Court Opinion

ID: 4645102
Source: CourtListenerOpinion
Date Created: 2020-12-21 15:09:13.869075+00
Date Added: 2024-06-11T08:00:49.963308
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-1266-19T1

SELECTIVE AUTO
INSURANCE COMPANY
OF NEW JERSEY,

          Plaintiff-Respondent,

v.

RAYMOND CASCARINO,

          Defendant-Appellant,

and

DONALD C. TOMASELLO,
and GEICO,

     Defendants.
_________________________

                    Argued December 1, 2020 — Decided December 21, 2020

                    Before Judges Mawla and Natali.

                    On appeal from the Superior Court of New Jersey, Law
                    Division, Cape May County, Docket No. L-0297-18.

                    Eric S. Poe argued the cause for appellant.
            Michael T. McDonnell III, argued the cause for
            respondent (Kutak Rock, LLP, attorneys; Michael T.
            McDonnell III, Lindsay Andreuzzi, and Kimberli
            Gasparon, of counsel and on the brief).

PER CURIAM

      Defendant Raymond Cascarino appeals from an October 24, 2019 order

entering summary judgment in favor of plaintiff Selective Auto Insurance

Company of New Jersey (Selective). We affirm.

                                        I.

      On August 9, 2016, Cascarino was struck while walking and injured by a

vehicle operated by defendant Donald C. Tomasello. At the time of the accident,

Cascarino was insured under a motor vehicle policy by Selective. Tomasello

was insured by a GEICO policy, which had a $100,000 liability coverage limit.

Cascarino's policy provided underinsured motorist (UIM) coverage in the

amount of $250,000 per person subject to certain exclusions.

      On December 14, 2016, Cascarino's counsel sent a demand letter to

GEICO stating:

            I am hereby demanding that you pay your policy limits
            for Bodily Injury Liability Coverage on behalf of your
            insured, driver . . . Tomasello by January 15, 2017[,] in
            exchange for his release for liability. If you fail to do
            so by such date, due to the obvious nature of the injuries
            sustained due to the negligence of your driver, I will

                                                                         A-1266-19T1
                                        2
            seek an offer of judgment as well as a bad faith claim
            on a delay of payment.

                  ....

                   I trust that after review of the enclosed records,
            you will recognize that the value of the subject claim
            far exceeds your client's available policy limits. Be
            advised that, notwithstanding the foregoing, I am
            prepared to recommend settlement for those policy
            limits provided same are tendered by January 15, 2017.
            Following expiration of the addressed time frame, I will
            actively prepare this matter for trial and will not
            thereafter consider settlement within the available
            policy limits.

                   The foregoing offer is conditioned upon your
            submission of satisfactory proof of the limits of your
            client's insurance policy limits, the absence of any
            excess policy, and the subrogation rights of any UIM
            carrier[.]

      When GEICO did not respond, Cascarino's counsel renewed the demand

for payment in a second letter dated January 13, 2017, which stated:

                   I trust that after your review of the enclosed
            records, you can clearly recognize that the value of the
            subject claim far exceeds your client's available policy
            limits. My client was a pedestrian struck by YOUR
            INSURED 100% NEGLIGENTLY and proximately
            caused an immediate surgical emergency which
            required weeks of rehabilitation, for which permanent
            and significant lasting injuries will continue. Be
            advised that, notwithstanding the foregoing, as stated in
            my letter dated December 13, 2016, I am prepared to
            recommend settlement for those policy limits provided
            same are tendered by January 15, 2017. Following

                                                                        A-1266-19T1
                                       3
            expiration of the addressed time frame, I will actively
            prepare this matter trial and will not thereafter consider
            settlement within the available policy limits.

      GEICO responded in a letter dated January 24, 2017, confirming its

conversation with Cascarino's counsel regarding the settlement, stating:

"Enclosed is the release . . . representing the full and final settlement of your

client's injury claim." Cascarino did not sign the release. On March 1, 2017,

GEICO sent a check for $100,000 to Cascarino with the following language: "In

Payment Of Bodily Injury Coverage FULL AND FINAL PAYMENT OF ALL

CLAIMS ARISING FROM DOL 08/09/2016[.]" Cascarino's counsel signed the

check and deposited it into his attorney trust account on April 12, 2017.

