Halpern, Crane and Michels. The opinion of the court was delivered by Michels, J.A.D.
Plaintiffs appeal from a summary judgment of the Law Division in favor of defendant insurance companies declaring that the uninsured motorist (UM) endorsement of the automobile liability policies issued by defendants did not provide coverage to plaintiffs for the damages they sustained as a result of an automobile accident, because the automobile in which plaintiffs Jean Gorton and Mari Ferry and plaintiff Bernard Levenberg's decedent, Judy Levenberg, were passengers was not an "uninsured highway vehicle" under the UM endorsement.
Plaintiffs Gorton, Ferry and decedent were passengers in an automobile operated by Richard Chamos which was involved in an accident with another automobile owned by John P. Gilmore and operated by Philip Dempsy. Gorton and Ferry were seriously injured. Levenberg and Chamos were killed. Plaintiffs instituted suit against Chamos, Dempsy and Gilmore. As a result of the discovery completed pursuant thereto it was determined that Dempsy and Gilmore were not at fault. It was conceded that the accident was due solely to the negligence of Chamos. The automobile which he was operating was covered by a liability insurance policy with minimum statutory limits for bodily injury or death of $10,000 a person and $20,000 an accident.
The insurance company issuing the policy covering the Chamos automobile offered the policy limits to plaintiffs and other claimants who were also injured in the accident. Since Chamos was an infant and had no assets from which to satisfy any judgment, and since he was solely responsible for the accident, plaintiffs and the other claimants settled all their claims for a total of $20,000 -- the limit of insurance available. The Gorton claim was settled for $4,285.71; the Ferry claim for $2,042.85, and the Levenberg claim for
$2,673.44. The other claimants received the balance of the $20,000 insurance coverage. These settlements exhausted the total insurance coverage available although allegedly they did not represent adequate or full compensation to plaintiffs for the damages sustained.
Each of the plaintiffs had available an automobile liability insurance policy with UM coverage which provided:
The company will pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured highway vehicle because of bodily injury or property damage, caused by accident and arising out of the ownership, maintenance or use of such uninsured highway vehicle; provided, for the purposes of this coverage, determination as to whether the insured or such representative is legally entitled to recover such damages, and if so the amount thereof, shall be made by agreement between the insured or such representative and the company or, if they fail to agree, by arbitration.
No judgment against any person or organization alleged to be legally responsible for the bodily injury or property damage shall be conclusive, as between the insured and the company, of the issues of liability of such person or organization or of the amount of damages to which the insured is legally entitled unless such judgment is entered pursuant to an action prosecuted by the insured with the written consent of the company.
An "uninsured highway vehicle" was defined in the UM endorsements issued by defendants Government Employees Insurance Company and Reliance Insurance Company as follows:
"uninsured highway vehicle" means:
(a) a highway vehicle with respect to the ownership, maintenance or use of which there is, in at least the amounts specified by the financial responsibility law of the state in which the insured highway vehicle is principally garaged, no bodily injury and property damage liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such vehicle, or with respect to which there is a bodily injury and property damage liability bond or insurance policy ...