                        NOT FOR PUBLICATION WITHOUT THE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




                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NOS. A-0754-15T1
                                                   A-0808-15T1


PENN NATIONAL INSURANCE
COMPANY,

              Plaintiff-Appellant,

v.

GROUP C COMMUNICATIONS, INC.,

          Defendant-Respondent.
__________________________________

G.M. SIGN, INC., individually
and on behalf of a certified
class as judgment creditors of
GROUP C COMMUNICATIONS, INC.,

          Intervenor-Respondent.
______________________________________

PENN NATIONAL INSURANCE
COMPANY,

              Plaintiff-Respondent,

v.

GROUP C COMMUNICATIONS, INC.,

          Defendant-Appellant.
__________________________________
G.M. SIGN, INC., individually
and on behalf of a certified
class as judgment creditors of
GROUP C COMMUNICATIONS, INC.,

          Intervenor-Appellant.
______________________________________

         Argued April 16, 2018 – Decided July 31, 2018

         Before Judges Messano, O'Connor, and Vernoia.

         On appeal from Superior Court of New Jersey,
         Law Division, Monmouth County, Docket No.
         L-0134-09.

         Richard C. Mason argued the cause for
         appellant in A-0754-15 (Cozen O'Connor and
         Kinney Lisovicz Reilly & Wolff, PC, attorneys;
         Kevin E. Wolff and Richard C. Mason, of
         counsel and on the briefs; Timothy P. Smith
         and Kathleen J. Devlin, on the briefs).

         Jeffrey A. Berman (Anderson & Wanca) of the
         Illinois bar, admitted pro hac vice, argued
         the cause for respondents in A-0754-15
         (Giordano, Halleran & Ciesla, PC, and Jeffrey
         A. Berman, attorneys; Michael J. Canning, of
         counsel and on the brief; Jeffrey A. Berman
         and Matthew N. Fiorovanti, on the brief).

         Phillip Bock (Bock, Hatch, Lewis and Oppenheim,
         LLC) of the Illinois bar, admitted pro hac
         vice, argued the cause for appellants in A-
         0808-15 (Giordano, Halleran & Ciesla, PC, and
         Phillip Bock, attorneys; Michael J. Canning,
         of counsel and on the brief; Jeffrey A. Berman
         and Matthew N. Fiorovanti, on the brief).

         Richard C. Mason argued the cause for
         respondent in A-0808-15 (Cozen O'Connor and
         Kinney Lisovicz Reilly & Wolff, PC, attorneys;
         Richard C. Mason and Samantha M. Evans, of
         counsel and on the briefs; Kevin E. Wolff,


                                 2                         A-0754-15T1
           Timothy P. Smith, and Kathleen J. Devlin, on
           the briefs).

PER CURIAM

      During all times relevant to these appeals, Penn National

Insurance Company (Penn National) insured Group C Communications

Inc. (Group C), a New Jersey corporation, pursuant to a business

owner's   liability      policy    (primary   policy)    and   a    commercial

umbrella policy (umbrella policy).            The primary policy provided

$1   million   in    liability    coverage    "per    occurrence,"    with    an

aggregate policy limit of $2 million. The umbrella policy provided

additional liability coverage of $2 million per occurrence and in

the aggregate.

      Siblings Edgar Theodore Coene (Ted) and Susan Coene (Susan)1

served as co-presidents of Group C, which provided information and

counsel   to    businesses       regarding    their    facilities    and     any

contemplated relocation, expansion or consolidation.                 Among its

activities, Group C produced a trade show and conference known as

the TFM Show.       The 2005 TFM Show was held in Chicago, and, in his

advanced planning, Ted met in 2002 with a representative from the

Chicago Convention and Tourism Bureau (CCTB) who assured him that

the CCTB could help "grow [the] show" by providing local mailing,



1
  We use first names to avoid confusion and apologize for the
informality.

                                       3                               A-0754-15T1
fax and phone lists for Group C's promotion to both exhibitors and

attendees.

     Group C acquired those lists from the CCTB and hired Quick

Link Information Services, Inc. (Quick Link) to send promotional

fliers by fax to those on the lists.     Quick Link did so on seven

occasions between December 6, 2004 and January 26, 2006, with the

last set of faxes advising recipients of the anticipated 2006 show

Group C was holding again in Chicago in April.

     G.M. Sign Inc. (G.M.), an Illinois company, received an

unsolicited fax from Group C on April 15, 2005.      In July 2008,

G.M. filed a class action suit in state court in Illinois (the

underlying action) alleging, among other things, Group C violated

the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227.

The TCPA makes it unlawful "to use any telephone facsimile machine

. . . to send, to a telephone facsimile machine, an unsolicited

advertisement," unless certain statutory exceptions apply.         47

U.S.C. § 227(b)(1)(C). The TCPA provides a private right of action

to recover the greater of actual damages or $500 "for each . . .

violation."   Id. at § 277(b)(3).

     We described what happened thereafter in our prior opinion.

Penn Nat'l Ins. Co. v. Group C Commc'ns, Inc., No. A-2813-09 (App.

