Court Opinion

ID: 2799491
Source: CourtListenerOpinion
Date Created: 2015-05-08 14:11:47.322569+00
Date Added: 2024-06-11T11:55:31.279949
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                APPROVAL OF THE APPELLATE DIVISION

                                   SUPERIOR COURT OF NEW JERSEY
                                   APPELLATE DIVISION
                                   DOCKET NO. A-4398-13T4
                                               A-0275-14T4

PATRICIA C. MYSKA, DAX MORALES
and KATHERINE K. WAGNER,
                                       APPROVED FOR PUBLICATION
      Plaintiffs,
                                             May 8, 2015
and
                                         APPELLATE DIVISION
JOHN B. TODISCO,

      Plaintiff-Appellant,

v.

NEW JERSEY MANUFACTURERS
INSURANCE COMPANY and AAA
MID-ATLANTIC INSURANCE COMPANY
OF NEW JERSEY,

      Defendants,

and

PALISADES INSURANCE COMPANY,

     Defendant-Respondent.
_________________________________________

PATRICIA MYSKA and KATHERINE WAGNER,

      Plaintiffs-Appellants,

and

JOHN B. TODISCO and DAX MORALES,

      Plaintiffs,

v.
NEW JERSEY MANUFACTURERS
INSURANCE COMPANY,

      Defendant-Respondent,

and

PALISADES INSURANCE COMPANY and
AAA MID-ATLANTIC INSURANCE COMPANY
OF NEW JERSEY,

     Defendants.
_________________________________________

          Argued January 20, 2015 - Decided May 8, 2015

          Before Judges Lihotz, Espinosa and St. John.1

          On appeal from the Superior Court of New
          Jersey, Law Division, Bergen County, Docket
          No. L-5136-13.

          Eric D. Katz and Stephen T. Sullivan, Jr.,
          argued the cause for appellants (Mazie
          Slater Katz & Freeman, LLC, and Keefe
          Bartels, LLC, attorneys; Mr. Katz, David M.
          Estes, and Mr. Sullivan, on the briefs).

          Bruce D. Greenberg and Daniel J. Pomeroy
          argued the cause for respondent (A-0275-14)
          New Jersey Manufacturers Insurance Company
          (Lite DePalma Greenberg, LLC, and Pomeroy,
          Heller & Ley, LLC, attorneys; Mr. Greenberg,
          Mr. Pomeroy, and Karen E. Heller, on the
          briefs).

          Robert J. DelTufo (Skadden, Arps, Slate,
          Meagher & Flom, LLP) argued the cause for
          respondent (A-4398-13) Palisades Insurance
          Company.

1
     Judge Espinosa did not participate in oral argument.
However, with the consent of counsel, she has joined in this
opinion. R. 2:13-2(b).

                                2                         A-4398-13T4
              The opinion of the court was delivered by

LIHOTZ, P.J.A.D.

       On    remand       from       the    Supreme         Court,     we    consider       these

appeals, calendared back-to-back and consolidated for purposes

of    our   opinion.          In     their    putative         class    action      complaint,

plaintiffs         challenged         defendant-insurers'              alleged      denial       of

diminution        in   value       damages,       as    a    covered     component       of    the

underinsured           and    uninsured           motorist          provisions      in      their

respective         automobile        insurance         policies.        The     interlocutory

orders under review were entered upon defendants' motions to

dismiss       plaintiffs'            complaint.              Specifically,          plaintiffs

Patricia C. Myska, Katherine K. Wagner, and John B. Todisco

appeal      from    two      March    21,    2014       orders      striking     their      class

allegations         and      dismissing       their          claims     against      defendant

insurers for violation of the Consumer Fraud Act (CFA), N.J.S.A.

56:8-1 to -195.               Prior to discovery, the Law Division judge

concluded         class      certification             was    improper        and    the       CFA

inapplicable.          He severed the surviving breach of contract and

the   implied       covenant       of      good   faith       and     fair    dealing     claims

alleged      by     Myska      and      Wagner        against       defendant     New     Jersey

Manufacturers Insurance Company (NJM); all claims asserted by

Todisco       against          defendant              Palisades        Insurance         Company

                                                  3                                      A-4398-13T4
(Palisades) were dismissed and the matter was ordered to proceed

to arbitration.2

     Plaintiffs challenge as premature the denial of their class

allegations.     Further, they argue the judge erred in ordering

the dismissal of their CFA claims and for Todisco to proceed to

arbitration.

     Following       our    review,      we     affirm    the     denial     of    class

certification, agreeing the controversy does not lend itself to

a class action because the facts underpinning each plaintiff's

claims   were   dependent        upon    the     individual       insurance       policy

provisions,     the    distinct        vehicle     damaged       and   the    specific

calculation     of     damages         alleged,       which      require      separate

litigation of every action.              We also determine the amounts in

controversy are not nominal and would not prevent any party's

singular pursuit of relief were their claims individually tried.

Finally,   specific        to   the   Palisades       policy,    we    determine     the

arbitration provision is unenforceable as it fails to meet the

requirements    outlined        in    Atalese    v.     U.S.   Legal    Servs.     Grp.,

L.P., 219 N.J. 430 (2014), petition for certiorari filed Jan.

21, 2015, and reverse that provision of the Law Division order.

Nevertheless,    because         Todisco       failed    to     file   a   claim     for

2
     Plaintiff Dax Morales voluntarily dismissed claims against
defendant AAA Mid-Atlantic Insurance Company of New Jersey.

                                           4                                  A-4398-13T4
diminution      of       value       damages,        his     complaint        was     properly

dismissed.      Consequently, the Law Division order is affirmed as

modified.

                                                I.

      In this section we recite the undisputed facts surrounding

each plaintiff's claims taken from the motion record.                                  Because

there are two parties insured by NJM, we group together the

facts surrounding the claims presented by Myska and Wagner (NJM

plaintiffs).            We    then     examine       Todisco's   allegations           against

Palisades.         Finally,          we    discuss     the    motions    and        the   trial

judge's     findings         and   conclusions         undergirding      the        challenged

orders.

                                                A.

      On    July     31,      2011,       Myska's     2011    Chevy    Equinox       suffered

physical     damage      when      struck       by   an    uninsured     or    underinsured

tortfeasor.        On November 14, 2012, Wagner's 2011 Mercedes Benz

E350 was struck by a motorist who ran a red light, causing

significant damage requiring structural repair.                           The tortfeasor

was   either       an    uninsured         or   underinsured         motorist        (UM/UIM).

Myska and Wagner were insured under separate automobile policies

issued by NJM.               It is agreed their accidents occurred within

their      respective         policy      periods      and    both     submitted          claims

invoking the respective NJM policy provisions.

                                                 5                                    A-4398-13T4
      NJM satisfied claims for repair of physical damage to the

NJM plaintiffs' vehicles, in accordance with the terms of their

respective        policies.        Despite      repair,       Myska       and    Wagner        each

maintained        their     vehicles'      values      had    decreased         as    a    direct

result      of    the    accidents.        In       April    2013,      Myska     and      Wagner

separately submitted a second claim for payment, seeking payment

for diminution of value.

