(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Argued November 7, 1994 -- Decided January 18, 1995
GARIBALDI, J., writing for a unanimous Court.
On January 15, 1989, Chris Vassas was involved in an automobile accident with a vehicle driven by
Andre Vold. Vold was insured under a policy issued by Allstate Insurance Company, providing the statutory
minimum liability limits of $15,000/$30,000. Vassas was insured by Rutgers Casualty Insurance Company
(Rutgers). That policy included an endorsement for underinsured motorist (UIM) coverage in the amounts
of $100,000/$300,000.
Vassas sued Vold for the injuries he sustained in the accident. That suit proceeded to mandatory
arbitration. Vassas accepted the arbitration award of $15,000 plus interest, which was Vold's policy limit, and
confirmed the award as required by Court Rule. Judgment was entered on October 2, 1990. Vassas then
filed a warrant of satisfaction of that judgment on October 15, 1990.
On January 8, 1992, Vassas asserted, for the first time, a claim against Rutgers for UIM benefits.
Although Vassas had notified Rutgers of the collision damage to his car, he had never informed the insurer
of his personal injuries, his lawsuit against Vold, the arbitration award, his acceptance of that award, the
entry of judgment, and the issuance of a warrant of satisfaction.
Rutgers filed this declaratory judgment action, seeking to deny coverage. Rutgers argued that
Vassas' confirmation of the arbitration award, entry of judgment, and issuance of the warrant of satisfaction
destroyed its subrogation rights against Vold, the tortfeasor. The trial court, on cross-motions for summary
judgment, dismissed the declaratory judgment action and ordered Rutgers to enter into arbitration with
Vassas regarding his UIM claim. The trial court held that only the issuance of a general release, as opposed
to a warrant of satisfaction of judgment, would destroy a UIM insurer's subrogation rights against the third-party tortfeasor, and that the confirmation of an arbitration award does not preclude a UIM insurer from
filing a subrogation claim.
Rutgers moved for reconsideration of that decision, arguing that because Vassas delayed in seeking
UIM benefits, the two-year statute of limitations on the underlying action had already run, thereby
preventing Rutgers from instituting a subrogation suit against Vold. The trial court denied the motion,
finding that Rutgers had failed to make that argument earlier. In any event, the court also held that the
statute of limitations had not begun to run until the arbitrator had determined the amount of the arbitration
award.
The Appellate Division reversed, concluding that the motion to confirm an arbitration award, the
entry of judgment, and the execution of the warrant of satisfaction in favor of Vold had the same preclusive
effect against the UIM insurer as did the issuance of a general release. The court did not address the
statute-of-limitations argument.
The Supreme Court granted Vassas' petition for certification and Rutgers' cross-petition.
HELD: An insured who receives an arbitration award, enters judgment on that award, and issues a warrant of satisfaction of that judgment - all without notice to his or her underinsured motorist (UIM) carrier - may not subsequently assert a claim against that UIM carrier for UIM benefits.
In addition, the Court adopts the procedures set forth by the Appellate Division in Longworth v.
Van Houten for insureds and insurers to follow when making UIM claims.
1. According to the insurance contract between Vassas and Rutgers, Vassas was under a contractual
duty to: 1) notify Rutgers promptly of how, when, and where the accident had occurred; 2) cooperate with
Rutgers in defense or prosecution of any action by or against Vold; 3) to forward to Rutgers any "legal
papers" filed or received in connection with any litigation arising from the accident; and 4) preserve and not
prejudice Rutgers' rights to recover any payments made under the policy in a subrogation action. (pp. 4-6)
2. In this case, Vassas did not inform Rutgers of his personal injury lawsuit against Vold, the
arbitration award, its acceptance, the reduction of the award to judgment, and the execution of the warrant
of satisfaction until January 8, 1992, three years after the accident had occurred and fifteen months after the
trial court had entered judgment based on the arbitration award. This delay constituted a breach of the
duties imposed by the insurance contract. Furthermore, because the limitations period for a subrogation
action begins to run at the same time as the limitations period for the underlying action, Rutgers' cause of
action against Vold accrued at the time of the accident and expired on January 15, 1991. By failing to notify
Rutgers of the suit, Vassas unfairly prejudiced Rutgers' subrogation rights against Vold in violation of the
