On appeal from the Superior Court, Law Division, Atlantic County.
Furman, Shebell and Stern. The opinion of the court was delivered by Shebell, J.A.D.
Appellant, William Walker, an employee of Atlantic Chrysler Plymouth, Inc. ("Atlantic"), an automobile dealership, and his wife, Laurice Walker, appeal the granting of summary judgments in favor of defendants, Atlantic and its insurance broker, Robert J. Sears, trading as Robert J. Sears, Inc.
Plaintiffs' cause of action arises out of defendants' failure to provide additional underinsured motorist coverage ("UMI") on an Atlantic demonstrator car plaintiff William was driving at the time of an accident in which he suffered injuries and damages in excess of the basic mandatory UMI coverage of $15,000. N.J.S.A. 17:28-1.1a(1). Plaintiff asserts that the broker owed him a duty to recommend that the employer get greater UMI coverage and also that his employer should have informed him of the insurance coverage limitations.
The facts are not in dispute. On May 23, 1984 Walker was involved in a motor vehicle accident as a result of which the other driver died. William, although on his own time, was driving his employer's automobile which was provided for plaintiff's use. The vehicle was insured under a policy which Atlantic procured through its broker of several years, Sears. The policy had liability limits of $500,000 and excess liability of $5,000,000, but only $15,000 in uninsured and underinsured motorist coverage.
The principals of Atlantic relied fully on Sears to obtain all insurance necessary for the operation of a car dealership; their instructions were simply to "cover us." Sears had the authority
to acquire, delete and amend coverage as he thought appropriate, so long as the premium was not too high. Additional UMI coverage for the vehicles used by Atlantic's employees to bring it to the maximum available would have cost about $800 per year. Prior to the accident Sears did not suggest that Atlantic acquire greater UMI coverage nor did Atlantic ever request excess coverage; Sears doubted the principals of Atlantic knew the UMI limits. After the accident, Atlantic increased its uninsured motorist coverage to $500,000. Atlantic did not advise its employees as to the extent of coverage on the vehicles Atlantic provided them.
In considering whether the motion judge was correct in granting summary judgment this court applies the same standards as the trial court: it first decides whether there was a genuine issue of material fact and, if there was not, it then decides whether the trial judge's ruling on the law was correct. Summary judgment must be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2. If the papers show that there is no real material issue, then summary judgment should be granted. Judson v. Peoples Bank and Trust Co. of Westfield, 17 N.J. 67, 75 (1954). The court must not decide issues of fact; it must only decide whether there are any such issues. 17 N.J. at 73.
Plaintiffs contend that an employer "has a duty to advise an employee that coverage as to underinsured/uninsured motorist protection is or was maintained at its statutory minimum amount . . ." and that Atlantic's breach of that duty deprived "plaintiff of the opportunity to maintain increased coverage through alternate sources, and specifically through personal automobiles owned within the family." The issue in its broadest sense is whether an employer owes a duty to an employee to explain the terms and conditions of fringe benefits.
We find no authority supporting the existence of such a duty. This is not a situation where the employer misrepresented the terms and conditions of a fringe benefit on which the employee relied suffering detriment. See Carlsen v. Masters, Mates & Pilots Pension Plan Trust, 80 N.J. 334, 340-341 (1979). We agree with the motion judge that "Atlantic had no duty to maintain anything beyond the minimum limits." In the absence of concealment or misrepresentation as to the limits of coverage, we find no liability for Atlantic's failure to affirmatively inform plaintiff that only the statutorily required UMI coverage was provided.
Plaintiffs argue that Sears was negligent in failing to advise Atlantic of the availability of increased UMI and that, as third party beneficiaries of the contract between Atlantic and Sears, plaintiffs are proper persons to urge Sears' breach of its duty to Atlantic. Sears contends he fulfilled his duty to his client, Atlantic, in that he procured legally sufficient UMI. He also urges that plaintiff had no reason to believe the vehicle which Atlantic ...