      With       respect     to    the   issues       raised       on    appeal,      the        NJM

policies         contain      identical         terms        governing          payment          for

diminution of value following conduct by an UM/UIM.                                  Part B of

the   NJM    policies       addresses      the      scope     of    uninsured        motorists

coverage, and provides, generally: "[NJM] will pay compensatory

damages which an insured is legally entitled to recover from the

owner or operator of an uninsured motor vehicle or underinsured

motor    vehicle"        arising    from    "[p]roperty            damage       caused      by    an

accident         . . . ."    "Property damage as used in this endorsement

means injury to or destruction of:                    1. Your covered auto."

      To    support       their    diminution         of    value       claims,      Myska       and

Wagner separately supplied a report from Collision Consulting

(CC), quantifying the amount sought.                        As to Myska, CC inspected

her   vehicle       to    "assess    the    quality         and    thoroughness           of     the

repairs performed as well as to determine what effect, if any,

the loss . . . would have on the value of this vehicle."                                          CC

                                                6                                         A-4398-13T4
defined "Inherent Diminishment of Value" as "the loss of value

stemming from [an automobile's] accident history[,] as opposed

to the diminishment [of value] that could arise from improper or

defective/deficient repair."      CC suggested:

              [w]hen   a   reasonable    and   prudent
         consumer is given the choice between two
         vehicles, one that has sustained previous
         damage and one that had not . . . they will
         buy the one that has not been involved in an
         accident if priced the same.         For the
         consumer demand to be equal on the two
         vehicles, the damaged vehicle, even when
         properly repaired, must be less in price.

                . . . .

              It is generally accepted that the
         proper measure of loss is the difference
         between the fair market value (FMV) of the
         property (vehicle) immediately prior to the
         negligent act and the fair market value
         after the loss.

    Averaging   the   vehicle's    calculated     residual   value   in   a

third-party sale and after a trade-in, CC determined the average

residual diminished value for Myska's vehicle was $14,399.                In

the report prepared following inspection of Wagner's vehicle, CC

set forth the same definitions and utilized the same methodology

to calculate the average residual diminished value of Wagner's

vehicle as $17,524.

    Following its receipt, NJM responded to Myska and Wagner in

separate, but identical letters, stating "NJM denies payment of

                                   7                             A-4398-13T4
[the] diminished value claim[s] at this time."         The letters

explained:

         [T]o   the  extent   that   New  Jersey   law
         recognizes claims for diminished value, you
         have failed to offer sufficient proof of
         diminished value for [the] vehicle. . . .

              . . . .

              In support of your claim, you provided
         a report by [CC].            The report is
         insufficient to support a claim for monetary
         loss.    Specifically, the report fails to
         describe the evidence that supports the
         author's   conclusion  that   [the]  vehicle
         sustained a diminished value for a certain
         amount.   No data is provided for the sales
         price of comparable vehicles that were sold
         after being involved in an accident.    Also
         the raw data used by the author to come to
         his conclusion regarding the diminution in
         value has not been provided.

The letter recited the absence of available authority to guide

calculation of the diminished value loss, noting:

         [t]he New Jersey Department of Banking and
         Insurance   [(DOBI)]     does    not   recognize
         diminution in value in its regulations
         relating to "fair and equitable settlements
         applicable    to    property     and   liability
         insurance   with    regard    to   third[-]party
         claimants."   N.J.A.C. 11.2-17.10.      Nor does
         the   [DOBI]     recognize    the    claim   for
         diminished value in its regulations relating
         to "Adjustment of Partial Losses." N.J.A.C.
         11.3-10.3. . . .      It is clear that these
         regulations do not contain a requirement
         that an insurer pay diminished value damages
         to a third[-]party claimant.           Moreover,
         there is no relevant New Jersey statute,
         addressing this issue.

                                8                           A-4398-13T4
                In addition to the above, the Model
           Civil Jury Charges, which summarize relevant
           New Jersey law, state that if a vehicle is
           not deemed a total loss "and it can be
           repaired at a cost less than the difference
           between its market value before and its
           market value after the damage occurred[,]
           the plaintiff's damages would be limited to
           the cost of repairs."       Model Civil Jury
           Charge 8.44.     Additionally, motor vehicle
           appraisal   guides[,]   including    the   NADA
           Official Used Car Guide and Kelley's Blue
           Book do not consider prior accidents as a
           factor when calculating their published
           figures.      Based   upon   the    information
           provided, there is insufficient evidence to
           prove    that    [plaintiff]     sustained    a
           diminished value loss that would justify
           payment over and above the cost of repairs.

                Lastly, the time at which the alleged
           damage would be capable of true measurement
           is unknown.     Thus, until the vehicle was
           sold,   the   measurement   of    the   alleged
           diminution    claim   would    be    uncertain.
           Assuming that a damaged vehicle has been
           properly    repaired   with     high    quality
           replacement parts, it is reasonable to
           encounter a situation where an expert would
           state that the vehicle has not decreased in
           value except for the passage of time between
           the accident, and repair of the vehicle and
           the sale of the vehicle.

    Neither      Myska   nor    Wagner       replied   to    NJM's    letter     and

neither submitted the requested data used by CC to support its

damage   calculations.         Instead,       the   NJM     plaintiffs     filed    a

putative   class   action      complaint      on    behalf    of    NJM   insureds,

alleging   the     insurer's     actionable         denial     of    payment     for

diminution of value represented a breach of contract, breach of

                                         9                                 A-4398-13T4
the covenant of good faith and fair dealing, and violation of

the CFA.        On behalf of the class, the NJM plaintiffs sought to

"put an end to NJM's systematic practice of denying, obfuscating

coverage        of,       or     otherwise      avoiding        claims         by    New    Jersey

consumers       for       the     diminution      of        value    of    insured         vehicles

resulting from third-party UM/UIM."                         Further, the NJM plaintiffs

asserted NJM failed to disclose the right to submit third-party

UM/UIM diminution of value claims at the time their respective

repair claims were made.

                                                 B.

    Todisco insured two automobiles under a policy issued by

Palisades.            A    2007      Bentley     Continental,             covered      under     the

policy,       was     involved        in   an    accident        with      an       uninsured     or

underinsured tortfeasor on June 13, 2012.                             Todisco submitted a

claim    to     repair         the   damage     sustained       to    the       Bentley,      which

Palisades paid in accordance with the policy terms.

    Subsequently, in a February 15, 2013 letter to Palisades,

Todisco advised Palisades he was "making a claim for diminished

value     damages"         and       requested        the    insurer's         "position        with

respect to a diminished value claim," pursuant to the policy's

UM/UIM    coverage             provisions.       The        letter   did       not    recite     the

amount     of       damages       suffered       or    a     method       to    determine        the

associated loss.

                                                 10                                        A-4398-13T4
       The Palisades policy provisions contain similarities to the

NJM policy, as both contracts are based on the Standard New

Jersey       Automobile      Policy     (as        distinguished          from    a      Basic

Automobile       Liability      Policy),3          but     the     documents      are       not

identical.       Nothing in the Palisades policy explicitly precludes

recovery for diminution of value damages.

                                           C.

       NJM     moved   to    dismiss    the     NJM      plaintiffs'       complaint        for

failure to state a claim for relief, contending the NJM policies

provided coverage for diminution of value damages, if supported.