Div. Aug. 1, 2011) (slip op. at 8-10).     The Law Division granted

Penn National summary judgment declaring it had no duty to defend

                                4                           A-0754-15T1
or indemnify Group C under the policies.             Id. at 10.     Group C

appealed.    Although Penn National had agreed to provide a defense

to Group C under a reservation of rights, in June 2010, as a result

of   the   Law   Division's   judgment,    Penn    National    withdrew   its

representation of Group C in the underlying action.

      In October 2010, G.M. moved for summary judgment in the

underlying action, which had been removed to the federal district

court for the Northern District of Illinois.             Group C did not

retain counsel or respond to the motion.          On January 10, 2011, the

district court granted G.M.'s motion and entered judgment against

Group C for $18,966,000 ($500 for each of 37,932 unsolicited faxes

sent by Quick Link).2

      On August 1, 2011, we reversed the Law Division's grant of

summary judgement to Penn National, concluding, in part, there was

a genuine issue of material fact as to whether there was coverage

under both the advertising and property damage insuring provisions

of the policies.      Id. at 20, 25.      We remanded the matter to the

Law Division for further proceedings.             Id. at 25.    The Supreme

Court denied Penn National's petition for certification.           209 N.J.

96 (2011).




2
  The court amended the judgment to $18,921,000 after considering
class members who had opted out.

                                    5                                A-0754-15T1
       Thereafter, Group C assigned its rights to G.M.             On remand,

Group C moved to file an amended answer and counterclaim alleging

Penn   National   acted   in   bad    faith    by   failing   to   settle   the

underlying   action.3       G.M.     also   moved    to   intervene   in    the

declaratory judgment action, asserting that Penn National had

acted in bad faith.       The Law Division judge granted both motions

and entered a conforming order.4

       We discuss the interim motion practice and the judge's pre-

trial rulings as necessary below, but for now, it suffices to say

that by the time of the trial before a different judge and a jury,

Group C's bad faith claims were no longer in the case.             The issues

left for the jury to decide were:             whether G.M. and other class

members suffered "property damage" as defined in the policies;

whether the "property damage" was the result of one or more than

one "occurrence"; and whether Group C acted with subjective intent

to cause harm to the fax recipients such that coverage was excluded




3
  Earlier in the litigation, before the grant of summary judgment
to Penn National, Group C successfully moved to amend its
counterclaim but never actually filed an amended counterclaim
alleging bad faith in failing to settle the underlying action.
4
  Except when necessary to differentiate between respondents-
cross-appellants Group C and G.M., we refer to them simply as
Group C.



                                       6                               A-0754-15T1
under the policies' "expected or intended" injury exclusion.5

     The jury returned a verdict in favor of Group C, finding

that:   (1) G.M. and the other class members suffered property

damage as defined in the policies; (2) Group C had not subjectively

expected or intended this damage; and (3) more than one occurrence

caused the damage.    The judge denied Penn National's subsequent

motion for judgment notwithstanding the verdict (JNOV) or a new

trial. She granted Group C's application for counsel fees pursuant

to Rule 4:42-9(a)(6), awarding $847,110.80 in fees, which was

$923,369.26 less than what was sought.   On September 3, 2015, the

court entered final judgment in favor of Group C for $5,485,129.61

— $4,389,500 in damages, $248,518.81 in prejudgment interest, and

$847,110.80 in counsel fees — plus post-judgment interest.

     Penn National appealed (A-0754-15), and Group C filed a cross-

appeal (A-0808-15).   The appeals were argued back-to-back, and we

have consolidated them now to issue a single opinion.

                            As to A-0754-15

     Section A(1)(a) of the primary policy required Penn National

to "pay those sums that the insured [became] legally obligated to

pay as damages because of . . . 'property damage,' . . . to which


5
  Although we previously stated the policies' "advertising injury
provisions would appear to be the most logical sources of any
coverage," id. at 14, Group C abandoned its "advertising injury"
claim prior to trial.

                                 7                           A-0754-15T1
th[e] insurance applie[d]."            "Property damage" was defined in

section F(15) as:

           a.   Physical injury to tangible property,
           including all resulting loss of use of that
           property. All such loss of use shall be deemed
           to occur at the time of the physical injury
           that caused it; or

           b. Loss of use of tangible property that is
           not physically injured. All such loss of use
           shall be deemed to occur at the time of the
           "occurrence" that caused it.

      Section A(1)(b)(1)(a) provided coverage for "property damage"

caused by an "occurrence," which was defined in section F(12) as

"an   accident,     including      continuous    or    repeated    exposure      to

substantially     the   same    general     harmful   conditions."        Section

B(1)(a) excluded "property damage" that was "expected or intended

from the standpoint of the insured."

      Section   I(1)    of   the    umbrella    policy     provided   that    Penn

National would "pay on behalf of the insured the 'ultimate net

loss' in excess of the 'applicable underlying limit' which the

insured   becomes    legally       obligated    to   pay   as   damages   because

of . . . Property Damage Liability."            The definitions of "property

damage" and "occurrence," and the exclusion for "property damage"

that was "expected or intended from the standpoint of the insured,"

were the same as in the primary policy.




