The opinion of the court was delivered by: McLAUGHLIN, District Judge.
Plaintiff, Grace C. Adipietro, is a New York citizen.
Defendant Colonial Life Insurance Company of America
("Colonial") is an insurance company incorporated under the
laws of New Jersey with its principal place of business in New
Jersey.*fn1 This Court's jurisdiction is based upon diversity
of citizenship. 28 U.S.C. § 1331.
On September 1, 1982 Loriann Adipietro, plaintiff's daughter,
suffered severe injuries which left her comatose for three and
one-half months. Loriann was hospitalized from September 1,
1982 until November 1983. Thererafter, Loriann received therapy
at Children's Specialized Hospital in Mountainside, New Jesey
on an out-patient basis until May 1984.
During this therapy, Loriann's physician recommended that she
continue her treatment at a facility closer to her home. To
that end, Loriann sought and gained admission to the New York
University Medical Center Head Trauma Rehabilitation Program
(the "Program") beginning in fall 1984.
At the time Loriann entered the Program, her mother,
plaintiff Grace C. Adipietro, was employed full-time by TDK
Electronics Corp. According to plaintiff, all full-time
employees of TDK were entitled to family medical benefits under
Colonial Group Policy Number 305377-000 (the "Policy").
Apparently, plaintiff sought assurance from Colonial that she
would be reimbursed for Program expenses incurred by Loriann.
On approximately June 21, 1984, Colonial informed plaintiff
that Program expenses would not be covered under the Policy.
On October 1, 1985 the parties entered into a stipulation
settling the 1984 Action (the "Stipulation"). The present
controversy centers on the Stipulation, which provides in part
1. Defendant [Colonial] agrees to reimburse
plaintiff for the cost of plaintiff's daughter
Loriann's participation in the [Program]
as described in . . . Exhibit 1.
2. Reimbursement shall be for the fees actually
incurred and limited to the amount of
$24,910.00 as set forth in Exhibit 1.
3. Plaintiff agrees to accept the foregoing
reimbursement in full satisfaction of all
plaintiff's claims set forth in the complaint
and the [1984 Action] is discontinued with
prejudice . . ., and
4. [E]vidence of this . . . settlement shall
be admissible in any future litigation
pertaining to any future treatment
programs for ...