NJM    argued    it    did   not   "fail      to    pay"    the    claims;       plaintiffs

simply       failed     to   submit     "adequate          proof     to     support         the

substantial diminution of value damages claimed via the opinion

of    Collision       Consulting";     therefore,          there    was    no    breach      of

contract.       NJM also asserted New Jersey law does not impose a

duty to instruct insureds regarding policy provisions; the CFA

does     not     govern      disputes      regarding         payment       of    insurance

benefits; and Myska and Wagner "provide[d] no basis supporting

either reformation . . . or . . . injunctive relief."                              Finally,

the notice of motion also requested "the [c]ourt enter an order

severing the action by plaintiffs Wagner and Myska against [NJM]

3
     See N.J. Dept. of Banking & Ins., http://www.state.
nj.us/dobi/division_consumers/insurance/standardpolicy.html
(last visited Apr. 15, 2015).

                                           11                                         A-4398-13T4
from the action brought by . . . Todisco," arguing joinder of

unrelated claims against multiple unrelated insurance companies

was improper.

    During argument, NJM acknowledged the policy provided for

reimbursement     of    all    legal       available      damages,   which     would

include   diminution     of    value       damages;    however,    the   proofs   by

Myska   and    Wagner   were        deficient.        Plaintiffs     opposed   this

position,     suggesting      NJM    was    attempting     to   prematurely     seek

summary judgment.

    Palisades filed its own motion to dismiss Todisco's claims,

asserting different reasons.            Palisades maintained Todisco never

submitted a claim for diminution of value damages or identified

a policy provision that was breached.                 Further, Palisades argued

coverage disputes must be determined in an arbitral forum.

    The Law Division judge entered two orders on March 21,

2014, accompanied by a written opinion.                    The first, regarding

NJM, granted in part and denied in part, its requested relief.

Specifically,     the    judge       found      certain    allegations       legally

untenable.     He noted the law imposed no duty upon insurers to

advise plaintiffs of policy provisions or explain clearly worded

provisions of a policy once the policy was issued.                   Accordingly,

claims premised on the failure to advise plaintiffs of a right

to pursue damages arising from a proven diminishment of value

                                           12                              A-4398-13T4
lacked merit.          He also concluded claims contending failure to

pay benefits were not within the scope of the CFA.                        Further, the

judge dismissed plaintiffs' demands for reformation, injunctive

relief, and punitive damages, after finding the allegations were

"nothing more than conclusory statements[,] which are directly

contradicted by documents that are integral to the [c]omplaint."

However,       the    judge    allowed     the     NJM     plaintiffs'     breach      of

contract claims to proceed "individually," after finding "the

factual differences between the parties required a separation of

the claims."

    As to these claims, the judge denied class certification,

concluding      a    class    action   would     be      unsuitable    based    on    the

nature    of    the    significant       factual      differences      regarding      the

allegations supporting each plaintiff's action.                       The judge found

plaintiffs' "common allegation that [they] suffered harm because

they did not receive coverage for the diminution of value of

their    vehicle[s]      is    contradicted      by    the   unique     circumstances

surrounding      the[ir]      different    claims."          He   noted    by   way     of

illustration, NJM's proofs showing the NJM plaintiffs' claims

were not denied, merely unsubstantiated, and, as asserted by

Palisades, Todisco never filed such a claim.

    The     second      order    addressed       Palisades'       requested     relief,

which was granted.            The judge dismissed Todisco's complaint and

                                           13                                   A-4398-13T4
compelled him to arbitrate his claims "in accordance with the

arbitration provisions contained in his" insurance policy.                    The

judge characterized Todisco's letter as a "mere inquiry" and

found it did not "afford[] Palisades the opportunity to evaluate

a bona fide claim under the terms of the . . . policy and

respond to it."        Further, the Palisades contract contained an

agreement to arbitrate all issues involving the insured's and

insurer's      "relationship    and   any   disputes       occurring    between

them."

    The     NJM   plaintiffs    appealed    from   the     provisions   of    the

March    21,    2014   order   striking     the    class     allegations      and

dismissing     their   CFA   claims   (A-0275-14).       Todisco   separately

appealed from the dismissal of his claims in favor of complying

with the policy's arbitration clause (A-4398-13).                  Plaintiffs

moved for leave to appeal, which was denied by this court.                     By

order dated September 9, 2014, the Supreme Court granted leave

for plaintiffs to appeal and summarily remanded the matter to

this court for review of the merits.

                                      II.

    Some of the arguments raised in the separate appeals are

identical, and others are distinctly based upon claims under an

individual insurance policy.          In addressing the various issues

                                      14                                A-4398-13T4
presented, we join claims common to both appeals.                      Before doing

so, we set forth the standards guiding our review.

                                        A.

    The      orders      under    review       resulted        from     defendants'

respective motions to dismiss, filed pursuant to Rule 4:6-2(e).

            The   standard  traditionally   utilized  by
            courts to determine whether to dismiss a
            pleading for failure to state a claim on
            which relief may be granted is a generous
            one.   As we have explained, "[i]n reviewing
            a complaint dismissed under Rule 4:6-2(e)
            our inquiry is limited to examining the
            legal sufficiency of the facts alleged on
            the face of the complaint."   Printing Mart-
            Morristown v. Sharp Elecs. Corp., [116 N.J.
739,] 746 [(1989)].   The essential test is
            simply "whether a cause of action is
            'suggested' by the facts."    Ibid. (quoting
            Valentzas v. Colgate-Palmolive Co., 109 N.J.
189, 192 (1988)).

            [Green v. Morgan Props., 215 N.J. 431, 451-
            52 (2013) (alteration in original).]

Where   a   "complaint      states    no     basis    for   relief      and   .    .   .

discovery    would    not   provide     one,    dismissal      of     the   complaint

[under Rule 4:6-2] is appropriate."                  Cnty. of Warren v. State,

409 N.J. Super. 495, 503 (App. Div. 2009) certif. denied, 201
N.J. 153, cert. denied, 561 U.S. 1026, 130 S. Ct. 3508, 177 L.

Ed. 2d 1092 (2010).

    An      additional      overlay    results       because    plaintiffs        seek

review as a class action.             See R. 4:32-1 (stating requirements

for maintaining a class action).                "A class action, generally,

                                        15                                    A-4398-13T4
permits      one   or     more    individuals     to   act   as     plaintiff      or

plaintiffs in representing the interests of a larger group of

persons with similar claims."              Lee v. Carter-Reed Co., 203 N.J.
496,   517    (2010).        The    "action     permits   'claimants      to      band

together' and, in doing so, gives them a measure of equality

against a corporate adversary, thus providing 'a procedure to

remedy a wrong that might otherwise go unredressed.'"                        Id. at

517-18 (quoting In re Cadillac V8-6-4 Class Action, 93 N.J. 412,

424 (1983)).