                                        8                                 A-0754-15T1
                                     I.

     Penn National argues the judge erred in denying its motions

for a directed verdict at the close of Group C's case and for JNOV

because there was no evidence G.M. and other members of the class

suffered "property damage" as defined by the policies.

     George Matiasek, the owner of G.M., testified at trial.         He

identified the fax he received from Quick Link and claimed that

such unsolicited faxes caused loss of time, tied up his fax machine

making it unavailable for legitimate business faxes, and possibly

wasted ink and toner.   His company relied heavily on a fax machine

for submitting bids and receiving signed orders, and on one

occasion, he lost an order because faxes were delayed.       Matiasek

did not know any of the other class members in the underlying

action, but said they must have been in the class because of a

"successful [fax] transmission," which Matiasek defined as having

"received" a fax.6   However, Matiasek admitted he did not know if

the fax machine of any class member actually used toner, ink or

paper to print a fax sent by Quick Link on Group C's behalf.

     The report of Robert Biggerstaff, an expert retained by G.M.,

was admitted into evidence at trial, and both parties read to the

jury excerpts from Biggerstaff's deposition.    The federal district


6
   Matiasek testified that his       company   had   participated    in
approximately 100 TCPA lawsuits.

                                 9                            A-0754-15T1
court's opinion and order in the underlying action referenced

Biggerstaff's opinion regarding the number of faxes "successfully

transmitted" by Quick Link, and used that number as the basis for

its award on summary judgment.

       In his deposition, Biggerstaff opined there were five stages

of a fax transmission, and a "successful" transmission required

completion of all five phases.       However, the actual printout of a

fax did not occur during these five phases, and, a fax machine

could continue to receive additional pages of a fax even though

it might begin to print.     A fax was "successful" regardless of

whether "the recipient actually got a piece of paper out of their

fax machine."    Based upon his review of the records from Quick

Link, Biggerstaff did not know whether any of the class recipients

ever received a paper fax transmission.

       Penn National argues that, contrary to the trial judge's

rulings when denying its motions for a directed verdict and JNOV,

Group C did not prove either "physical injury to tangible property"

or "loss of use of tangible property" as required by the policies.

It asserts that in its successful TCPA action, G.M. was only

required to prove that an unsolicited transmission was "directed

[at]" a particular fax device, not that an unsolicited fax was

printed or that a fax machine was rendered useless.           It argues

that    Biggerstaff's   deposition     testimony   and   report    simply

                                 10                               A-0754-15T1
described the phases of a successful transmission of a fax and did

not establish that any class member suffered "property damage,"

nor did Matiasek's testimony establish that any other class member

suffered "property damage."

     Group C counters by arguing the evidence established, at a

minimum, the successful transmissions to the class recipients

resulted in the admittedly temporary "loss of use of tangible

property," i.e., phone lines and fax machines. It contends whether

the recipient's fax machine ever printed out Group C's message did

not matter for purposes of coverage.   Citing the district court's

opinion supporting summary judgment in the underlying action,

Group C asserts "all members of the underlying class, who had

already been adjudged to have had faxes successfully transmitted

to them, had their telephone lines and fax machines tied up and

thereby lost their use of them."

     "Motions for involuntary dismissal, Rule 4:37-2(b), and JNOV,

Rule 4:40-2(b), are 'governed by the same evidential standard:

[I]f, accepting as true all the evidence which supports the

position of the party defending against the motion and according

[it] the benefit of all inferences which can reasonably and

legitimately be deduced therefrom, reasonable minds could differ,

the motion must be denied.'"   Innes v. Marzano-Lesnevich, 435 N.J.

Super. 198, 223 (App. Div. 2014) (quoting Verdicchio v. Ricca, 179

                                11                          A-0754-15T1
N.J.    1,   30   (2004)    (first     alteration     in    original)     (citations

omitted), aff'd. as mod., 224 N.J. 584 (2016).                   "We apply the same

standard on review."         Ibid. (citing Estate of Roach v. TRW, Inc.,

164 N.J. 598, 612 (2000)).

       Without question, in passing the TCPA, Congress intended to

restrict unsolicited faxes, which "impose a cost on the called

party" in paper used and "occup[y] the recipient's facsimile

machine so that it is unavailable for legitimate business messages

while processing and printing the junk fax."                     Landsman & Funk PC

v.   Skinder-Strauss        Assocs.,    640    F.3d   72,    76    (3d    Cir.     2011)

(citations omitted).         "The TCPA prohibits sending unsolicited fax

advertisements; it does not prohibit the sending of unsolicited

fax advertisements only when there are specific harms that a

plaintiff can later identify."             City Select Auto Sales, Inc. v.

David Randall Assoc., Inc., 296 F.R.D. 299, 310 (D.N.J. 2013).

"The TCPA 'does not specifically require proof of receipt'" of the

fax.    Id. at 309 (quoting CE Design Ltd. v. Cy's Crabhouse N.,

Inc., 259 F.R.D. 135, 142 (N.D. Ill. 2009)).

