[137 NJSuper Page 143] Defendant Veronica Shara (Shara) was the operator of a motor vehicle which became involved in an accident with another vehicle owned and operated by defendant Nicholas Melle (Melle) on or about February 6, 1974. The Melle vehicle had been cut off by a car owned and operated by defendant Enrique Sosa (Sosa). Sosa was uninsured at the time of the accident. Melle was insured, as was Shara who was covered by a policy issued by plaintiff Government Employees Insurance Company (GEICO) to defendant Eugene Shara. As a result of the said accident Shara alleged that she sustained personal injuries. She proceeded to settle her claim and collected the sum of $1,750 from Kemper Insurance Co., the insurance carrier for Melle. The settlement was without the knowledge or consent of GEICO. Shara made a claim under the uninsured motorists endorsement (UM) of the policy issued by GEICO. Pursuant to the provisions of the UM Shara demanded arbitration of her claim. GEICO contends that the claimant is not
entitled to arbitration for failure to comply with the provisions of the policy in that she entered into a settlement agreement with a person who may be legally liable for damages without the written consent of the insurer. GEICO seeks to restrain Shara from proceeding with arbitration and prays for a judgment declaring the rights of the parties under the UM in the policy issued to Eugene Shara.
GEICO relies on the following exclusionary provision in its policy:
This insurance does not apply: (a) to bodily injury or property damages with respect to which the insured, his legal representative or any person entitled to payment under this insurance shall, without the written consent of the company , make any settlement with any person or organization who may be legally liable therefor.*fn1 [Emphasis supplied]
GEICO argues that since Shara, without the written consent of GEICO, has made a settlement with Melle, a person who may be legally liable for claimant's injuries, she does not have the right to payment under the UM or the right to arbitrate the matter.
GEICO urges that the exclusion is valid and enforceable, its purpose being to prevent settlements of which the insurer is not informed and in which it is not permitted to participate despite the fact that any resulting release would probably affect its subrogation rights under the policy. As authority for the validity of the "written consent" exclusion plaintiff cites La Bove v. American Employees Ins. Co. , 189 So. 2d 315 (La. App. 1966); Poray v. Royal Globe Ins. Co. , 90 N.J. Super. 454 (Law Div. 1966).
Shara contends that the exclusion is invalid and unenforceable because such a restriction on the right of an insured to collect payments under the UM of its own policy is
not authorized by the statute mandating such coverage. N.J.S.A. 17:28-1.1. The question before this court is whether the "written consent" exclusion in the UM of the policy issued by GEICO prevents Shara from proceeding to arbitration and asserting a claim for payment under the UM.
Shara maintains that this question is within the arbitration provision of the UM and therefore should be answered by the arbitrator. I do not agree. Although arbitration is the preferred forum for resolving disputes, Keppler v. Terhune , 88 N.J. Super. 455 (App. Div. 1965), the right to arbitrate is a contract right arising from the express agreement of the parties. The parties are obligated to submit to arbitration only those issues which they have specifically agreed to arbitrate. Goerke Kirch Co. v. Goerke Kirch Holding Co. , 118 N.J. Eq. 1, 4 (E. & A. 1935).
The arbitration provision in the insurance contract ...