Policies each contain a “Legal actions” provision and

a “Time for filing proof of loss” provision (“Proof of loss”

provision). The Legal actions provisions in the Policies read as

follows:

No one can bring an action at law or in equity

under this policy until 60 days after written proof

has been furnished as required by this policy. In no

case can an action be brought against Guardian

more than three years after written proof must be

furnished.

(App. at 97a, 129a.) The Proof of loss provision in the Personal
3

 The Overhead Expense Policy refers to the “period of

disability for which we are liable,” whereas the Personal Liability

Policy omits the word “of disability,” providing only the “period

for which we are liable.” For ease of reference, we will singularly

refer to the phrase “period for which we are liable.” 

4

Liability Policy reads as follows:

 We are liable for benefits at the end of each month

while you are disabled beyond the elimination

period until the benefit period ends or, if earlier,

the date you recover. 

You must give us proof of loss at our home office or at

any agency office:

• for loss from disability within 90

days after the end of the period for

which we are liable; and

• for any other loss within 90 days after the

date of loss.

If you cannot reasonably give us proof within such

time, we will not deny or reduce claim if you give

us proof as soon as possible. But we will not pay

benefits in any case if proof is delayed for more

than a year, unless you have lacked legal capacity. 

(App. at 97a.) The Proof of loss provision in the Overhead

Expense Policy reads as follows: 

We are liable for benefits at the end of each month

while you are disabled beyond the elimination

period until the aggregate benefit is reached or, if

earlier, the date you recover. 

You must give us proof of loss at our home office

or at any agency office within 90 days after the end

of the period of disability for which we are liable.3
5

If you cannot reasonably give us proof within such

time, we will not deny or reduce claim if you give

us proof as soon as possible. But we will not pay

benefits in any case if proof is delayed for more

than one year, unless you have lacked legal

capacity.

(App. at 129a.)

The Legal actions and Proof of loss provisions are

included in the Policies by statutory mandate. N.J. Stat. Ann. §

17B:26-3. The wording of the Legal actions provisions in the

Policies mirrors that of the corresponding statutory provision. 

N.J. Stat. Ann. § 17B:26-14. The wording of the Proof of loss

provisions in the Policies, however, does not mirror the wording

of the statutory proof of loss provision, reflecting modifications

that Guardian made to the statutory provision, the latter of which

reads as follows:

Proofs of loss: Written proof of loss must be

furnished to the insurer at its said office in case of

claim for loss for which this policy provides any

periodic payment contingent upon continuing loss

within 90 days after the termination of the period

for which the insurer is liable and in case of claim

for any other loss within 90 days after the date of

such loss. Failure to furnish such proof within the

time required shall not invalidate nor reduce any

claim if it was not reasonably possible to give

proof within such time, provided such proof is

furnished as soon as reasonably possible and in no

event, except in the absence of legal capacity, later

than 1 year from the time proof is otherwise

required.

N.J. Stat. Ann. § 17B:26-10. The Commissioner of Insurance

approved the modifications which Guardian made to the

statutory provision. 

II.
4

 According to defendant-appellees, Berkshire Life

Insurance Company of America did not issue either of the Policies

in controversy and did not become successor-in-interest to

Guardian Life Insurance Company of America’s policies and

obligations when it merged with Guardian in 2001.

6

On October 10, 2001, Knoepfler filed an action against

Guardian4

 in state court in New Jersey, seeking recovery of

disability benefits under the Policies. Guardian removed the

action to the United States District Court for the District of New

Jersey on the basis of diversity of citizenship.

On March 25, 2004, Guardian moved for summary

judgment, arguing that the action was barred by the three-year

period of limitations set forth in the Legal actions provision of

the Policies. Guardian contended that the phrase “period for

which we are liable” in the Proof of loss provision refers to a

monthly period, such that proof of loss is required to be

furnished within ninety days after the end of each month of

disability for which Guardian is liable. Applying this

construction of the policy language, Guardian claimed that

Knoepfler was required to furnish proof of loss within ninety

days after the end of the first month of his alleged disability, i.e.,

by the end of March 1993, or, at the latest, within the one-year

grace period thereafter. Guardian argued that the three-year

period of limitations expired by the end of March 1997, and,

thus, this action was not timely filed.