       Undoubtedly, G.M. proved at trial that Group C violated the

TCPA,   and   we    reject    without    further      comment      Penn   National's

contention        that     Matiasek's     testimony        was     incredible         and

insufficient       to    demonstrate    G.M.   suffered      property      damage       as

defined by the policies.          R. 2:11-3(e)(1)(E).             However, we agree

                                         12                                      A-0754-15T1
with Penn National that Group C was not entitled to indemnification

simply   because      the   judgment    in   the   underlying   action    proved

violations of the TCPA as to other class members.                  The mere fact

that   by    enacting    the   TCPA    Congress    intended   to    address   the

annoyance of unwanted faxes, and the potential loss of time, toner,

ink and temporary inutility of the machine itself, was insufficient

to prove actual property damages as defined by the policies. Group

C's right to indemnification required such proof.                     See Bldg.

Materials Corp. of Am. v. Allstate Ins. Co., 424 N.J. Super. 448,

458 (App. Div. 2012) (holding indemnitee "cannot establish a prima

facie case of covered loss simply by demonstrating that the class

action claimants alleged potential [covered] damage; rather, it

must show that the underlying settlement actually included payment

for such claimed damages").

       Neither Biggerstaff's report nor his deposition testimony

proved any other class member suffered a "[p]hysical injury to

tangible property" from the offending faxes it received.                Matiasek

clearly testified he had no idea what happened to other members

of the class, only that he knew, based upon Biggerstaff's report

that   the    faxes     were   "successful."        During    his    deposition,

Biggerstaff was asked:

             [Q.] Just because a facsimile has indicated
             it being successful from the sender does not


                                        13                               A-0754-15T1
           necessarily mean a piece of paper came out of
           the recipient's fax machine, correct?

           [A.]   That is correct.

There was no proof that the class members' fax machines printed

out the faxes, i.e., thereby depleting the use of ink, toner or

paper.

     The policies also covered damages that resulted from the

"loss of use" of property that was not damaged.        Contrary to Group

C's assertion, there was no proof that other class members lost

the use of their phone lines or fax machines because of Quick Link

sending them a fax on behalf of Group C.         In fact, contrary to

Group    C's   assertion,   neither    Biggerstaff's   report   nor   his

deposition testimony demonstrated the unwanted faxes deprived a

class member of the use of its phone line or its fax machine.

     As a result, Penn National's motion for a directed verdict

or its motion for JNOV should have been granted as to all claims

for property damage under the policies, save the one asserted and

proved by G.M.

                                  II.

     As noted, because the policies' intentional conduct exclusion

would have denied Group C coverage if it expected or intended the

property damage suffered by G.M. and the other class members, the

jury was asked to decide whether Group C "subjectively expect[ed]


                                  14                             A-0754-15T1
or intend[ed] the property damage."        See Voorhees v. Preferred

Mut. Ins. Co., 128 N.J. 165, 183-84 (1992) (explaining "the

accidental nature of an occurrence is determined by analyzing

whether the alleged wrongdoer intended or expected to cause an

injury," and "require[s] an inquiry into the actor's subjective

intent to cause injury").

    In our prior decision reversing summary judgment, we held

"that a good faith belief that the businesses contained on the

CCTB list obtained by Group C were willing to receive faxes from

other   business   entities   would   preclude   application   of   the

intentional conduct exclusion."       Penn National, slip op. at 24.7


7
  Our prior opinion failed to address significant authority from
other courts holding that the receipt of unsolicited faxes in
violation of the TCPA did not trigger property damage coverage
under of business liability policies. For example, although we
cited to Terra Nova Ins. Co. v. Fray-Witzer, 869 N.E. 2d 565, 571
(Mass. 2007), and its discussion of Voorhees, see Penn National,
slip op. at 23, we failed to note that the Supreme Judicial Court
of Massachusetts held there was no coverage for property damage
arising from unsolicited faxes because any damage was not caused
by an accident and hence was not an occurrence under the policy.
Terra Nova, 869 N.E. 2d at 570-71.

     Similarly, in St. Paul Fire & Marine Ins. Co. v. Brother
Int'l Corp., 319 Fed. Appx. 121, 127 (3d Cir. 2009), the court
affirmed the grant of summary judgment to the insurer under the
policy's property damage insuring provisions.         Once again
interpreting Voorhees, the court reasoned the insured expected or
intended the property damage for which it sought coverage, i.e.,
the depletion of fax paper and toner, and therefore the insurer
properly denied coverage under an exclusion identical to the one
                              (footnote continued next page)


                                 15                            A-0754-15T1
The judge denied Penn National's request to define "good faith"

for the jury by analogizing to the Uniform Commercial Code (UCC),

N.J.S.A. 2A:1-201(b)(20), i.e. "honesty in fact."

     The judge reasoned the suggested charge was inappropriate

because this was not a case involving the UCC.   She provided the

following instructions:

               The policy's exclusion for expected or
          intended injury states . . . [t]his insurance
          does not apply to "property damage" expected
          or intended from the standpoint of the
          insured.

               Penn National bears the burden of proof
          to establish that there was no "occurrence"
          and also that the exclusion applies.

               The accidental nature of an occurrence
          is determined by analyzing whether the alleged
          wrongdoer subjectively intended or expected to
          cause an injury. If not, then the resulting
          injury is accidental even if the act that
          caused the injury was intentional.