       In   our    review   of     each   of   these   questions,    we     owe    "no

deference     to    the   trial     court's    conclusions."        Rezem    Family

Assocs., LP v. Borough of Millstone, 423 N.J. Super. 103, 114

(App. Div.), certif. denied, 208 N.J. 368 (2011).                     Rather, we

must "search[] the complaint in depth and with liberality to

ascertain whether the fundament of a cause of action may be

gleaned even from an obscure statement of claim, opportunity

being given to amend if necessary."                Green, supra, 215 N.J. at

451-52 (citation and internal quotation marks omitted).                            See

also Int'l Union of Operating Eng'rs Local No. 68 Welfare Fund

v. Merck & Co., 192 N.J. 372, 386 (2007) (holding questions of

law related to class certification are reviewed de novo).

                                          16                                A-4398-13T4
                                         B.

      Common to both appeals is whether class certification was

prematurely     denied.      Plaintiffs         argue    the       determination            to

strike the class allegations prior to discovery, after finding

the claims were unsuitable to proceed as a class action, was

error.    They also contend the court "overstepped its bounds" in

analyzing the issues, by considering documents not referenced in

the complaint and drew improper inference from this document

review.

      "Class     certification       decisions          rest       [o]n        the      sound

discretion of the trial court."                Muise v. GPU, Inc., 371 N.J.

Super. 13, 31 (App. Div. 2004) (citing In re Cadillac, supra, 93

N.J. at 437).     "The analysis must be 'rigorous' and 'look beyond

the   pleadings    to   understand       the     claims,          defenses,      relevant

facts, and applicable substantive law.'"                   Local Baking Prods.,

Inc. v. Kosher Bagel Munch, Inc., 421 N.J. Super. 268, 274 (App.

Div.) (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88,

106-07 (2007)), certif. denied, 209 N.J. 96 (2011).

      In reviewing the grant or denial of class certification,

"an appellate court must ascertain whether the trial court has

followed [Rule 4:32-1(b)(3)'s] standards and properly exercised

its   discretion."        Carter-Reed,        supra,    203       N.J.    at    506.        An

"abuse    of   discretion    .   .   .   arises    when       a    decision      is      made

                                         17                                          A-4398-13T4
without      a    rational        explanation,    inexplicably         departed     from

established           policies,    or   rested   on    an    impermissible      basis."

Flagg   v.       Essex    Cnty.     Prosecutor,       171 N.J. 561,   571     (2002)

(citation and internal quotation marks omitted)).

    The provisions of Rule 4:32-1 obligate putative plaintiffs

to satisfy general and specific requirements.                          Local No. 68

Welfare Fund, supra, 192 N.J. at 382; Iliadis, supra, 191 N.J.

at 106.      See also Rule 4:32-1(a), (b).                  Prerequisites for class

certification include: numerosity, commonality, typicality, and

adequacy of representation.                Carter-Reed, supra, 203 N.J. at

511-512.     Class certification is appropriate only if:

             (1) the class is so numerous that joinder of
             all members is impracticable, (2) there are
             questions of law or fact common to the
             class, (3) the claims or defenses of the
             representative parties are typical of the
             claims or defenses of the class, and (4) the
             representative   parties  will   fairly  and
             adequately protect the interests of the
             class.

             [R. 4:32-1(a).]

    "In addition to meeting the initial requirements of Rule

4:32-1(a), the party seeking to certify the class must also

satisfy one of the three criteria enumerated in Rule 4:32-1(b)."

Varacallo v. Mass. Mut. Life Ins. Co., 332 N.J. Super. 31, 41-42

(App. Div. 2000).              These considerations examine "not only the

interests        of    class   members    and    other      parties,   but   also     the

                                           18                                   A-4398-13T4
effect of class certification on efficient judicial management,"

In re Cadillac, supra, 93 N.J. at 436, and include: (1) whether

individual lawsuits present risk of inconsistent judgments; (2)

the appropriateness of injunctive relief as to the class as a

whole;   or    (3)    whether     common   questions    or   law   and    fact

predominate over individualized questions and a class action is

superior to other available methods of adjudication.                     Muise,

supra, 371 N.J. Super. at 30.              Regarding the last provision,

pertinent findings should be made on:

          (A) the interest of members of the class in
          individually controlling the prosecution or
          defense of separate actions; (B) the extent
          and nature of any litigation concerning the
          controversy already commenced by or against
          members of the class; (C) the desirability
          or   undesirability  in   concentrating  the
          litigation of the claims in the particular
          forum; and (D) the difficulties likely to be
          encountered in the management of a class
          action.

          [R. 4:32-1(b)(3).]

In short, "the movant must demonstrate both the predominance of

the common issues and the 'superiority' of a cause of action

over other available trial techniques."                Saldana v. City of

Camden, 252 N.J. Super. 188, 196 (App. Div. 1991).

    "'New Jersey courts . . . have consistently held that the

class action rule should be liberally construed.'"             Carter-Reed,

supra,   203   N.J.    at   518    (alteration   in    original)    (quoting

                                      19                            A-4398-13T4
Iliadis, supra, 191 N.J. at 103).                Plaintiffs seeking class

certification have the burden of proof as to each of the rule's

requirements.        See Muise, supra, 371 N.J. Super. at 32.

                                       C.

     Plaintiffs' initial challenge to the order striking class

certification focus on the timing of the judge's determination.

Plaintiffs assert the judge erred in denying class certification

prior   to    discovery,    incorrectly     expanded   review    of   documents

outside the four corners of the complaint, and entered the order

despite notice.

                                       1.

     No      precise    procedures   are    established    for     granting    or

denying      class     certification       at   the    incipient      stage    of

litigation.      Rather, our rules state "the court shall, at an

early practicable time, determine by order whether to certify

the action."         Rule 4:32-2(a).    This language, adopted in 2007,

"is intended to make clear that the class determination need not

be the first event in the court's consideration of [an] action."

Pressler & Verniero, Current N.J. Court Rules, comment 3.2.2 on

R. 4:32-2 (2015).4

4
     The prior iteration       of this requirement provided: "As soon
as practicable after the        commencement of an action brought as a
class action, the court        shall determine by order whether it is
to be so maintained."          Riley v. New Rapids Carpet Center, 61
                                                           (continued)

                                       20                               A-4398-13T4
       Citing      dicta      from    Riley,    plaintiffs     suggest       it    is    well

established that class allegations may not be struck in the

course of a pre-trial motion to dismiss.                       See Riley, supra, 61

N.J. at 228 ("[A] court should be slow to hold that a suit may

not    proceed      as    a    class    action.").          Plaintiffs      suggest       the

"circumstances in Riley, where premature dismissal was reversed,

are identical, if not less egregious than, those in this case."

       Although      we       agree     courts      must     liberally       view       class

allegations and allow reasonable inferences to be gleaned from

the complaint's allegations and search for a possible basis for

class relief so as to avoid premature dismissals, Carter-Reed,

supra, 203 N.J. at 505-06, 518, we do not abide a view that

precludes     dismissal,        following       the   required       analysis,      when     a

court determines alleged claims do not properly lend themselves

to    class   certification.            See     Riley,      supra,    61    N.J.    at    225

(holding      "a    class      action    should       lie    unless    it    is     clearly

infeasible").

       In Riley, the Court examined the pre-trial denial of class

certification for bait-and-switch type consumer fraud claims,

(continued)
N.J. 218, 228 (1972). The Court commented on this rule noting,
"the draftsman was mindful of the difficulties involved and of
the latitude required. It would be rare that a decision to deny
a class action should be made on the face of the complaint."
Ibid.