Knoepfler opposed the motion, contending that proof of

loss is not required to be furnished until after the end of the entire

period of continuous disability for which Guardian is liable. 

Since his alleged disability is ongoing, Knoepfler argued that the

three-year period of limitations has not started to run.

Citing to the New Jersey appellate case of Mosior v.

Insurance Company of America, 473 A.2d 86 (N.J. Super. Ct.

App. Div. 1984), the District Court granted the motion for

summary judgment in Guardian’s favor, holding that the action

was time-barred as a result of the period of limitations. The

District Court found that Mosior had “interpreted a similar policy
7

provision to preclude a suit filed more than three years after the

90-day proof of loss deadline had passed, despite the plaintiff’s

alleged ongoing disability.” (Order and Opinion at 7.) However,

the District Court also noted that “the Policies are ambiguous as

to the precise time in which Plaintiff was required to file his

proof of loss. . . .” (Id. at 8.) Nevertheless, citing to Mosior and

the public policy considerations underlying periods of

limitations, the District Court concluded that “it was not

reasonable for Plaintiff to believe that his right to file suit under

the Policies would survive four years after the final denial of his

claim.” (Id.)

III. 

Knoepfler’s appeal challenges the grant of summary

judgment on two principal grounds: (1) Mosior, the New Jersey

appellate case upon which the District Court relied, never

reached the issue posed for adjudication in this case; and (2) the

majority of courts, including this Court in Hofkin v. Provident

Life & Accident Insurance Co., 81 F.3d 365 (3d Cir. 1996), have

interpreted the language “period for which we are liable” as

requiring proof of loss to be furnished after the end of the entire

period of continuous disability, and there is no reason to

conclude that the New Jersey Supreme Court would depart from

the majority view.

A.

Knoepfler claims that the Mosior court did not construe

the policy language at issue in this case. In Mosior, an insured

brought an action against the insurer to recover benefits for

permanent disability under a group accident insurance policy. 

473 A.2d at 87. The insurer in Mosior argued that the insured

had failed to bring the action within the three-year period of

limitations specified in the policy. Id. As in this case, the period

of limitations provision in Mosior barred any action brought

more than three years after the time written proof of loss was

required. Id. at 88. The policy in Mosior contained the

following proof of loss provision:

Proofs of Loss: Written proof of loss must be
8

furnished to the Company at its said office in case

of claim for loss for which this policy provides any

periodic payment contingent upon continuing loss

within ninety days after the termination of the

period for which the Company is liable and in case

of claim for any other loss within ninety days after

the date of such loss. Failure to furnish such proof

within the time required shall not invalidate nor

reduce any claim if it was not reasonably possible

to give proof within such time, provided such proof

is furnished as soon as reasonably possible. 

Id. (emphasis in original). The Law Division agreed with the

insurer and granted summary judgment in its favor. Id. at 87. 

On appeal, the New Jersey appellate court affirmed. Id. at

90. In determining whether the insured had commenced suit

within the three-year period of limitations, the court stated that

the “date of loss” was the critical date. Id. at 88. The court

found that the date of permanent total disability was the date of

the insured’s loss, and thus that the insured was required to

furnish proof of loss within ninety days of the date of his

permanent total disability. Id. Since the insured had not

commenced suit within three years thereafter, the Mosior court

held that the action was time-barred. Id.

Based upon a close reading of Mosior, we conclude that it

has no application to the facts of this case. At issue in Mosior

was the second clause of the proof of loss provision, which

requires proof to be furnished “for any other loss within ninety

days after the date of such loss.” In determining when proof of

loss was due, the Mosior court focused upon “the date of loss,”

which language is contained only within the second clause of the

proof of loss provision. The only portion of the proof of loss

provision that is italicized in Mosior is the second clause.