               You should apply that standard to
          determine whether or not Group C's conduct
          falls within the expected or intended injury
          exclusion.

               If you find that Group C ha[d] a good
          faith belief that the businesses contained in
          the [CCTB] list . . . were willing to receive
          faxes from other business entities, then you

(footnote continued)
in this case. Ibid.; see also Melrose Hotel Co. v. St. Paul Fire
& Marine Ins. Co., 432 F. Supp. 2d 488, 510 (E.D. Pa. 2006)
(holding that insured's "knowledge about the TCPA and its lack of
intent to violate the TCPA are irrelevant to whether it intended
to cause the harm that befell Class members").

                               16                          A-0754-15T1
          must find that Group C did not subjectively
          expect or intend the "property damage."

               If you find that Group C did not have a
          good   faith   belief   that   the   businesses
          contained in the [CCTB] list . . . were willing
          to receive faxes from other business entities,
          then you must find that Group C did
          subjectively expect or intend the "property
          damage."

     Penn National argues before us it was reversible error not

to provide instructions on "good faith."      It further contends that

instructions defining "good faith" were particularly necessary

because   Ted's   testimony    at    trial   contradicted       his     prior

certification,    referenced   in   our   opinion,   id.   at   22.        Ted

certified:

          When I acquired the list from the CCTB, I
          advised that Group C would probably use the
          list for the dissemination of facsimiles. The
          CCTB   never   recommended   that   I   obtain
          permission from each addressee before doing
          so and never said I was not allowed to send
          faxes promoting the TFM Show to the names on
          the list. This supported my belief that I had
          permission to fax the document to each company
          listed by the CCTB, since I reasonably
          concluded that a governmental entity could not
          sell a list of facsimile numbers without first
          receiving permission from those companies.

          [Ibid.]

At trial, Ted acknowledged that he did not personally obtain the

lists, but rather two of his employees did.      He never received any

affirmative assurances from the CCTB that the recipients had


                                    17                                A-0754-15T1
consented to receive faxes, but rather assumed a government entity

like the CCTB would not provide lists that contained the names of

businesses unless they had consented.8

     We find no reason to reverse.          Initially, Penn National's

claim that Ted committed a "fraud" on the court because his prior

certification was demonstrably false and misled us to reverse the

grant of summary judgment in our prior opinion lacks any merit.

R. 2:11-3(e)(1)(E).      Nor does Ted's trial testimony in and of

itself warrant a jury charge defining "good faith."           It suffices

to   say   the   jury   had   ample    opportunity   to   consider     Ted's

credibility.

     We agree that an explanation of "good faith" would have helped

the jury understand a complicated point, i.e., while Penn National

bore the burden to prove the exclusion applied, under our prior

holding, it could not shoulder that burden if Group C demonstrated

it acted in good faith.       There were many sources, other than the

UCC, that could have been used to help the jury understand the

concept.    See, e.g., Model Jury Charge (Civil), 4.10J, "Implied

Terms — Covenant of Good Faith and Fair Dealing" (2011) (cases

cited in footnotes two and three).




8
  During trial, Penn National argued the CCTB's              own     website
indicates that it is not a governmental agency.

                                      18                             A-0754-15T1
     In any event, we are convinced the failure to further define

"good faith" did not create reversible error in this case precisely

because the jury had the opportunity to consider whether Ted

"honestly believed" the lists contained only the names of those

which consented to receive faxes.

                                      III.

     Because we conclude Group C proved only one occurrence at

trial, we need not otherwise address the argument Penn National

asserts   in   Point   I   of   its   brief,   i.e.,    there   was   only   one

occurrence as a matter of law because all the faxes were the result

of a "single misjudgment by Group C."          We also find without merit

Penn National's contention in Point IV that the Law Division erred

in permitting Group C to amend its counterclaim and in permitting

G.M. to assert bad faith claims in its intervenor complaint.                   R.

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

     Lastly, in Point V, Penn National argues the trial judge

abused her discretion in awarding fees that included time spent

in pursuit of Group C's bad faith claims.              We do not agree.      The

judge severely discounted the fee request based precisely on Group

C's lack of success.

     However, in light of our decision, we remand the matter to

the trial judge for entry of an amended judgment limited to G.M.'s

claim, and to conduct a hearing on the appropriate fee award in

                                      19                                A-0754-15T1
light of our decision.   We leave to the trial court's discretion

the conduct of the hearing.

                              As to A-0808-15

     Before trial, the judge dismissed Group C's bad faith claims

on summary judgment, except for the count in its counterclaim that

alleged Penn National acted in bad faith by failing to settle the

underlying action at a time when it controlled that litigation and

could have settled the claim within Group C's policy limits. Group

C does not appeal from that order.

     However, on the eve of trial, when the parties met to discuss

Penn National's various in limine motions, the insurer renewed its

attempt to dismiss the bad faith failure to settle claim by arguing

Group C's lack of an expert was fatal.     Group C objected to the

untimeliness of the motion and requested an adjournment if the

court was inclined to dismiss for lack of an expert.     The judge

did not rule on the issue at that time.

