We have previously featured New Jersey District Court decisions addressing “unequivocal” denials in the context of policies’ suit limitation provisions. In the latest, Ryan v. Liberty Mut. Fire Ins. Co., No. 14-6308 (WHW)(CLW), 2017 U.S. Dist. LEXIS 6716, at *3 (D.N.J. Jan. 17, 2017), the Court found Liberty Mutual’s letter explaining both covered and excluded damages to constitute a “clear and unequivocal” denial.

In Ryan, the day after their home was damaged by Hurricane Sandy, the Ryans notified Liberty Mutual of a claim for the damage.  Liberty Mutual sent an independent adjuster to the property and determined that it owed the Ryans $4,784.14 for covered damages. Liberty Mutual explained the payment of policy benefits in a November 30, 2012 letter, which the Ryans received on December 10, 2012. The letter explained that Liberty Mutual would not be issuing payment for damage to a living room wall because the Ryans had been paid for damage to the wall after a previous storm, and the inspection showed that they had not repaired the damage. The letter also stated that no coverage was available for flood-related damages. 

In addition to providing information about Liberty Mutual’s internal appeals process, the letter invited the Ryans to contact Liberty Mutual if they had questions or wished to submit additional information for reconsideration. Although the Ryans reached out to Liberty Mutual on a handful of occasions after receiving the letter, they never submitted additional documentation. They filed suit against Liberty Mutual on October 10, 2014.

Liberty Mutual moved for summary judgment, claiming the Plaintiffs’ claims were time-barred because they failed to file suit within one year of receiving the denial, as required by the policy. Granting the motion, the court concluded that Liberty Mutual’s “unequivocal denial” letter started the running of the policy’s one year suit limitation. Among the letter’s strengths, the court noted that it was “clear and direct” in its denial of benefits, stating “[w]e regret to inform you that the damage to your home . . . cannot be paid for at this time as your policy does not afford coverage for water damage related to flood.”

Rejecting each of Plaintiffs’ arguments, the court found no ambiguity in the inclusion of both benefits granted and denied in the same letter, noting that the letter was specific as to which damage was excluded from coverage. The court also stated that whether the word “denial” appeared in the letter was immaterial. The court described Plaintiffs’ argument that the letter should have quoted the statute of limitations policy provision as unsupported by any applicable case law. Finally, the court saw no harm in Liberty Mutual’s inclusion of information regarding its internal appeals process, stating that it did not alter the finality of the denial.

This decision may be of use to carriers when determining what constitutes a clear and plain denial of policy benefits under New Jersey law.