      On May 10, 2018, Cascarino's counsel presented a demand to Selective,

stating:

            Tomasello is clearly a negligent party who was the
            proximate cause for . . . Cascarino's injuries . . . .
            Tomasello's GEICO liability insurance had a policy
            limit of $100,000 which was tendered . . . but there is
            still a substantial amount for economic loss/pain and
            suffering that was clearly not covered by his GEICO
            insurance.     Therefore, under . . . Cascarino's
            Underinsured Motorist policy coverage, we are
            demanding $150,000 as compensation for his injuries
            and would like to avoid unnecessary litigation.

Selective contacted Cascarino's counsel inquiring whether he had complied with

Longworth v. Van Houten, 223 N.J. Super. 174 (App. Div. 1988), and notified

                                                                            A-1266-19T1
                                        4
Selective regarding the settlement with GEICO. Cascarino's counsel responded

in a letter dated May 31, 2018, stating:

                    By letter[s] dated May 10, 2018 and May 18,
            2018, you were provided with sufficient evidence that
            . . . Cascarino's damages far exceed the $100,000.00
            previously tendered by GEICO, the tortfeasor's liability
            insurer, and the available limits available under the
            underinsured portion of . . . Cascarino's Selective
            Policy.

                   In response, you requested that I provide you
            with a "[Longworth]" letter, which I assume would be
            to request Selective's permission to sign a general
            release, releasing the tortfeasor from any future claims
            or, in the alternative, to pay the $100,000 tendered by
            GEICO.

                   Please note that GEICO did not condition the
            $100,000 payment on the signing of a general release,
            so we are not seeking permission to execute one at this
            time. In fact . . . Cascarino has not signed any release,
            as we may also be seeking damages against the hospital
            for negligence. However, please accept this letter as an
            agreement to assign . . . Cascarino's claim against the
            tortfeasor to you, up to the limits of our client's
            underinsured motorist recovery.

                   In exchange for this assignment, and in
            recognition of the nature and the extent of . . .
            Cascarino's damages, I am again presenting you with a
            settlement demand in the amount of $150,000, which
            equals the limits of available underinsured motorist
            coverage, reduced by the amount recovered under the
            tortfeasor's liability policy.

                                                                        A-1266-19T1
                                           5
      Following an investigation, Selective declined coverage for Cascarino's

claim stating:

            GEICO . . . issued a check in the amount of their policy
            limit of $100,000 made payable to [Cascarino's
            counsel] and . . . Cascarino on March 1, 2017.
            [Cascarino's counsel] and . . . Cascarino endorsed the
            check and it was cashed on or about 4/12/2017.
            Selective was not placed on notice of [Longworth] prior
            to your settlement with GEICO. You did not comply
            with [Longworth]. Accordingly, as outlined below, we
            must respectfully disclaim coverage[.]

                  ....

                   Based upon our investigation we have identified
            certain provisions of the policy which are applicable to
            this claim. In this section, we will review those parts
            of the policy and explain why coverage is not available
            under the terms of the policy.

      Selective pointed to the UIM exclusion in Cascarino's policy, which

stated: "We do not provide coverage under this endorsement for . . . 'bodily

injury' sustained by any 'insured' . . . if that 'insured' or legal representative

settles any bodily injury or property damage claim with the owner or operator

. . . without our written consent." Selective denied coverage based upon "its

conclusion that the depositing of the check from GEICO constituted an 'accord

and satisfaction' between Cascarino and Tomasello[,] which terminated

Selective's subrogation rights against Tomasello."

                                                                          A-1266-19T1
                                        6
      Cascarino's counsel sought reconsideration arguing "[t]he position taken

in your [June 29, 2018] response will expose Selective to [a] bad faith [claim]

because they are under an incorrect legal assumption that [Cascarino] settled the

underlying case with the tortfeasor." He repeated "[t]here has been no release

of the tortfeasor in this accident [and] simply giving $100,000 to the injured

victim WITHOUT a release does not trigger [Longworth]." Selective denied the

claim.