requirements of his insurance policy. That failure to comply with the provisions of the contract are sufficient
to bar Vassas' UIM claim against Rutgers. (pp. 6-8)
3. The Court adopts the procedures set forth in Longworth v. Van Houten because those procedures
serve the legislative purpose of protecting insureds from financially irresponsible motorists while protecting
the subrogation rights of insurers. Thus, when an insured covered by an automobile-insurance policy
providing UIM benefits is involved in an accident and sues the tortfeasor, the insured must notify the UIM
carrier of that action. If, during the pendency of the claim, the tortfeasor's insurance coverage is insufficient
to satisfy the insured's damages, then the insured should promptly notify his or her UIM carrier. If the
insured receives a settlement offer or arbitration award that does not completely satisfy the claim because
the tortfeasor is underinsured, the UIM insurer then has two options: to pay the insured the amount of the
third-party tortfeasor's settlement offer or the arbitration award in exchange for subrogation of the insured's
right against the tortfeasor; or, allow the insured to settle. While promptness ultimately is to be decided by
the circumstances, thirty days is to be considered the presumptive time period if the insured notices his or
her carrier prior to assignment of a trial date. If the insured does not receive a response from his or her
insurance carrier, he or she may seek an immediate declaratory ruling from the trial court on order to show
cause. Furthermore, UIM carriers may choose to honor demands from their insureds to proceed to
arbitration of the UIM claim prior to disposition of the claim against the tortfeasor. (pp. 9-11)
4. The thirty-day notice requirement is a presumptive one and may be extended by the court in
extraordinary circumstances. Such extensions are to be granted sparingly and guided by the same principles
relied on in granting relief from an order or judgment under Rule 4:50-1. Requiring insured victims to
advise their UIM carriers promptly of their personal-injury lawsuits will lessen the burden of the time
constraints imposed by Longworth. (pp. 11-15)
5. Vassas' failure to comply with the provisions of his insurance contract by waiting three years before
notifying Rutgers of his personal-injury-lawsuit and award, as well as the dictates of Longworth, bar Vassas'
action to recover UIM benefits from Rutgers. (p. 15)
Judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN and STEIN join in
JUSTICE GARIBALDI's opinion. JUSTICE COLEMAN did not participate.
Supreme Court of New Jersey
A-43/
44 September Term 1994
RUTGERS CASUALTY INSURANCE COMPANY,
Plaintiff-Respondent
and Cross-Appellant,
v.
CHRIS VASSAS,
Defendant-Appellant
and Cross-Respondent.
Argued November 7, 1994 -- Decided January 18, 1995
On certification to the Superior Court,
Appellate Division.
Steven L. Kessel argued the cause for
appellant and cross-respondent (Drazin and
Warshaw, attorneys).
Susan L. Moreinis argued the cause for
respondent and cross-appellant.
The opinion of the Court was delivered by
GARIBALDI, J.
This appeal raises several questions concerning underinsured
motorist (UIM) coverage. We consider whether an insured who
receives an arbitration award from his tortfeasor, moves to
confirm that award, enters judgment on that award, and issues a
warrant of satisfaction of that judgment--all without notice to
his UIM insurer--may subsequently assert a claim against his UIM
carrier for UIM benefits. We also consider the procedure set
forth in Longworth v. Van Houten,
223 N.J. Super. 174 (App. Div.
1988), addressing the competing interests of insureds and
insurers, in respect of the insured's third-party claim, the
insurer's subrogation rights, and the resolution of the UIM
claim.
Shortly after their collision, Vassas filed suit against Vold for personal injuries sustained in the accident. Vassas's suit against Vold proceeded to mandatory arbitration pursuant to Rule 4:21A-1(a)(1). Vassas accepted the arbitration award of $15,000 plus interest, Vold's policy limit, and confirmed the award, as required by Rule 4:21A-6(b)(3). Judgment was entered on October 2, 1990, whereupon Vassas filed a warrant of satisfaction of that judgment on October 15, 1990, and received Vold's policy limit of $15,000.
On January 8, 1992, Vassas asserted, for the first time, a claim against Rutgers for UIM benefits. The claim letter makes reference to an earlier demand upon Rutgers for UIM coverage arising out of this accident, but no evidence of that asserted prior demand exists. Although soon after the accident Vassas did
notify Rutgers of the collision damage to his car, he never
notified it of his personal injuries, his suit against Vold, the
arbitration award, his acceptance of that award, the entry of
judgment, and the issuance of a warrant of satisfaction.