Significantly, the Mosior court did not analyze the first

clause of the proof of loss provision which contains the language

at the heart of this dispute: “in case of claim for loss for which

this policy provides any periodic payment contingent upon

continuing loss within ninety days after the termination of the
9

period for which the Company is liable.” 473 A.2d at 88. There

was no discussion in Mosior regarding the meaning of the phrase

“period for which [the insurer is] liable.” Presumably, the

Mosior court did not have any need to construe the first clause of

the proof of loss provision because a permanent disability is a

forgone loss, not “contingent” upon continuing loss.

Guardian makes the flawed argument that the italics in

Mosior emphasizing the language “within ninety days after the

date of such loss” may not have been supplied by the court. 

Guardian surmises that the italics appeared in the underlying

insurance policy. However, the Mosior court stated that the

policy provisions complied with the relevant statutory

provisions, which do not contain any italics. Id. at 88. 

Moreover, even if the italics had not been supplied by the court,

the unmistakable focus of the Mosior court’s discussion was on

the “date of loss,” not the language at issue in this case. 

Guardian also contends that Mosior is authority for the

proposition that Knoepfler should not be allowed to “s[i]t on his

rights for over four years after Guardian unconditionally denied

his claims.” (Appellee’s Brief at 24.) The District Court agreed,

stating:

In accordance with the New Jersey Appellate

Division’s Mosior decision, this Court finds that

the Policies’ period of limitations began to run

upon the “cessation of any basis for continued

reliance” by Plaintiff on the Defendants. Plaintiff’s

claims were unconditionally denied on March 5,

1997. It was not reasonable for Plaintiff to rely on

Defendants’ conduct past this point.

(Order and Opinion at 8-9.) 

Once again, we cannot accept Guardian’s interpretation of

Mosior as applied to the facts of this case. In Mosior, the insured

claimed that the insurer was equitably estopped from raising the

period of limitations defense because the insurer never informed

him of the relevant policy coverage. 473 A.2d at 89. The

Mosior court refused to apply the doctrine of equitable estoppel
5

 Neither party has raised the doctrine of laches, and thus,

we do not consider whether it applies under the facts of this case.

10

in the insured’s favor because the record showed that after the

insured obtained knowledge of the policy change, there were still

twenty-two months remaining under the applicable limitations

period. Id. at 90. The district court explained that the doctrine of

equitable estoppel does not apply where “after the cessation of

any basis for continued reliance by a plaintiff on the conduct of a

defendant, there remains a reasonable time under the applicable

limitations period to commence a cause of action.” Id. (citing

Ochs v. Federal Ins. Co., 447 A.2d 163, 168 (N.J. 1982)). 

In this case, Knoepfler’s argument is that the period of

limitations has not begun to run because the time for furnishing

proof of loss has not started. Knoepfler has not argued that

Guardian should be equitably estopped from raising the period of

limitations defense at all. Thus, we need not concern ourselves

with the various permutations of the doctrine of equitable

estoppel, including the circumstances under which application of

the doctrine is inappropriate, such as unreasonable delay on the

part of the insured. Under the terms of the Policies, the only

event which triggers the running of the period of limitations is

the deadline for furnishing written proof of loss. Knoepfler’s

decision to wait four years after Guardian’s unconditional denial

of coverage to commence this action has no bearing whatsoever

on the issue of whether the period of limitations has run or

started to run.5

 Guardian’s reliance on the Mosior case is

misplaced. In summary, we conclude that Mosior does not

answer the question posed for adjudication in this case.

B.

Having concluded that the issue posed for adjudication in

this case was not addressed by the court in Mosior, or any other

New Jersey state court, we must predict how the New Jersey

Supreme Court would interpret the language “period for which

we are liable.” Knoepfler contends that there is no reason to

conclude that the New Jersey Supreme Court would depart from

the majority view which construes the language “period for
6

 See, e.g., Hofkin, 81 F.3d at 374; Clark v. Massachusetts

Mut. Life Ins. Co., 749 F.2d 504, 507 (8th Cir. 1984); Furleigh v.

Allied Group Inc., 281 F. Supp. 2d 952, 971-72 (N.D. Iowa 2003);

Oglesby v. Penn Mut. Life Ins. Co., 877 F. Supp. 872, 886-87 (D.