      On July 12, 2018, Cascarino's counsel sent GEICO a letter requesting

confirmation that Cascarino did not release Tomasello from any claim of

personal liability. GEICO, through counsel assigned to Tomasello, responded:

            Although no release was ever executed by . . .
            Cascarino, your office endorsed and deposited the
            settlement check after GEICO provided your office
            with a release and affidavits of no insurance.
            Accordingly, it is . . . Tomasello's position that your
            client's claims against him have been fully satisfied and
            released. Your contention that . . . Cascarino never
            intended to release . . . Tomasello is undermined by the
            simple fact that the settlement check, bearing the
            statement "FULL AND FINAL PAYMENT OF ALL
            CLAIMS ARISING FROM DOL [August 8, 2016],"
            was endorsed and deposited by you after GEICO
            provided you with affidavits of no insurance and made
            clear in its January 24, 2017, letter that it would pay its
            policy limits in settlement of all claims against its
            insured. If it was not your intention to fully resolve all
            claims against . . . Tomasello at that time, then the
            check should not have been deposited. Moreover, by

                                                                          A-1266-19T1
                                        7
            waiting more than a month to issue the check, GEICO
            gave you more than sufficient time to contact Selective
            . . . and advise Selective of the settlement offer and your
            client's wish to accept that settlement. The obligation
            to notify Selective, your client's UIM carrier, was
            exclusively your client's obligation. Rutgers Cas. Ins.
            v. Vassas, 139 N.J. 163, 174 (1995). In Longworth
            . . . , the court held, "as a matter of future conduct, an
            insured receiving an acceptable settlement offer from
            the tortfeasor should notify his UIM carrier.["] . . . It
            was not . . . Tomasello's responsibility to notify
            Selective and any failure to preserve Selective's
            subrogation rights rests solely with . . . Cascarino.

      In July 2018, Selective filed a complaint naming Cascarino, Tomasello,

and GEICO as defendants. The complaint alleged "[h]ad Cascarino sought

Selective's consent to settle his claims against Tomasello, Selective would have

elected to pay Cascarino the amount of Tomasello's liability limits with GEICO

and filed a subrogation claim against Tomasello." The complaint asserted "the

cashing of the GEICO check by Cascarino served as an accord and satisfaction

of any and all claims Cascarino had or may have had against . . . Tomasello."

Selective sought declaratory judgment against Cascarino and GEICO, and

subrogation against Tomasello in the event Cascarino was not barred from

seeking UIM benefits from Selective.

                                                                          A-1266-19T1
                                        8
      Tomasello's counsel contacted Cascarino and demanded return of the

$100,000 if Cascarino maintained there was no settlement. However, Cascarino

retained the money and on August 9, 2018, signed a release which stated:

            [T]he Releasor hereby, releases and forever discharges
            Releasees . . . from any and all liability of whatever type
            for any and all claims of every kind, nature and
            description whatsoever, whether in law or in equity,
            arising out of, or in any way relating to any and all
            claims, actions, causes of action, demands, rights
            damages, costs . . . resulting or caused by the motor
            vehicle accident involving Releasor and . . . Tomasello
            on August 9, 2016[.]

      Cascarino did not contact Selective or obtain approval to sign the release.

After Selective learned of the release execution, it filed an amended complaint

containing three counts for "declaratory judgment against Cascarino to the effect

that Selective does not owe Cascarino UIM benefits . . . declaratory judgment

against GEICO; and . . . subrogation against Tomasello."                  Cascarino

counterclaimed for breach of contract and bad faith, and sought a declaratory

judgment that he was entitled to the UIM benefits.

      Cascarino and Selective each sought summary judgment. Tomasello and

GEICO sought summary judgment dismissal of the claims against them. On

October 24, 2019, Judge James H. Pickering, Jr. granted Selective's motion for

                                                                            A-1266-19T1
                                        9
summary judgment, denied Cascarino's motion for summary judgment, and

granted GEICO's and Tomasello's motion for summary judgment.