                                               21                                   A-4398-13T4
where the defendants advertised a carpet deal at a special low

price,   accompanied      by   a   free    gift,     and   when    the    plaintiffs

attempted to take advantage of that deal, were redirected and

upsold   a   more   expensive      product.        Id.     at   222.      The    Court

considered the complaint and noted:

                  No doubt a consumer class action may
             hold problems not found in an antitrust
             action or a stock fraud suit where some
             rather precise act or omission radiates harm
             throughout    the    class.        If    the
             representations to consumers are so diverse
             that all of the individual transactions must
             be tried, there would be no economy of
             effort and expense and the litigation would
             be unmanageable.

             [Id. at 227.]

    Under      these      circumstances,       the    Court       found   pre-trial

dismissal     of    the    class   allegations        erroneous        because    the

plaintiffs' complaint included "a showing of a possible basis

for class relief" as to whether the defendants "ever intended to

sell carpet on the terms advertised."                Id. at 229.       Elaborating,

the Court instructed:

             When, as here, the approach to the consumer
             appears to be sharp or slick, a plaintiff
             should be permitted to seek relevant data
             from [the] defendants so that an informed
             decision may be made on the class-action
             issue.    Here, for example, it might be
             revealing if [the] plaintiffs were permitted
             to inquire of [the] defendants as to how
             many sales were made on the advertised basis
             and how many "free gifts" were delivered.
             The answers might support the charge that a

                                          22                                A-4398-13T4
              bait-and-switch tactic was employed, or as
              suggested by the positions taken by [the
              defendants], that the advertisement was
              merely a pretext to obtain salable leads of
              persons in the market for carpet.

              [Ibid.]

       Contrary      to       plaintiffs'        suggestions          in       this    matter,    the

test   does    not       merely       turn   on       the    stage        of    the    litigation.

Rather, dismissal is dependent on the nature of the claims and

the    propriety         of    their      presentation           as   a    class       action,      in

accordance with the provisions of Rule 4:32-1.                                  We flatly reject

plaintiffs'     urging          to    impose      a    bright-line             rule    prohibiting

examination         of    the     propriety           of    class      certification           until

discovery      is    undertaken.             See      e.g.,      Local         Baking    Products,

supra, 421 N.J. Super. at 280 (upholding dismissal of class

certification        when       putative       class        could     not       meet    "the     more

demanding criteria of predominance and superiority" (citation

and internal quotation marks omitted)).

       After    accepting            as   true     all      of    the      allegations         in   a

complaint,      and       considering        the       issues     in       the    context      of    a

challenge to class certification, the central inquiry remains:

whether the putative class raises "questions of law or fact

common to the members of the class [that] predominate over any

questions affecting only individual members, and that a class

                                                 23                                        A-4398-13T4
action is superior to other available methods for the fair and

efficient adjudication of the controversy."   R. 4:32-1(b)(3).

    Guided by that pronouncement, we turn to the facts at hand.

Plaintiffs defined the proposed class in their complaint as:

         "All persons currently insured or previously
         insured by [NJM], Palisades . . . at any
         time during the six (6) year period from the
         date of filing of this lawsuit who presented
         UM/UIM, physical damage claims for their
         insured vehicles arising from vehicular
         collisions or other accidental losses and
         were denied coverage or compensation, or did
         not    otherwise    receive    coverage    or
         compensation, for diminution of value of
         their vehicles in response to these claims."

    The questions of law or fact common to all members are

alleged as:

         (a) Whether     [defendants]   have    issued
         automobile insurance policies that expressly
         prohibit class members from recovering for
         diminution   of   value  of  their   vehicles
         arising from third-party UM/UIM vehicular
         collisions or other accidental losses;

         (b) Whether [defendants] have issued . . .
         policies that are ambiguous or silent with
         regard to [diminution of value coverage]
         . . . arising from third-party UM/UIM
         vehicular collisions or other accidental
         losses;

         (c) Whether    [defendants]   .  .   .   have
         improperly     denied    compensation     for
         diminution of value in response to third-
         party UM/UIM physical damage claims . . . ;

         (d) Whether [defendants] have engaged in a
         pattern or practice of failing to pay for
         diminution of value;

                               24                         A-4398-13T4
           (e) Whether    [defendants]   breached,   and
           continue   to   breach,   their   contractual
           obligations by not, inter alia, paying for
           diminution of value claims.

    The    foundation       of   these   allegations          is   breach    of    each

plaintiff's      respective      insurance       contract.           Although,         as

plaintiffs    suggest,      insurance     contract       interpretation           is    a

"[p]urely legal question," Badiali v. N.J. Mfrs. Ins. Group, 220
N.J. 544, 555 (2015), that alone will not permit these matters

to proceed as a class action.                 The significant legal conflict

centers on the terms of each insurance contract.                            Here, the

contracts of the actual and presumed putative plaintiffs are not

identical.

    There is no statutory or other regulatory directive which

mandates the use of a standard form of automobile liability

policy.   Automobile policy provisions, although reviewed by the

DOBI,   remain     individualized     between      an    insurer     and     insured.

Accordingly, there is no common provision directed to payment of

diminution    of    value   damages      payable    as    a    result   of     UM/UIM

claims.    The lack of uniformity in such contract coverage is

easily illustrated by the two named defendant-insurers, whose

respective policies contain divergent provisions governing such

claims.

    Thus, an inquiry into the breach of such contracts may be

as varied as the number of insurers that issue policies and the

                                         25                                   A-4398-13T4
vehicles    those    policies   cover.         Even        when   policies      include

similar provisions, such as the UM/UIM provisions in the NJM

plaintiffs' policies, the facts and circumstances surrounding

the claim and an insured's compliance with the policy terms to

submit claims remains unique.

    Typicality        among     defendants        to        the     putative       class

allegations   is    also   absent.       NJM    acknowledged          diminution       of

value   damages     were   included   within      the       scope    of   the    stated

coverage,5 and the NJM plaintiffs' claims were not denied, just

not paid because they lacked sufficient proof to support the

underlying basis for the amount sought.                       On the other hand,

Palisades   argued    Todisco    never     filed       a    claim    asserting      such

coverage, and if he had, that coverage dispute was subject to

mandatory arbitration (an issue we separately analyze below).

    The     individualized       facts      and        circumstances         of       the

relationship between each insurer and its insured also precludes

predominance.       R. 4:32-1(b)(3) (stating the class certification

5
     The record contains a form of NJM policy but not
plaintiffs' actual policies.     We have identified the UM/UIM
provision cited to govern plaintiff's claims.    We also observe
Part D of this document, entitled "COVERAGE FOR DAMAGE TO YOUR
AUTO," generally outlines the available coverage for, and
limitations on liability to, payments for vehicle damage. Under
a subsection entitled "EXCLUSIONS," the form policy expressly
states "We will not pay for . . . Loss to your covered auto . .
. due to diminution in value."    Because no party has discussed
the impact, if any, of this clause upon the UM/UIM claim, we
will not undertake such consideration.