Del. 1994); Liberto v. Mutual Benefit Health & Accident Ass’n,

323 F. Supp. 1274, 1276 (W.D. Pa. 1971); Laidlaw v. Commercial

Ins. Co. of Newark, 255 N.W.2d 807, 811 (Minn. 1977); Panepinto

v. New York Life Ins. Co., 688 N.E.2d 241, 244 (N.Y. 1997); Wall

v. Pennsylvania Life Ins. Co., 274 N.W.2d 208, 213-14 (N.D.

1979). 

11

which we are liable” as requiring proof of loss to be furnished

after the end of the entire length of an ongoing period of

disability.6

 Knoepfler emphasizes that in Hofkin, we construed

nearly identical policy language required by a Pennsylvania

statute and predicted that the Pennsylvania Supreme Court would

adopt the majority approach. Knoepfler urges us to apply our

analysis in Hofkin to the facts of this case.

In Hofkin, the insured brought an action against the

insurer, Provident Life & Accident Insurance Company

(“Provident”), for the recovery of total or residual disability

benefits more than six years after the beginning of the relevant

period of disability. 81 F.3d at 368. Provident argued that the

action was time-barred by the legal actions clause contained in

the insurance policy. Id. The legal actions clause, like the one in

the instant case, barred actions brought three years after the time

written proof of loss was required to be furnished. Id. at 370. 

The proof of loss provision in Hofkin, which was required by a

Pennsylvania statute, read as follows:

Proofs of Loss: Written proof of loss must be

furnished to the Company at its said office in case

of claim for loss for which this policy provides any

periodic payment contingent upon continuing loss

within ninety days after the termination of the

period for which the Company is liable and in case

of claim for any other loss within ninety days after

the date of such loss. Failure to furnish such proof

within the time required shall not invalidate nor

reduce any claim if it was not reasonably possible
12

to give proof within such time, provided such proof

is furnished as soon as reasonably possible and in

no event, except the absence of legal capacity, later

than one year from the time proof is otherwise

required. 

Id. (emphasis added).

 

Like Guardian in this case, Provident argued that the

above-italicized portion of the proof of loss provision required

proof to be furnished within ninety days after the end of each

monthly period for which Provident is liable. Id. at 367, 371-72. 

Relying upon the term “periodic payment” in the proof of loss

provision, as well as the language “periodic payment will be paid

monthly” in a separate section of the policy, Provident argued

that the “period for which the Company is liable” is a monthly

period. Id. at 371-72. In response, the insured in Hofkin

contended that, under the plain language of the provision, proof

of loss was not required until the end of the continuous period of

disability. Id. at 367. The district court agreed with Provident,

reasoning that the insured’s construction of the policy language

was inconsistent with the policy considerations underlying suit

limitation provisions of expediting litigation and discouraging

the pursuit of stale claims. Id. at 370.

On appeal, we reversed the order of the district court. Id.

at 375. In reaching our decision, we first observed that under

Pennsylvania law, the district court should not have relied upon

public policy considerations unless it found the relevant policy

language to be ambiguous. Id. at 370-71. Noting that both

parties agreed that the policy language was unambiguous, we

found that the language was amenable to a “plain language”

analysis. Id. at 371. Applying a plain language analysis, we

agreed with the majority view that the language “period for

which the Company is liable” most plausibly refers to the entire

period of continuous disability. Id. at 372-74. We reasoned that

the proof of loss provision did not contain the word “monthly”

before the phrase “period for which the Company is liable,” and

that the insurer’s obligations with respect to payments on a

“periodic” or “monthly” basis did not alter the language which

required proof of loss after the end of the entire period of
13

disability. Id. at 374. Moreover, “we refuse[d] to interpolate by

judicial fiat the term ‘monthly’ before ‘period for which the

Company is liable,’ when the Pennsylvania General Assembly

declined to follow this course.” Id. For these reasons, we

predicted that the highest court in Pennsylvania would adopt the

majority approach and interpret the phrase “period for which the

Company is liable” to mean a continuous period of disability. Id.

at 375. 