     After the jury was sworn but before any testimony, the judge

questioned counsel as to whether our then-recent decision in

Wacker-Ciocco v. Government Employees Insurance Co., 439 N.J.

Super. 603 (App. Div. 2015), necessitated dismissal of the bad

faith failure to settle claim.    Relying on Pickett v. Lloyd's and

Peerless Insurance Agency, Inc., 131 N.J. 457 (1993), and Wacker-

Ciocco, the judge dismissed the bad faith failure to settle claim

                                 20                         A-0754-15T1
because   it   was   "fairly   debatable"   whether   coverage   existed,

particularly since the trial court had granted summary judgment

to Penn National in 2010 declaring there was no coverage.         Relying

on Fireman's Fund Insurance Co. v. Security Insurance Co. of

Hartford, 72 N.J. 63 (1976), the judge further determined that

Group C should have protected its interests and negotiated its own

settlement with G.M. once it believed Penn National had breached

its obligation to settle the case.

     Alternatively, the judge found that any assessment of Penn

National's conduct in this complex case was beyond the ken of the

average juror and dismissed the bad faith failure to settle claim

because Group C had no expert.       Noting the case management order

required Group C to furnish an expert report nearly one year

earlier, she denied any adjournment and dismissed the bad faith

failure to settle counterclaim.

     Group C now argues it was error for the judge to sua sponte

reconsider her earlier denial of summary judgment on this count

of its counterclaim.      We disagree.      See Lombardi v. Masso, 207

N.J. 517, 534 (2011) (quoting Johnson v. Cyklop Strapping Corp.,

220 N.J. Super. 250, 257 (App. Div. 1987) ("It is well established

that 'the trial court has the inherent power to be exercised in

its sound discretion, to review, revise, reconsider and modify its

interlocutory orders at any time prior to the entry of final

                                   21                             A-0754-15T1
judgment.'").   Here, the judge had discretion to reconsider her

earlier ruling, and she gave Group C ample time to address the

issues before making her decision.

      Citing our decision in Cho v. Trinitas Regional Medical

Center, 443 N.J. Super. 461 (App. Div. 2015), decided after the

trial in this case, Group C further contends that Penn National's

in limine motion regarding the need for an expert was actually a

thinly-veiled untimely motion for summary judgment.             We agree.

      In Cho, 443 N.J. Super. at 468-69, the trial judge granted

the   defendant's   in   limine   motion   to   dismiss   the   plaintiff's

complaint on the eve of trial.       We reversed, noting "as a general

rule, a motion in limine will not have a dispositive impact on a

litigant's entire case." Id. at 470. Further, such motions should

be granted sparingly "particularly . . . when the 'motion in

limine' seeks the exclusion of an expert's testimony, an objective

that has the concomitant effect of rendering a plaintiff's claim

futile."   Id. at 470-71.    We concluded the judge's decision denied

the plaintiff due process.        Id. at 474-75.

      During oral argument before the trial judge, Penn National's

counsel asserted that only the judge's denial of the insurer's

summary judgment motion one month earlier made it now necessary

to challenge Group C's lack of an expert.          We reject the argument

as meritless.   R. 2:11-3(e)(1)(E).        Simply put, there was no good

                                    22                               A-0754-15T1
reason why Penn National did not raise the lack of expert testimony

as a basis to dismiss the claim at the same time it made its other

arguments.   Raising that specific argument on the eve of trial was

improper.

     Contrary to Penn National's argument, the result was not

harmless, see Cho, 443 N.J. Super. at 474-75, because we also

agree with Penn National and the judge that Group C needed an

expert to prosecute its bad faith failure to settle claims in such

a complex factual setting as here.

     In Rova Farms Resort, Inc. v. Investors Insurance Co. of

America, 65 N.J. 474 (1974), the Court recognized an insured's

cause of action against its insurer for bad faith failure to settle

a third-party claim in certain instances where the insurer rejects

a settlement demand within the policy limits and the verdict

following trial exceeds the policy limits.    The Rova Farms Court

explained that, if, under a liability insurance policy, the insurer

reserves "full control of the settlement of claims against the

insured, prohibiting him from effecting any compromise except at

his own expense," the insurer has a fiduciary obligation to

exercise good faith in settling those claims.    Id. at 492.     Thus,

any decision not to settle

            "must be a thoroughly honest, intelligent and
            objective one.   It must be a realistic one
            when tested by the necessarily assumed

                                 23                            A-0754-15T1
           expertise of the company."    This expertise
           must be applied, in a given case, to a
           consideration of all the factors bearing upon
           the advisability of a settlement for the
           protection of the insured. While the view of
           the carrier or its attorney as to liability
           is one important factor, a good faith
           evaluation requires more.        It includes
           consideration of the anticipated range of a
           verdict, should it be adverse; the strengths
           and weaknesses of all of the evidence to be
           presented on either side so far as known; the
           history of the particular geographic area in
           cases of similar nature; and the relative
           appearance, persuasiveness, and likely appeal
           of the claimant, the insured, and the
           witnesses at trial.

           [Id. at 489-90 (emphasis in original) (quoting
           Bowers v. Camden Fire Ins. Assoc., 51 N.J. 62,
           71 (1968)).]