Rutgers immediately filed this suit for declaratory judgment
to deny Vassas coverage. Rutgers argued that Vassas's
confirmation of the arbitration award, entry of judgment, and
issuance of the warrant of satisfaction destroyed its subrogation
rights against the tortfeasor, Vold. The trial court, on cross-motions for summary judgment, granted Vassas's motion and denied
Rutgers's motion. The court dismissed Rutgers's complaint and
ordered it to enter into arbitration with Vassas regarding his
UIM claim. The court held that only the issuance of a general
release, as opposed to a warrant of satisfaction of judgment,
would destroy a UIM insurer's subrogation rights against the
tortfeasor, and that the confirmation of an arbitration award
does not preclude a UIM insurer from filing a subrogation claim
against the tortfeasor.
Rutgers filed a motion for reconsideration under Rule 4:49-2, arguing that because Vassas delayed in seeking UIM benefits,
the two-year statute of limitations on the underlying tort had
already run, which prevented Rutgers from instituting action
against the tortfeasor. The trial court denied Rutgers's motion,
asserting that Rutgers had no excuse for its failure to make the
statute-of-limitations argument earlier. Moreover, the trial
court held that, in any event, the statute of limitations had not
commenced running until the arbitrator had set the amount of the
arbitration award.
Rutgers appealed to the Appellate Division, which reversed
the Law Division in an unreported opinion. The appellate panel
held that the motion to confirm an arbitration award, the entry
of judgment, and the execution of the warrant of satisfaction in
favor of the underinsured tortfeasor, Vold, had the same
preclusive effect against the UIM insurer, Rutgers, as did the
issuance of a general release. Because the Appellate Division
reversed the trial court on this point, it declined to address
Rutgers' statute-of-limitations argument. Vassas moved for
reconsideration, and the Appellate Division issued a supplemental
opinion reaffirming its earlier determination.
Vassas filed a petition for certification to this Court, and
Rutgers filed a cross-petition. We granted both petitions. 137
N.J. l65 (1994).
In 1983, the Legislature, concerned that victims of automobile accidents were placed at risk not only by uninsured drivers but also by underinsured drivers, introduced legislation providing for UIM coverage. The Legislature enacted N.J.S.A. 17:28-1.1(e)(1), which states, in part:
A motor vehicle is underinsured when the sum of the limits of liability under all bodily injury and property damage liability bonds and insurance policies available to a person against whom recovery is sought for bodily injury or property damage is, at the time of the accident, less than the applicable limits for underinsured motorist coverage afforded
under the motor vehicle insurance policy held
by the person seeking that recovery. A motor
vehicle shall not be considered an
underinsured motor vehicle under this section
unless the limits of all bodily injury
liability insurance or bonds applicable at
the time of the accident have been exhausted
by payment of settlements or judgments. The
limits of underinsured motorist coverage
available to an injured person shall be
reduced by the amount he has recovered under
all bodily injury liability insurance or
bonds.
Although the Legislature made uninsured motorist (UM) coverage
mandatory, it determined that insurers only need offer UIM
coverage to each motorist; purchase of this additional protection
is optional. The purchase of UIM coverage is "a matter of
contractual agreement." Longworth, supra, 223 N.J. Super. at
178.
Vassas's insurance policy with Rutgers contained the
following pertinent provisions:
PART E - DUTIES AFTER AN ACCIDENT OR LOSS
We [Rutgers] have no duty to provide coverage under
this policy unless there has been full compliance with
the following duties:
A. We must be notified promptly of how, when and
where the accident or loss happened. Notice
should also include the names and addresses
of any injured persons and any witnesses.
B. A person seeking coverage must:
1. Cooperate with us in the
investigation, settlement or
defense of any claim or suit.
2. Promptly send us copies of any
notices or legal papers received in
connection with the accident or
loss.
. . . .
C. A person seeking Uninsured Motorist Coverage
must also:
. . . .
2. Promptly send us copies of the
legal papers if a suit is brought.
. . . .
PART F - GENERAL PROVISIONS
OUR RIGHT TO RECOVER PAYMENT
A. If we make a payment under this policy and
the person to or for whom payment was made
has a right to recover damages from another
we shall be subrogated to that right. That
person shall do:
1. Whatever is necessary to enable us
to exercise our rights; and
2. Nothing after loss to prejudice
them.