                                      26                                        A-4398-13T4
is appropriate when the court finds the questions of law or fact

common to the class predominate over any questions affecting

only individual members).            We recognize predominance does not

require "all issues be identical among class members or that

each class member be affected in precisely the same manner."

Local No. 68 Welfare Fund, supra, 192 N.J. at 383 (citing Fiore

v. Hudson Cnty. Employees Pension Comm'n, 151 N.J. Super. 524,

528 (App. Div. 1977)).           However, the individualized nature of

the     parties'      automobile      insurance        contracts           and        the

circumstances      giving     rise   to     their    respective       claims          for

reimbursement predominates over possible common questions among

class members.        Moreover, contrary to plaintiffs' suggestion,

the   insurance    contracts     between     the    different    plaintiffs           and

their    respective     insurers     were     not     substantially         similar.

Therefore,   neither     the    commonality        requirement       of    R.      4:32-

1(a)(2) nor the predominance provision of R. 4:43-1(b)(3) were

satisfied.

      Plaintiffs      also    urge    "the     trial       court's    unsolicited

elimination of the putative class denied . . . the 'main thrust

of the litigation' because the cost of litigating each claim

individually      outweighs    the   amount    of    the    claim."       See    Riley,

supra, 61 N.J. at 221.         We have defined the principle this way:

           Class      actions are generally appropriate
           where      individual plaintiffs have "small

                                       27                                       A-4398-13T4
             claims" which "are, in isolation, too small
             . . . to warrant recourse to litigation
             . . . ."    Iliadis, supra, 191 N.J. at 104
             (internal quotation marks omitted). In such
             instances,     "the     class-action    device
             equalizes    the    claimants'    ability    to
             zealously advocate their positions."      Ibid.
             That equalization principle remedies the
             incentive problem facing litigants who seek
             only a small recovery. "In short, the class
             action's equalization function opens the
             courthouse doors for those who cannot enter
             alone." Ibid.

             [Local Baking Prods., supra, 421 N.J. Super.
             at 280 (alteration in original).]

     Here, the damage claims asserted by the NJM plaintiffs' are

not nominal.        Myska's claim of $14,399 approaches the maximum

Special Civil Part $15,000 cognizable limit, R. 6:1-2(a)(5), and

Wagner's     claim     of    $17,524        clearly       exceeds    that     amount.

Certainly such demands are neither "too small . . . to warrant

recourse to litigation" nor so insignificant to preclude legal

representation forcing plaintiff to enter the courthouse alone.

Iliadis,     supra,    191     N.J.    at        104   (alteration   in     original)

(citation and internal quotation marks omitted).                      We reject as

unfounded the suggestion that the size of the claims proffered

by   Myska    and     Wagner    made    remedies         illusory    because     each

"individual loss [was] too small to warrant a suit."                         Muhammad

v. Cnty. Bank of Rehoboth Beach, Del., 189 N.J. 1, 16 (2006).

     Following our review, we find the motion judge's analysis

of plaintiffs' allegations as individual to each plaintiff, such

                                            28                               A-4398-13T4
that    the     factual      basis    for     each    claim        was     dependent        on    a

specific individual experience and not common to the claims of

the    other       plaintiffs,       is     supported        by     the        record.         This

separateness of each claim precludes class certification.                                      Our

review confirms the record supports the judge's findings and his

conclusion to deny class certification to the parties' distinct

claims    for      damages    resulting       from    separate          accidents        covered

under their individualized policies.                         Further, the amount of

damages       at    issue    for     each    claim      is        not     so     small    as     to

disincentivize suit.

                                              2.

       Related to this issue is plaintiffs' attack on the scope of

documents reviewed by the court in performing its analysis of

the    class       certification      issue.         Plaintiffs           argue     the     judge

erroneously         considered       documents       outside       the     complaint.            We

reject this contention as meritless.

       In its review, a court may consider documents specifically

referenced in the complaint "without converting the motion into

one for summary judgment."                E. Dickerson & Son, Inc. v. Ernst &

Young,    LLP,      361   N.J.     Super.     362,    365     n.1       (App.     Div.    2003),

aff’d, 179 N.J. 500 (2004).                 "In evaluating motions to dismiss,

courts consider 'allegations in the complaint, exhibits attached

to the complaint, matters of public record, and documents that

                                              29                                         A-4398-13T4
form the basis of a claim.'"              Banco Popular N. Am. v. Gandi, 184
N.J. 161, 183 (2005) (quoting Lum v. Bank of Am., 361 F.3d 217,

222 n.3 (3d Cir.), cert. denied, 543 U.S. 918, 125 S. Ct. 271,

160    L.   Ed.    2d   203    (2004)).         "It   is   the    existence       of    the

fundament     of    a   cause    of   action     in   those      documents       that    is

pivotal; the ability of the plaintiff to prove its allegations

is not at issue."        Ibid.

       Here, in addition to examining the complaint, the judge

considered the insurance policies, correspondence from NJM and

Palisade's purportedly denying the diminution of value claims,

which attached the CC reports presented by Myska and Wagner.

Although     the   complaint      does    not    describe        those   documents       in

detail, its provisions certainly reference them, and we find no

error in the judge's review when determining the motions.                               See

Rapaport v. Robin S. Weingast & Assocs., 859 F. Supp. 2d 706,

714 (D.N.J. 2012) ("[W]hen allegations contained in a complaint

are    contradicted       by    the   document        it    cites,       the     document

controls." (citation and internal quotation marks omitted)).

       We also reject as unavailing plaintiffs' suggestions the

judge,      when   reviewing     these    additional       documents,          improperly

drew     inferences      favoring        NJM    and    Palisades,        rather        than

indulgently granting all favorable inferences to them.                              Thus,

plaintiffs argue he improperly resolved key factual disputes,

                                           30                                    A-4398-13T4
such as whether plaintiffs submitted claims for diminution of

value and whether defendants denied those claims, in favor of

NJM and Palisades.

    We reject this argument, as the language in the documents

is clear and not susceptible to more than one interpretation.

NJM's   correspondence,     after   considering   the   NJM   plaintiffs'

respective demands, stated payment would not be issued "at this

time"   and   specified     additional   documentation    required     for

further review and consideration.        Todisco's letter to Palisades

did not articulate the nature or amount of his purported loss.

                                    3.

    Plaintiffs next contend the trial court took sua sponte

action and violated their rights of due process by striking

their class claims without proper notice.         We are not persuaded.

    "[D]ue process requires an opportunity to be heard at a

meaningful time and in a meaningful manner."         Doe v. Poritz, 142
N.J. 1, 106 (1995).       As plaintiffs point out, courts must guard

against sua sponte action or "resort[ing] to a 'shortcut' for

the purposes of 'good administration' and circumvent[ing] the

basic requirements of notice and an opportunity to be heard."

Klier v. Sordoni Skansa Constr. Co., 337 N.J. Super. 76, 84-85

(App. Div. 2001).     See Curzi v. Raub, 415 N.J. Super. 1, 25-26,

28 (App. Div. 2010).