      The judge found Cascarino was not entitled to Selective's UIM coverage.

At the outset, the judge noted the following facts were not in dispute:

            Selective was not notified of [Cascarino's] settlement
            demand for GEICO's policy limits; Selective was not
            notified that the check in the amount of the policy limits
            had been sent by GEICO and received by Cascarino's
            attorney; Selective was not notified that the GEICO
            check included the notation "FULL AND FINAL
            PAYMENT OF ALL CLAIMS ARISING FROM DOL
            08/09/2016"; and Selective was not notified that the
            check had been endorsed by Cascarino and his attorney
            and deposited in his attorney's trust account. Selective
            was not notified of the GEICO payment until Cascarino
            sent a letter to Selective on May 8, 2018[,] and on May
            18, 2018, which letters demanded the full amount of the
            UIM coverage and which letter included a copy of the
            GEICO check. This was [thirteen] months since the
            check had been deposited.

                  ....

                  Cascarino never notified Selective that GEICO
            had presented him with a release that paid him the
            GEICO policy limits and that released Tomasello; and
            Cascarino never notified Selective that Cascarino
            desired to sign the release.

The judge considered the undisputed facts and the consequences of Cascarino's

actions before he deposited GEICO's check, "after GEICO's attorney sent his

                                                                          A-1266-19T1
                                       10
letter on July 26, 2018[,] which potentially opened up any settlement, and before

Cascarino signed the release."

      The judge concluded there was accord and satisfaction because Cascarino

and GEICO "disagreed about how much Cascarino was entitled to for [the]

injuries he sustained[,] . . . GEICO intended its $100,000 payment to settle any

and all claims against Tomasello[,]" and Cascarino accepted GEICO's check by

depositing it. The judge found Cascarino's failure to sign the release provided

by GEICO meant there was no release, but did not negate the fact there was a

settlement. He concluded "[t]he accord and satisfaction . . . has the effect of

terminating any ability by Selective to pay Cascarino UIM benefits, and then

seek subrogation against Tomasello."

      Analyzing the undisputed facts after GEICO's attorney sent a letter

demanding return of the check, the judge concluded as follows:

            At this point, Cascarino was thrown a lifeline. He could
            legitimately argue that there was not a settlement; even
            GEICO said there was not a settlement . . . . Cascarino
            could then send a Longworth letter to Selective, inform
            Selective of the proposed settlement, and wait for them
            to reply . . . . Instead, . . . Cascarino signed a release
            without notice to Selective. The release clearly
            precludes any subrogation by Selective against
            Tomasello.

                                                                         A-1266-19T1
                                       11
The judge concluded "Cascarino violated his duty to inform Selective as

required by [Longworth] . . . and as required by his insurance contract . . . .

Therefore, Selective is relieved of its obligation to provide UIM coverage to

Cascarino."

                                      II.

      Our review of an order granting summary judgment is de novo. Graziano

v. Grant, 326 N.J. Super. 328, 338 (App. Div. 1999). "[W]e review the trial

court's grant of summary judgment . . . under the same standard as the trial

court." Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh,

224 N.J. 189, 199 (2016). The court must consider all of the evidence submitted

"in the light most favorable to the non-moving party," and determine if the

moving party is entitled to summary judgment as a matter of law. Brill v.

Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). If the evidence

presented "show[s] that there is no real material issue, then summary judgment

should be granted." Walker v. Atl. Chrysler Plymouth, Inc., 216 N.J. Super.

255, 258 (App. Div. 1987) (citing Judson v. Peoples Bank & Tr. Co. of

Westfield, 17 N.J. 67, 75 (1954)).

      On appeal, Cascarino argues he never violated Longworth. He argues that

his deposit of the GEICO check did not constitute an accord and satisfaction or

                                                                       A-1266-19T1
                                     12
a release of Tomasello from liability. He asserts even if accord and satisfaction

applied, the judge should have denied summary judgment because there were

material disputes in fact regarding whether Cascarino and Tomasello had

reached a settlement manifested by mutual intent and there was no evidence of

prejudice to Selective by Cascarino depositing GEICO's check.