Vassas was under a contractual duty to notify Rutgers promptly of how, when, and where the accident had occurred. He had a duty to cooperate with Rutgers in defense or prosecution of any action by or against the tortfeasor. Vassas was further required to forward to Rutgers any "legal papers" filed or received in connection with any litigation arising from the accident. Finally, he was under an obligation to preserve and not prejudice Rutgers's rights to recover any payments made under the policy in a subrogation action. Nevertheless, Vassas did not inform Rutgers of his personal-injury suit against Vold, the arbitration award, his acceptance of the award, the reduction of the award to judgment, and his execution of the warrant of satisfaction to Vold, until January 8, 1992, when he filed his demand for UIM coverage. That date was approximately three years after the accident had occurred and fifteen months after the trial court had entered judgment based on the arbitration award.
His delay in reporting those events constituted a breach of the
duties imposed by the insurance contract.
More important, Vassas did not advise Rutgers of any of the
aforementioned acts until three years after his accident.
Rutgers claims that Vassas's failure to advise it of his
personal-injury claim against Vold until three years after the
accident bars any subrogation claim against Vold under the two-year statute of limitations for personal injuries, N.J.S.A.
2A:14-2.
The limitations period for a subrogation action begins to
run at the same time as the limitations period for the underlying
action:
As the right of subrogation turns on the
obligation or duty that the third party
itself owes the subrogor, subrogation is
wholly dependent on the merits of the
subrogor's claim against the third party.
The subrogee, which succeeds to the position
of the subrogor, may recover only if the
subrogor likewise could have recovered; the
subrogee gains no additional rights and is
subject to all defenses that were available
against the subrogor. Courts therefore have
generally recognized that the cause of action
for subrogor and subrogee accrues at the same
time.
[Holloway v. State,
125 N.J. 386, 396 (1991)
(citations omitted).]
See also Craig & Pomeroy, New Jersey Auto Insurance Law, § 25:3, at 293-94, § 28:3, at 328-33 (1994) (discussing subrogation principles under both UM and UIM policies); Unsatisfied Claim & Judgment Fund v. Gonzalez, 227 N.J. Super. 609 (Law Div. 1988) (holding that two-year statute-of-limitations period under
N.J.S.A. 2A:14-2 for UCJF's subrogation action to recover
judgment entered against UCJF after automobile accident commenced
running at time of accident rather than when UCJF agreed to entry
of judgment against itself); Glass v. Spaits,
221 N.J. Super. 643
(Law Div. 1987) (holding that two-year statute-of-limitations
period under N.J.S.A. 2A:14-2 for workers' compensation insurer's
subrogation action commenced running at time of injury rather
than at time insurer paid benefits to claimant).
Since the causes of action for subrogor and subrogee accrue
at the same time, Rutgers's cause of action against Vold accrued
at the same time that Vassas's cause of action against Vold
accrued: the time of the accident. That accident occurred on
January 15, 1989. Pursuant to N.J.S.A. 2A:14-2, the two-year
limitations period for any suit against Vold, including a
subrogation claim by Rutgers, expired on January 15, 1991.
Rutgers, therefore, cannot file suit against Vold for any UIM
benefits that it might pay to Vassas.
Vassas knew at the time of his suit against Vold, or shortly
thereafter, that the claim for his injuries would exceed Vold's
coverage. Yet he waited nearly three years, without offering any
justification or excuse, to inform his UIM carrier of his
personal-injury suit and award against Vold. By so doing, Vassas
unfairly prejudiced Rutgers's subrogation right against Vold,
contrary to the requirements of his insurance policy. Vassas's
failure to comply with those contractual provisions are
sufficient to bar his UIM claim against Rutgers.
Nevertheless, we take this opportunity to address some of the difficulties that continue to arise with regard to the subrogation rights of a UIM carrier and the statutory requirement that a "motor vehicle shall not be considered an underinsured motor vehicle under this section unless the limits of all bodily injury liability insurance or bonds applicable at the time of the accident have been exhausted by payment of settlements or judgments." N.J.S.A. 17:28-1.1(e)(1).
We essentially adopt the procedure set forth in Longworth, supra, 223 N.J. Super. 174. In Longworth, Judge Pressler, in a detailed and well-reasoned analysis, reviewed and examined the then-existent state of the law with respect to UIM coverage and the obligations placed upon insurers and insureds by insurance contracts and the New Jersey auto-insurance scheme. The court concluded that the subrogation and consent-to-settle clauses of then-typical insurance contracts violated public policy because they impeded the Legislature's policy in providing for UIM coverage and because they impermissibly interfered with an insured's right to manage his or her litigation. Id. at 185.