Despite the clear relevance of Hofkin and the weight of

the majority view, Guardian contends that the New Jersey

Supreme Court would narrowly construe the phrase “period for

which we are liable” to refer to monthly periods of disability, and

relies upon two primary grounds. First, Guardian argues that

while Hofkin interprets Pennsylvania law, this case involves an

application of New Jersey law. Second, while conceding that the

statutory provisions underlying this case and Hofkin are nearly

identical, Guardian contends that the wording of the policy

language in this case is materially different from the wording of

the policy language in Hofkin. We address both of these

contentions below.

1.

Guardian contends that Hofkin is not relevant authority

because this case requires an application of New Jersey law,

while in Hofkin we were constrained by Pennsylvania law. 

Under Pennsylvania’s rules of statutory construction, a court

cannot resort to public policy considerations unless a

determination has been made that the statutory language is

ambiguous. Hofkin, 81 F.3d at 371. Guardian contends that

New Jersey’s rules of statutory construction permit consideration

of public policy without the need of an ambiguity finding, and

that we should construe the policy language in its favor in order

“to stimulate litigants to pursue a right of action within a

reasonable time so that the opposing party may have a fair

opportunity to defend, and to penalize dilatoriness and serve as a

measure of repose.” Aponte-Correa v. Allstate Ins. Co., 744

A.2d 175, 178 (N.J. 2000) (internal quotation marks and citations

omitted). For the reasons given below, we disagree that

application of New Jersey’s rules of statutory construction would
14

result in a different construction of the policy language.

Under New Jersey law, a court may consider public policy

considerations “if there is ambiguity in the statutory language

that leads to more than one plausible interpretation,” or “if a

plain reading of the statute leads to an absurd result or if the

overall statutory scheme is at odds with the plain language.” 

DiProspero v. Penn, 874 A.2d 1039, 1048-49 (N.J. 2005);

Aponte-Correa, 744 A.2d at 178 (“Where a literal reading will

lead to a result not in accord with the essential purpose and

design of the act, the spirit of the law will control the letter.”). 

Even if the statutory language is unambiguous, public policy

may be considered if a literal interpretation would create a

“manifestly absurd result.” Hubbard v. Reed, 774 A.2d 495, 498

(N.J. 2001). 

Guardian posits that Knoepfler’s interpretation of the

policy language would encourage claims to be brought long after

evidence of a disability has been lost or destroyed and memories

have faded. Illustrating this concern, Guardian argues that

disability claims could be brought decades after the onset of a

disability or even after an insured has already died, making

verification of the claim virtually impossible. For these reasons,

Guardian claims that Knoepfler’s construction of the policy

language would lead to an unreasonable result. 

However, similar arguments have been rejected by other

courts. In Clark v. Massachusetts Mutual Life Insurance, 749

F.2d 504, 507 (8th Cir. 1984), the Court of Appeals for the

Eighth Circuit interpreted an analogous policy provision

mandated by Arkansas law and found that the insurer’s

difficulties associated with investigating stale claims were

contemplated by the policy itself. The Court of Appeals

explained:

Any theory that supplying of proof of loss was a

condition precedent to liability under the policy

tends to be dispelled by the following policy

language: “written proof of loss must be given . . .

within 90 days after . . . the period for which the

company is liable.” . . . Thus, the policy itself
7

 As a practical matter, “‘[a]n insured is not likely to wait

years before filing proof of loss because he will want to receive

benefits as soon as possible.’” Panepinto v. New York Life Ins. Co.,

688 N.E.2d 241, 244 (N.Y. 1997) (quoting Laidlaw v. Commercial

Ins. Co. of Newark, 255 N.W.2d 807, 812 (Minn. 1977)).

15

contemplates that proof of loss may be submitted

after disability terminates; and at least to some

extent [the] difficulty the insurer may have in

investigating a disability that has already ended is

part and parcel of the insurance agreement.