                                    31                           A-4398-13T4
       Here, in addition to seeking dismissal for failure to state

a     claim,   NJM     sought   dismissal       of   the      complaint's      class

allegations and demands for "[c]ertification of this action as a

class pursuant to [Rule] 4:32."                Specifically, NJM argued the

NJM plaintiffs' complaint presented no actionable allegations

because their claims had not been denied, but rather unpaid

pending further support.          Palisades maintained Todisco had not

submitted a claim.           Alternatively, NJM requested the immediate

severance of any surviving claims by Myska and Wagner.                            The

notice of motion and the supporting pleadings placed plaintiffs

on notice their assertions of class certification were attacked

as     improper      and   unwarranted.         We     find    no   due     process

deprivations.

                                       D.

       Plaintiffs assert the judge erred in concluding the CFA did

not apply to the denial of insurance claims, arguing he failed

to    recognize      their    claims   alleged       unconscionable       business

practices, which are cognizable under the CFA.                 We disagree.

       "The language of the CFA evinces a clear legislative intent

that its provisions be applied broadly in order to accomplish

its    remedial   purpose,      namely,   to    root    out    consumer     fraud."

Lemelledo v. Benefit Mgmt. Corp., 150 N.J. 255, 264 (1997).

"Accordingly, our courts have invoked it to cover a wide variety

                                       32                                   A-4398-13T4
of   practices."      Ibid.      In     Lemelledo,   the    Court   considered

whether the CFA applies to commercial lenders who increase the

principal amount of a loan by adding loan-related services, such

as credit insurance, that the borrowers may not want.                    Id. at

259-60.     In discussing the CFA's application, the Court stated

"although several lower courts have held that the payment of

insurance benefits is not subject to the CFA, our reading of the

CFA convinces us that the statute's language is ample enough to

encompass the sale of insurance policies as goods and services

that are marketed to consumers."               Id. at 265 (citations and

footnote omitted).      Accordingly, the CFA was held applicable to

insurance sales practices.        Id. at 266.

      "To prevail on a CFA claim, a plaintiff must establish

three     elements:   '1)   unlawful      conduct    by    defendant;    2)    an

ascertainable loss by plaintiff; and 3) a causal relationship

between    the   unlawful     conduct    and   the   ascertainable      loss.'"

Zaman v. Felton, 219 N.J. 199, 222 (2014) (quoting Bosland v.

Warnock Dodge, Inc., 197 N.J. 543, 557 (2009)).                Under the CFA

an "unlawful practice" is defined to include

            unconscionable      commercial      practice,
            deception, fraud, false pretense, false
            promise, misrepresentation, or the knowing,
            concealment, suppression, or omission of any
            material fact with intent that others rely
            upon   such   concealment,   suppression   or
            omission, in connection with the sale or
            advertisement of any merchandise or real

                                        33                              A-4398-13T4
            estate, or with the subsequent performance
            of such person as aforesaid, whether or not
            any person has in fact been misled, deceived
            or damaged thereby.

            [N.J.S.A. 56:8-2.]

    Further, "[t]he Legislature included 'services' within the

definition    of    'merchandise,'            a     term    that       encompasses         'any

objects,     wares,     goods,         commodities,         services          or    anything

offered,    directly       or    indirectly         to     the   public       for    sale.'"

D'Agostino    v.    Maldonado,         216 N.J. 168,    187    (2013)      (quoting

N.J.S.A. 56:8-1(c)).            Thus, although the CFA must be interpreted

"'broadly to protect consumers from a wide variety of abhorrent

deceptive    practices,'          it    has        meaningful       limits."            Ibid.

(quoting    Lee    v.   First     Union      Nat'l       Bank,    199 N.J. 251,    258

(2009)).

    While, we agree Lemelledo authorizes pursuit of a private

right of action against an insurance company for "fraudulent,

deceptive    or    other    similar          kind    of    selling       or    advertising

practices," Daaleman v. Elizabethtown Gas Co., 77 N.J. 267, 271

(1978), there are limits on the statute's application.                                     For

example, the CFA is not appropriate where a regulatory scheme

"deal[s]    specifically,         concretely,         and       pervasively        with    [a]

particular    activity,         implying       a     legislative        intent       not     to

subject parties to multiple regulations that, as applied, will

work at cross-purposes."               Lemelledo, supra, 150 N.J. at 270.

                                             34                                      A-4398-13T4
Further,    while   the     CFA    "encompass[es]        the   sale    of   insurance

policies as goods and services that are marketed to consumers,"

it was not intended as a vehicle to recover damages for an

insurance company's refusal to pay benefits. Id. at 265.                             See

Nikiper v. Motor Club of Am. Cos., 232 N.J. Super. 393, 400-01

(App. Div.), certif. denied, 117 N.J. 139 (1989); In re Van

Holt, 163 F.3d 161, 168 (3d Cir. 1998) ("The mere denial of

insurance benefits to which the plaintiffs believe[] they [are]

entitled    does     not      comprise         an   unconscionable          commercial

practice.").

      The    NJM    plaintiffs          assert      no     facts      alleging       NJM

fraudulently procured their agreement for coverage.                          In fact,

the   availability    of     coverage     under     the    policy     purchased      was

conceded.        Therefore,       the   essence     of    plaintiffs'       causes   of

action involve whether they filed and supported a claim for a

specified amount of benefits under their respective policies —

issues which fall outside the scope of the CFA.                       Kuhnel v. CNA

Ins. Cos., 322 N.J. Super. 568, 582 (App. Div. 1999), certif.

denied, 163 N.J. 12, cert. denied, 531 U.S. 819, 121 S. Ct. 61,

148 L. Ed. 2d 27 (2000)            See also Pierzga v. Ohio Cas. Group of

Ins. Cos., 208 N.J. Super. 40, 47 (App. Div.), ("[T]he insurance

industry    is   already     heavily     regulated        by   the    Department     of

Insurance[,       making]     exclusive         regulatory      jurisdiction         of

                                          35                                  A-4398-13T4
insurance companies, at least with respect to the payment of

claims, . . . within the Department of Insurance."), certif.

denied, 104 N.J. 399 (1986).

       We are not persuaded by plaintiffs' reliance on Weiss v.

First Unum Life Insurance Company, 482 F.3d 254 (3d Cir. 2007).

In   that     matter,     the    plaintiff's     suit   claimed    the   defendant

discontinued payment of his disability benefits as part of a

racketeering scheme involving an intentional and illegal policy

of rejecting expensive payouts to disabled insureds.                       Id. at

256.    After review, the court reinstated the plaintiff's claims

under   the    Racketeer        Influenced     and   Corrupt    Organizations   Act

(RICO), 18 U.S.C.A. §§ 1961-1968.               Id. at 269.      In its analysis,

the court examined whether the plaintiff's claim was covered by

the CFA, which could undercut a RICO suit.                        Id. at 265-66.

Noting it did "not share the District Court's conviction that

the CFA and its treble damages provision are inapplicable to

schemes to defraud insureds of their benefits," id. at 266, the

Third Circuit concluded "[t]he CFA covers fraud both in the

initial sale (where the seller never intends to pay), and fraud

in the subsequent performance (where the seller at some point

elects not to fulfill its obligations)."                Ibid.

