Court Opinion

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Opinions of the United
2006 Decisions                                                                                                             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Precedential or Non-Precedential: Precedential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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                                       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

                              1
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 defendant-
appellees 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.

                                 2
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

       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
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

       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
       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.

                                 5
       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

       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
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

                                  7
       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

                                8
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

                                9
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

       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
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

       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
       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

                                12
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

                                13
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

                                 14
       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

       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
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:

                                 16
       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

                                17
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

       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
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

       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
summary judgment and remand for further proceedings
consistent with this opinion.

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