The difficulty presented in Longworth was that the insurance contract's exhaustion, subrogation, and consent-to-settle clauses thrust insured victims of auto accidents into a contractual impasse that frustrated the intent and policy of the Legislature
in authorizing UIM coverage. 223 N.J. Super. at 184. Exhaustion
clauses required an insured to exhaust the tortfeasor's insurance
limits before making a claim on his own UIM carrier. Id. at 182.
For an insured whose damages exceeded his tortfeasor's insurance
coverage, exhaustion could most expeditiously be achieved by
settling with the tortfeasor for, or close to, the policy limits.
Id. at 183. However, the tortfeasor's insurer would usually
settle only upon the execution of a general release of liability.
Id. at 184. Yet under the insured's UIM policy, the insured
could not execute a general release without violating the
subrogation rights of the UIM carrier. Ibid. "Consequently, the
victim cannot simultaneously give a release to the tortfeasor and
protect his UIM insurer's right to subrogation." Ibid.
The panel in Longworth found that the consent-to-settle and
subrogation clauses combined to violate public policy. 223 N.J.
Super. at 185. Relying on the Minnesota Supreme Court's decision
in Schmidt v. Clothier,
338 N.W.2d 256 (1983), the Appellate
Division suggested a procedure for insureds and insurers to
follow when making UIM claims that would both serve the
Legislature's "purpose of providing maximum and expeditious
protection to the innocent victims of financially irresponsible
motorists," and protect the subrogation rights of insurers. The
court observed:
[A]s a matter of future conduct, an insured receiving
an acceptable settlement offer from the tortfeasor
should notify his UIM carrier. The carrier may then
promptly offer its insured that sum in exchange for
assignment to it by the insured of the claim against
the tortfeasor. While promptness is to be ultimately
decided by the circumstances, 30 days should be
regarded as the presumptive time period if the insured
notices his carrier prior to assignment of a trial
date. In any event, an insured who has not received a
response from his carrier and who is in doubt as to
whether acceptance of the tortfeasor's offer will
impair his UIM rights may seek an immediate declaratory
ruling from the trial court on order to show cause on
such notice as is consistent with the circumstances.
We further hold that UIM carriers may, if they choose,
honor demands from their insureds to proceed to
arbitration of the UIM claim prior to disposition of
the claim against the tortfeasor.
Under the auto-arbitration statute, N.J.S.A. 39:6A-24 to -35, and Rule 4:21A, either party has thirty days within which to reject the arbitration award, after which either party may move to confirm it, binding the other party, up to fifty days after the award is made; beyond fifty days, the court may dismiss the action. This period comports with that suggested by the Appellate Division in Longworth. 223 N.J. Super. 194. Vassas argues that that thirty-day notice requirement imposes an unfair burden on insureds, requiring them to notify their insurers of an arbitration award on the very same day they receive it. While we fail to perceive any injustice in that requirement, as a simple photocopy of the award letter would be sufficient to notify the insurer of the award, we are cognizant that that time constraint may make more difficult the parties' determination of what course of action to pursue. Particularly burdened are insurers, who must determine whether to offer their insureds the arbitrator's
award (which usually equals the tortfeasor's policy limit) in
exchange for the insured's subrogation right against the
tortfeasor. Depending upon the complexity of the case and the
caseload of the insurer, thirty days may be a constrictive time
period.
We note, however, that Longworth merely established thirty
days as a "presumptive time period" for notifying a UIM insurer
of a settlement offer, noting that "promptness is to be
ultimately determined by the circumstances." Ibid. Although the
thirty-day time period for rejection of the arbitration award and
demanding a trial de novo is statutorily mandated, it "is not
jurisdictional" and may be extended by the court in
"extraordinary circumstances." Mazakas v. Wray,
205 N.J. Super. 367, 370-71 (App. Div. 1985); see Sprowl v. Kitselman,
267 N.J.
Super. 602 (App. Div. 1993) (approving easier standard for
relaxation of fifty-day limit for confirmation of arbitration
award, to avoid dismissal); Gerzsenyi v. Richardson,
211 N.J.
Super. 213 (App. Div. 1986) (filing of motion for trial de novo
one business day late constituted "extraordinary circumstances"
justifying relaxation of thirty-day limit); DeRosa v. Donahue,
212 N.J. Super. 698 (Law Div. 1986) (holding that notice mailed
six days prior to expiration of thirty-day period but which
arrived two days after period expired due to postal delay
constituted "extraordinary circumstances" for relaxing time
limit).