      In Longworth, we held "an insured receiving an acceptable settlement

offer from the tortfeasor should notify his UIM carrier. The carrier may then

promptly offer its insured that sum in exchange for assignment to it by the

insured of the claim against the tortfeasor." 223 N.J. Super. at 174. In Ferrante

v. N.J. Mfrs. Ins. Grp., the Supreme Court explained the

            duty to notify in the UIM context is intended to protect
            a carrier's right of subrogation . . . . The law "highly
            favors" subrogation as "a device of equity to compel the
            ultimate discharge of an obligation by the one who in
            good conscience ought to pay it." Holloway v. State,
            125 N.J. 386, 394 (1991). In practice, the insurer may
            choose to pay out the insured for the loss and retain a
            cause of action against the tortfeasor.

                  ....

                   To protect those interests, we identified the
            occasions when the insured must notify the carrier: (1)
            when he or she takes legal action against the tortfeasor;
            (2) "[i]f, during the pendency of the claim, the
            tortfeasor's insurance coverage proves insufficient to
            satisfy the insured's damages"; and (3) if the insured is
            seeking UIM benefits because he or she "receive[d] a

                                                                         A-1266-19T1
                                      13
            settlement offer . . . that does not completely satisfy the
            claim, because the tortfeasor is underinsured."
            [Rutgers Cas. Ins. Co., 139 N.J. at 174].

            [232 N.J. 460, 469-71 (2018) (internal citations
            omitted).]

      We reject Cascarino's arguments that there was no accord and satisfaction

and hence no settlement for the same reasons expressed in Judge Pickering's

opinion. The undisputed facts in the record clearly show Cascarino settled with

Tomasello. The settlement was affirmed when Cascarino deposited GEICO's

check, which stated it was in full and final settlement of his injury claim, without

qualification. Cascarino's execution of the release was the final clear indicat or

he had settled the matter with Tomasello.          Cascarino's conduct violated

Longworth, the clear terms of his UIM policy, and pursuant to Ferrante, deprived

Selective of its ability to pursue Tomasello by way of a subrogation action.

      We also reject Cascarino's argument that Selective was required to show

it was prejudiced by Cascarino's actions in order to deny UIM coverage. As

Judge Pickering noted,

            Ferrante holds otherwise. Here, Selective never had the
            opportunity to exercise its rights; therefore, it is not
            required to show that Cascarino's violations caused it
            prejudice. By settling the case, by endorsing and
            depositing the check . . . , Cascarino caused the
            irretrievable loss of Selective's rights to subrogation
            before Selective ever learned of the existence of the

                                                                            A-1266-19T1
                                        14
            claim. Then, by signing the release . . . , Cascarino
            sealed Selective's fate. Pursuant to Ferrante, Selective
            does not need to show prejudice in these circumstances.

      We agree. The Ferrante Court rejected the insured's argument the trial

court should have considered whether "he negligently, rather than intentionally,

violated Longworth, [and] conduct a prejudice analysis [where there were] . . .

numerous landmarks where Ferrante could have, and should have, but did not

notify [his carrier of a settlement with tortfeasor]." 232 N.J. at 474. The Court

stated: "Our decision here is not rooted in Ferrante's state of mind, but rather in

his actions." Ibid. The Court concluded:

            If . . . the insured, regardless of his state of mind, fails
            to give the UIM carrier any notice of the UIM claim
            until after the final resolution of the underlying tort
            action, thereby causing the irretrievable loss of the
            carrier's rights to subrogation and intervention before
            the carrier has ever learned of the existence of the
            claim, coverage is forfeited.

            [Ibid.]

      Likewise, no such analysis was required here as Cascarino's settlement of

the case extinguished Selective's subrogation claim.         The undisputed facts

support summary judgment in Selective's favor.              Cascarino's remaining

arguments lack sufficient merit to warrant discussion in a written opinion. R.

2:11-3(e)(1)(E).

                                                                           A-1266-19T1
                                       15
Affirmed.

                 A-1266-19T1
            16