Clark, 749 F.2d at 507 (emphasis in original). Notwithstanding

the alleged difficulties of investigating a terminated disability,

the policy language makes manifest the Legislature’s intent of

requiring proof of loss after the end of the disability. Therefore,

this is not the kind of case where a plain reading of the language

would lead to a “manifestly absurd result.” Hubbard, 774 A.2d

at 498.7

Furthermore, the facts of this case do not present any of

the dramatic problems of proof which concern Guardian. 

Knoepfler furnished proof of loss approximately two years and

ten months after the approximate date of the onset of his ongoing

disability. Although Guardian has made vague assertions

regarding difficulties in investigating his claim, Guardian has not

identified any particular problems of proof and has not shown

any actual prejudice. There is no claim that any evidence was

“buried or destroyed” or that “faded memories” made its

investigation futile.

Finally, we note that applying Guardian’s construction of

the policy language leads to its own share of manifestly absurd

results. For example, under Guardian’s construction of the

language, the insured would be required “to file proof of loss

within 90 days of the end of each monthly period for which the

policies obligate [the insurer] to pay benefits and [,]. . . the

limitations period would run independently for each monthly

installment.” Panepinto v. New York Life Ins. Co., 688 N.E.2d

241, 243 (N.Y. 1997) (emphasis in original). It is difficult to
16

believe that the New Jersey Legislature would have intended that

independent periods of limitations would run concurrently for the

same disability, unless same was stated more plainly in the

statutory provisions.

Based upon the foregoing, we conclude that a plain

interpretation of the policy language would not lead to an absurd

result, but one that is consistent with the approach taken by the

vast majority of courts which have construed the policy

language. Thus, there is no reason to believe that the New Jersey

Supreme Court would depart from the majority view.

2.

Guardian also argues that the Policies in this case contain

a temporal limitation which distinguishes this case from Hofkin

and the other cases adopting the majority view. Guardian

contends that it modified the statutory proof of loss provision by

adding a sentence that refers to “liab[ility] for benefits at the end

of each month,” whereas the proof of loss provision in Hofkin

contained no such reference. The language which Guardian

added to the Proof of loss provision in the Personal Liability

Policy is shown in italics below:

We are liable for benefits at the end of each month

while you are disabled beyond the elimination

period until the benefit period ends or, if earlier,

the date you recover.

You must give us proof of loss at our home office or at

any agency office:

• for loss from disability within 90

days after the end of the period for

which we are liable; and

• for any other loss within 90 days after the

date of loss.

(App. at 97a.) (emphasis added). The additional language in the

Overhead Expense Policy similarly reads:
17

We are liable for benefits at the end of each month

while you are disabled beyond the elimination

period until the aggregate benefit is reached or, if

earlier, the date you recover. 

You must give us proof of loss at our home office

or at any agency office within 90 days after the end

of the period of disability for which we are liable.

(App. at 129a.) (emphasis added). Seizing only upon the first

part of each of the italicized sentences, Guardian argues that the

length of the “period for which [the insurer is] liable” is defined

by way of reference in the preceding sentence to “each month.” 

Guardian contends that this language limits the “period for which

[the insurer is] liable” to a monthly period. Guardian emphasizes

that this modification to the statutory language was approved by

the Commissioner of Insurance.

However, Guardian’s construction of the policy language

ignores the remainder of these sentences which reveals the full

extent and entire period of Guardian’s liability. Under the

Personal Liability Policy, liability continues “until the benefit

period ends or, if earlier, the date you recover.” (App. at 97a.) 

Under the Overhead Expense Policy, liability extends “until the

aggregate benefit is reached or, if earlier, the date you recover.” 

(App. at 129a.)

Guardian is essentially arguing that because the Policies

provide that benefits accrue “each month,” we should construe

the language “period for which [the insurer is] liable” as a

monthly period. However, we rejected the same argument in

Hofkin. 81 F.3d at 374. In Hofkin, we explained that “the policy

language ‘authorizing monthly benefits does not alter the specific

wording of [the policy] that proof of loss must be filed only after

the insurer’s liability terminates.’” Id. (quoting Wall v.

Pennsylvania Life Ins. Co., 274 N.W.2d 208, 214 (N.D. 1979). 