    In Wood v. New Jersey Manufacturer's Insurance Company, 206

N.J. 562, 571 (2011), the Court acknowledged that an assessment

of the reasonableness of an insurer's settlement negotiations in

the underlying action will likely hinge upon the credibility of

fact witnesses, as well as expert testimony as to what went wrong

on the settlement front and why.     Mere rejection of an offer to

settle within the policy limit and a verdict at trial in excess

thereof is not enough by itself to establish bad faith.       Radio

Taxi Service, Inc. v. Lincoln Mutual Ins. Co., 31 N.J. 299, 305

(1960).   "[T]he administration of the good faith test is not easy

for either party to the insurance contract. . . .   Considerations



                                24                          A-0754-15T1
of experience, expertise and judgment are particularly important

and significant."     Ibid.

      In Pasha v. Rosemount Memorial Park, Inc., 344 N.J. Super.

350, 353-55 (App. Div. 2001), the insured assigned it rights under

the insurance policy to the third-party plaintiffs following the

insurer's    disclaimer   of    coverage      and   the    insured's     direct

settlement with the plaintiffs.            See Griggs v. Bertram, 88 N.J.

347   (1982).    We   noted    the    importance    of    expert    opinion    in

determining the reasonableness of the settlement — an element of

the plaintiffs' claim — and agreed with the trial court that the

plaintiffs failed to sustain their burden of proof, even though

they had produced some expert testimony.            Pasha, 344 N.J. Super.

at 356-59.

      Here, we need not explain in detail the complicated factual

circumstances    regarding     Penn   National's    receipt    of    Group    C's

initial claim, its denial of coverage and decision to provide a

defense under a reservation of rights, and, of course, the Law

Division's original grant of summary judgment declaring that Penn

National had no duty to defend or indemnify.               All of these must

be considered with reference to the timeline of the underlying

action, including the ultimate certification of the class in

federal court.      In our mind, a jury was incapable of properly



                                      25                                A-0754-15T1
considering whether Penn National breached its fiduciary duty to

Group C without expert testimony.

     Without the benefit of our decision in Cho, we understand the

judge's denial of Group C's adjournment request, given the long

and tortured history of the litigation.   However, when Group C was

essentially lulled into believing it could proceed without an

expert by Penn National's unexcused failure to argue otherwise

before the day of trial, the judge should have more appropriately

adjourned the trial rather than dismiss the claim on this ground.

Alternatively, the judge could have severed the bad faith claims

and proceeded first with the coverage issue, a procedure she

discussed with the attorneys before trial but ultimately did not

need to employ.   See Taddei v. State Farm Indem. Co., 401 N.J.

Super. 449, 465 (App. Div. 2008) (suggesting severance of the

first-party bad faith claim from underinsured motorist trial).

     We therefore reverse the dismissal of Group C's bad faith

failure to settle claim and remand the matter to the trial court

for further proceedings.

     As a result, we need not decide for now whether the judge

properly applied Pickett's "fairly debatable" standard as another

reason to dismiss the bad faith failure to settle claim.   Group C

argues Pickett is simply inapplicable to an insured's bad faith

failure to settle a third-party claim.    See Wood, 206 N.J. at 564

                               26                           A-0754-15T1
(explaining nature of Rova Farms bad faith failure to settle

claim); Badiali v. N.J. Mfrs. Ins. Gp., 220 N.J. 544, 554 (2015)

(explaining "first-party bad faith claim for denial of benefits").

     In Taddei, 401 N.J. Super. at 459, a case involving a first-

party claim for uninsured motorist benefits, we explained:

          The remedy in Rova Farms was based on the
          unique fiduciary relationship that arose out
          of a general liability insurance policy. . . .
          The policy prohibited the insured from
          participating in the settlement of the third-
          party claim against it. . . . The Court found
          that this created a fiduciary duty on the part
          of the insurer to act in good faith in
          attempting to settle the claim. . . . This
          duty was of particular importance because the
          insured was personally liable for any damages
          in excess of the policy limit. . . .       The
          Court reasoned that, in essence, an insurer
          choosing not to settle within the limits of
          coverage should not be permitted to gamble
          with its insured's money. . . .

               That rationale does not carry over to the
          first party context. The insured's assets are
          not placed at risk for failure to settle
          within the policy limits.

The same fiduciary duty is not implicated when an insurer simply

refuses to defend under the policy.

     In Universal-Rundle Corporation v. Commercial Union Insurance

Co., 319 N.J. Super. 223, 249-51 (App. Div. 1999), however, we

held that the Pickett "fairly debatable" standard applied to an

insured's bad faith third-party coverage claim, not a failure to

settle claim.   No reported New Jersey decision has addressed

                               27                            A-0754-15T1
whether Pickett's "reasonably debatable" standard applies to an

insured's bad faith refusal to settle claim.

     However, in American Hardware Mutual Insurance Company v.

Harley Davidson of Trenton, Inc., 124 Fed. Appx. 107, 109 (3d Cir.