       We need not determine the soundness of this legal analysis

because     the   facts    in    Weiss   are    significantly     distinguishable

                                         36                               A-4398-13T4
from those at hand.         The court in Weiss found the CFA applied to

allegations       of      fraudulent      discontinuation         of     previously

authorized benefits.          The Court did not discuss the precedent we

have   cited,     which    excludes    determination       of    initial      coverage

disputes.       Nikiper,      supra,    232   N.J.   Super.      at    401;    Kuhnel,

supra, 322 N.J. Super. at 582.

       Myska and Wagner also maintain NJM's practice of failing to

disclose an insured's right to seek compensation for diminution

of value, not merely repair of their vehicles, fell within the

ambit of the CFA.         We disagree.

       "[A]n insured is chargeable with knowledge of the contents

of an insurance policy in the absence of fraud or inequitable

conduct on the part of the carrier."                   Edwards v. Prudential

Prop. & Cas. Co., 357 N.J. Super. 196, 204 (App. Div.), certif.

denied, 176 N.J. 278 (2003).              "Normally, insurance purchasers

are    expected   to   read    their    policies     and   the    law    may    fairly

impose upon [them] such restrictions, conditions and limitations

as the average insured would ascertain from such reading."                           Id.

at    204-205   (alteration      in    original)     (citations        and    internal

quotation marks omitted).             See also Millbrook Tax Fund, Inc. v.

Henry & Assocs., Inc., 344 N.J. Super. 49, 53 (App. Div. 2001)

("[A] policy holder is obligated to read the policy he receives

and is bound by the clear terms thereof").

                                         37                                    A-4398-13T4
                                       E.

      Our final consideration concerns the arbitration provision

contained within the Palisades policy.             Todisco argues the trial

court erred in dismissing his claims in their entirety in favor

of arbitral review.           Supplemental submissions filed by Todisco

rely on Atalese, which defines the necessary requirements of a

clause waiving one's right to sue in court, in favor of binding

parties to pursue arbitration.          Atalese, supra, 219 N.J. at 442-

44.   Atalese was decided after the trial court reviewed this

matter, so the judge did not have the benefit of the Court's

guidance.

      In Atalese, the Court emphasized an arbitration clause in a

contract must "assure that the parties know that in electing

arbitration    as   the   exclusive     remedy,    they   are     waiving   their

time-honored right to sue."            Id. at 444 (citation and internal

quotation marks omitted).          "By its very nature, an agreement to

arbitrate    involves     a   waiver   of   a   party's   right    to   have   her

claims and defenses litigated in court."              NAACP of Camden Cnty.

E. v. Foulke Mgmt. Corp., 421 N.J. Super. 404, 425 (App. Div.),

certif. granted, 209 N.J. 96 (2011), appeal dismissed, 213 N.J.
47 (2013).    The Court in Atalese has clarified the scope of this

requirement in the context of arbitration clauses contained in

consumer contracts.       Atalese, supra, 219 N.J. at 442-43.

                                       38                                A-4398-13T4
      "An agreement to arbitrate, like any other contract, 'must

be the product of mutual assent, as determined under customary

principles of contract law.'"           Id. at 442 (quoting NAACP, supra,

421 N.J. Super. at 424).            The mutual agreement must contain a

provision waiving the right to pursue judicial determination of

the   parties'      respective    rights     and       responsibilities.         Ibid.

This is because "an average member of the public may not know —

without      some   explanatory     comment        —    that    arbitration      is    a

substitute for the right to have one's claim adjudicated in a

court   of     law."     Ibid.      Therefore,         "'[a]n    effective      waiver

requires a party to have full knowledge of his [or her] legal

rights and intent to surrender those rights.'"                   Ibid.     (quoting

Knorr     v.    Smeal,   178 N.J. 169,   177        (2003)).       The     Court

emphasized:

               Our jurisprudence has stressed that when a
               contract contains a waiver of rights —
               whether in an arbitration or other clause —
               the waiver must be clearly and unmistakably
               established.    Thus, a clause depriving a
               citizen of access to the courts should
               clearly   state   its  purpose.    We  have
               repeatedly stated that [t]he point is to
               assure that the parties know that in
               electing   arbitration   as   the exclusive
               remedy, they are waiving their time-honored
               right to sue.

               [Atalese, supra, 219 N.J. at 444 (alteration
               in   original)   (citations   and   internal
               quotation marks omitted).]

                                        39                                     A-4398-13T4
    We recite the entirety of the arbitration provision in the

Palisades policy, found in Part E:

           If we and an insured do not agree whether
           that person is legally entitled to recover
           damages under this Part; or as to the amount
           of damages; either party may make a written
           demand for arbitration. In this event, each
           party will select an arbitrator.     The two
           arbitrators will select a third.     If they
           cannot agree within 30 days, either may
           request that selection be made by a judge of
           a court having jurisdiction.

           Each party will pay the expenses it incurs
           and   bear   the  expenses of   the  third
           arbitrator equally.

           Unless   both    parties   agree   otherwise,
           arbitration will take place in the county in
           which the named insured lives.    Local rules
           of law as to procedure and evidence will
           apply.        A decision agreed to by two of
           the three arbitrators will be binding as to:

                1. Whether the insured is legally
                entitled to recover damages; and

                2. The amount of damages.

           The decision is binding only if the amount
           does not exceed the minimum limit for
           liability   specified   by    the financial
           responsibility law of New Jersey.    If the
           amount exceeds that limit, either party may
           demand the right to a trial for all issues
           of liability and damages. . . .

    It is clear, the Palisades contract fails Atalese's basic

test.   The language does not identify the insured's clear and

unmistakable    waiver   of   the   right    to    seek   determination   of

disputes   in   a   judicial    forum       when   choosing   arbitration.

                                    40                             A-4398-13T4
Atalese, supra, 219 N.J. at 444.                        Accordingly, the arbitration

provision in the Palisades contract is unclear and ambiguous,

and,    therefore,         unenforceable.                   Id.    at     448.          See     also

Dispenziere v. Kushner Cos., 438 N.J. Super. 11, 20 (App. Div.

2014) (invalidating an arbitration provision because it "failed

to provide [the] plaintiffs any notice that they were giving up

their right to seek relief in a judicial forum").

       Despite       the   flaws     of     the       Palisades         arbitration       clause,

however,    Todisco's          action     is     not        saved.       As    noted,     Todisco

produced no evidence he submitted a claim demanding payment for

diminution      of     value     damages.             His    February       15,   2013        letter

contains no facts or monetary calculation.                              Further, Todisco did

not    comply    with      the     subsequent          requests       for      proof    of     loss,

required by the claims provisions within Part F of his policy.

Therefore,       his       claims     for        breach       of      contract         cannot    be

sustained.

                                               III.

       In   summary,        we     find     no        flaw    with      the     trial     judge's

determination         to    deny    class        certification            or    the     procedure

employed in that examination.                         We conclude the CFA does not

apply to the dispute regarding payment or scope of coverage.

Finally,     although        we     find       the      arbitration            clause     in    the

Palisades       policy      is    unenforceable,              we     nevertheless        conclude

                                                 41                                       A-4398-13T4
dismissal of Todisco's complaint was warranted based upon his

noncompliance with the unambiguous claims procedure.

    Affirmed, as modified.

                               42                      A-4398-13T4