Extraordinary circumstances can include a showing of the
unusual complexity of the case, with extensions guided by the
same principles relied upon in granting relief from an order or
judgment under Rule 4:50-1. Mazakas, supra, 205 N.J. Super. at
372. To comply with both the letter and spirit of the
arbitration statute and the court rules promulgated in conformity
thereto, we emphasize, however, that a trial court should
sparingly exercise its power to grant any such time extensions.
Ibid. We expect that cases requiring deviation from the time
limits would be rare. Moreover, requiring insured victims to
advise their UIM carriers promptly of their personal-injury suits
will ameliorate considerably the time constraints imposed by
Longworth.
As stated, we essentially endorse the Longworth procedure, and take note of its implementation by the insurance bar:
That the Longworth approach preserves everyone's best interests in the UIM context has been amply demonstrated by experience. The injured accident victim is afforded reasonably prompt means of obtaining full recovery. The liability insurer for the tortfeasor is afforded at least the opportunity to obtain for its insured a general release, thereby disposing of the claims against its insured in accordance with its good faith responsibilities in that regard. Finally, the UIM insurer is given the ability to exercise its subrogation rights in those situations where a subrogation action against the tortfeasor for reimbursement of UIM payments appears worth pursuing.
Thus, since the Longworth decision was first published in March of 1988, the approach it
suggests has been followed almost universally
by the bar and insurance industry.
[Craig & Pomeroy, supra, § 28:3, at 332].
Accordingly, when an insured under an automobile-insurance
policy providing UIM benefits is involved in an accident and
undertakes legal action against the tortfeasor, the insured must
notify the UIM insurer of that action. If, during the pendency
of the claim, the tortfeasor's insurance coverage proves
insufficient to satisfy the insured's damages, then the insured
should again notify the UIM insurer of that fact.
If the insured receives a settlement offer or arbitration
award that does not completely satisfy the claim, because the
tortfeasor is underinsured, the UIM insurer then has two options:
offer to pay the insured the amount of the tortfeasor's
settlement offer or the arbitration award, usually the
tortfeasor's policy limit, in exchange for subrogation of the
insured's rights against the tortfeasor; or, allow the insured to
settle. In either case, the UIM insurer must further allow the
insured the benefit of the UIM coverage. If the insurer does not
respond within the time allotted for rejection of the award or
settlement offer, the insured victim may, consistent with
Longworth, supra, move for a declaratory ruling on order to show
cause concerning the parties' rights and responsibilities. In
this manner, the insured victim is afforded the protection and
benefits of the tortfeasor's insurance coverage in addition to
the insured's own UIM coverage. As well, the UIM carrier is able
to weigh the relative merits of allowing its insured to settle
and paying the difference in UIM benefits compared with paying
its insured the settlement offer plus UIM benefits and itself
maintaining a subrogation action against the tortfeasor.
The Longworth procedure balances the interests of insureds
and insurers, injured victims and tortfeasors. It provides the
insured victim an opportunity both to assert liability against
the tortfeasor and to determine the liability of the UIM insurer.
In addition, it apprises the UIM insurer of pending litigation by
one of its insureds, which may obligate it to provide UIM
coverage under the insured's policy.
Vassas was injured in an automobile accident with Vold on January 15, 1989. Vassas filed suit against Vold for his personal injuries. In violation of the explicit requirement in his insurance policy, Vassas did not notify his insurer of the lawsuit. When Vassas was awarded damages from the mandatory auto-arbitration proceeding, he again failed to notify his insurer, contrary to the Appellate Division's holding in Longworth, supra, requiring such notification. Vassas waited almost three years before seeking UIM coverage, and thereby breached his contract and prejudiced Rutgers's subrogation rights, which expired with the running of the two year statute of limitations applicable to the underlying tort. Under those circumstances, Vassas's failure to comply with the provisions of his insurance contract and the dictates of Longworth bars his action to recover UIM benefits from Rutgers.
The judgment of the Appellate Division is affirmed.
Chief Justice Wilentz and Justices Handler, Pollock, O'Hern, and Stein join in this opinion. Justice Coleman did not participate.
NO. A-43/44 SEPTEMBER TERM 1994
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
RUTGERS CASUALTY INSURANCE COMPANY,
Plaintiff-Respondent
and Cross-Appellant,
v.
CHRIS VASSAS,
Defendant-Appellant
and Cross-Respondent.
DECIDED January 18, 1995
Chief Justice Wilentz PRESIDING
OPINION BY Justice Garibaldi
CONCURRING OPINION BY
DISSENTING OPINION BY