2005), the Third Circuit rejected the insurer's argument that

Pickett applied to such a claim, explaining:

               Whether [the insured] would be held
          liable for [the third-party's] injuries was
          "fairly debatable," but in the context of a
          third-party claim with a possibility of an
          excess verdict, Pickett supplies only part of
          the equation. The "fairly debatable" standard
          is analogous to the probability liability will
          attach in a third-party claim, but it does not
          consider the likelihood of an excess verdict.
          A third-party claim that may exceed the policy
          limit creates a conflict of interest in that
          the limit can embolden the insurer to contest
          liability while the insured is indifferent to
          any settlement within the limit.          This
          conflict is not implicated when the insured
          is a first-party beneficiary, where the
          claimant and the insurer are in an adversarial
          posture and the possibility of an excess
          verdict is absent. Rova Farms, not Pickett,
          protects insureds who are relegated to the
          sidelines in third-party litigation from the
          danger that insurers will not internalize the
          full expected value of a claim due to a policy
          cap.

               We conclude that the Rova Farms standard
          governs this case.

          [Id. at 112.]

     Without deciding the issue, we acknowledge the appeal of the

Third Circuit's rationale.    An insurer who, while exclusively

                               28                          A-0754-15T1
controlling the litigation, acts in bad faith and refuses to settle

a third-party claim within its insured's policy limits exposes the

insured to personal liability.       The situation therefore presents

different concerns from those posed by a suit where the insurer

acts in bad faith and wrongfully denies contractual benefits to

the insured under its policy of insurance.

     We also note our disagreement with Penn National's argument,

accepted by the trial judge, that Group C's failure to negotiate

a settlement when the insurer declined coverage was necessarily

fatal to the bad faith claim.       In Fireman's Fund, 72 N.J. at 67-

68, the insured, which had purchased a $50,000 primary liability

policy with the defendant insurer, and a $250,000 excess policy

with a second carrier, was presented with a $147,000 settlement

demand, far less than the potential damages of $400,000 to $542,000

to which it was exposed.     After the defendant insurer refused to

settle or contribute its $50,000, the insured, with the financial

cooperation of its excess carrier, settled the case for $135,000.

Id. at 68.   The insured then sued the defendant insurer, alleging

bad faith refusal to settle and seeking $50,000 plus interest and

punitive damages.    Ibid.

     After the insured prevailed on its compensatory damages claim

in both the trial and appellate courts, the matter came before the

Supreme Court.      Id. at 67-68.     The Court ruled that, when an

                                 29                           A-0754-15T1
insurer breaches its good faith obligation to settle, the insured

may make a reasonable settlement and then seek reimbursement from

the insurer, even though the policy purports to avoid liability

for settlements made without the insurer's consent.    Id. at 71-

75.   According to the Court:

               The consequences of a breach of that
          obligation differ depending on whether, viewed
          as of the time the settlement offer is being
          considered, the potential award is within or
          beyond the limits of the policy.       If the
          potential loss is within the policy limits,
          then there is no reason to deprive the insurer
          – the only one appearing to have a pecuniary
          interest in the ultimate liability and the
          only source of the funds to be paid in
          settlement – of its absolute right to control
          the litigation. . . . In such a situation,
          even though the insured may deem the refusal
          of the insurer to settle to be in bad faith,
          since prima facie the insured's pecuniary
          interest does not appear to be involved, it
          is appropriate to hold that the insured has
          no alternative but to await the trial of the
          negligence action and, if it results in a
          judgment in the claimant's favor in excess of
          the policy limits, then to institute an action
          against the insurer to recover the amount of
          the policy limits and in addition the amount
          by which the judgment exceeded the amount for
          which    the   claimant    was   willing    to
          settle. . . .

               A different situation is presented when,
          viewed as of the time the settlement offer is
          received, the potential loss and the proposed
          settlement exceed, as they did here by far,
          the limits of the policy. In such a situation,
          the insured may, but he need not await the
          outcome of the trial of the negligence action.
          He should not "be required to wait until after

                                30                         A-0754-15T1
          the storm before seeking refuge" when faced
          with "a potential judgment far in excess of
          the limits of the policy." . . . .

               He should be and is permitted, as in
          other cases in which the insurer has breached
          its obligations, to proceed to make a prudent
          good faith settlement for an amount in excess
          of the policy limits and then, upon proof of
          the breach of the insurer's obligation and the
          reasonableness   and   good   faith   of   the
          settlement made, to recover the amount of the
          policy limits from the insurer.

          [Id. at 74-75 (emphasis added).]

The Fireman's Fund Court did not require, as a matter of law, that

insureds enter into settlements at their own expense in order to

protect their interests if an insurer refuses to settle a case.

It merely held that under certain circumstances, insureds could

do so without violating policy terms where there has been a breach

by the insurer.     The insured in Fireman's Fund had an excess

carrier willing to assist it in achieving settlement; Group C had

no other carrier to turn to.

     In A-0754-15, we reverse in part, affirm in part and remand

the matter to the trial court for further proceedings consistent

with our opinion.

     In A-0808-15, we reverse the dismissal of Group C's Rova

Farms bad faith in failing to settle counterclaim and remand for

further proceedings consistent with this opinion.



                               31                          A-0754-15T1