We criticized the insurer’s attempt to “impart[] questionable

significance to various discrete references in the statute.” 81 F.3d

at 374.

Guardian’s construction of the policy language imparts
8

 At a minimum, Guardian’s modification creates an

ambiguity which must be construed against the insurer. Hofkin, 81

F.3d at 369 (noting under an analogous Pennsylvania statute that

“if the insurer chose to modify the required language, any

modifications that are ambiguous should be construed in the

insured’s favor.”); Gibson v. Callaghan, 730 A.2d 1278, 1282 (N.J.

1999) (stating generally that “ambiguities in an insurance policy

are to be interpreted in favor of the insured . . .”).

18

questionable significance to the words “each month” even

though they are located forty-five words away from, and in a

different sentence than, the phrase “period for which we are

liable.” (A.R. at 129a.) (“We are liable for benefits at the end of

each month while you are disabled beyond the elimination period

until the aggregate benefit is reached or, if earlier, the date you

recover. You must give us proof of loss at our home office or at

any agency office within 90 days after the end of the period of

disability for which we are liable.”) (emphasis added). As in

Hofkin, we decline to adopt such a strained reading of the policy

language.

Furthermore, even assuming the language “each month”

could be read as adding a temporal qualification to the “period

for which we are liable,” that modification cannot trump the

rights, duties, and obligations specified in the statute. See N.J.

Stat. Ann. § 17B:26-33 (“[w]hen any provision in a policy

subject to this chapter is in conflict with any provision of this

chapter, the rights, duties and obligations of the insurer, [and] the

insured . . . shall be governed by the provisions of this chapter.”). 

As construed by the majority of courts, the statutorily-mandated

provisions in the Policies impose an obligation on the insured to

furnish proof of loss within ninety days following the termination

of the entire period of the insurer’s liability, and the statute gives

the insured the right to bring an action to recover disability

benefits any time within three years thereafter. Guardian’s

modification to the statutory language cannot add to the insured’s

obligations or abridge his rights.8

As in Hofkin, we find that in order to adopt the insurer’s

construction of the policy language, we would have to judicially
9

 Additionally, “read[ing] the statute in the way that is most

consistent with the overall legislative intent,” McCann v. Clerk of

City of Jersey City, 771 A.2d 1123, 1128 (N.J. 2001) (internal

citations and quotation marks omitted), does not support

Guardian’s construction of the statutory provisions. Guardian’s

construction would not be consistent with the legislative intent of

making the insurance contract more readable and understandable.

See Daly v. Paul Revere Variable Annuity Ins. Co., 489 A.2d 1279,

1282 (N.J. Super. Ct. Law. Div. 1984) (stating that Title 17B

represent the Legislature’s desire to enact consumer oriented

legislation aimed at making the insurance contract more readable

and understandable to the purchaser).

19

interpolate the word “monthly” before the language “the period

for which [the insurer is] liable.” Hofkin, 81 F.3d at 374. Under

New Jersey law, however, “[w]e cannot write in an additional

qualification which the Legislature pointedly omitted in drafting

its own enactment.” DiProspero, 874 A.2d at 492 (internal

citation and quotation marks omitted). Because the word

“monthly” does not appear before the phrase “period for which

[the insurer is] liable,” we cannot adopt Guardian’s construction

of the policy language.9

 For all of the foregoing reasons, we reject Guardian’s

construction of the policy language as requiring proof of loss

after the end of each monthly period of disability. Instead, as in

Hofkin, we adopt the majority’s construction of the policy

language as requiring proof of loss after the end of the entire

period of continuous disability for which the insurer is liable.

IV.

Based upon the foregoing, we conclude that there is no

reason to believe that the Supreme Court of New Jersey would

depart from the majority view which construes the language “the

end of the period for which [the insurer is] liable” to mean the

end of the entire period of continuous disability for which the

insurer is liable. Accordingly, we conclude that the District

Court erred in granting summary judgment in favor of Guardian. 

We will therefore reverse the order of the district court granting
20

summary judgment and remand for further proceedings

consistent with this opinion.