On appeal from Superior Court of New Jersey, Law Division, Burlington County.
Brody, Long and D'Annunzio. The opinion of the court was delivered by Brody, J.A.D.
We granted defendant Hanover Metro Insurance Company leave to appeal an interlocutory order entered by Judge Haines requiring it to submit to arbitration the issue of whether the uninsured motorist (UM) endorsement of its automobile policy covered plaintiff. We affirm.
Plaintiff was seriously injured while operating his father's pickup truck on the way to work. The truck veered off the road and struck a bridge abutment. Hanover had issued the policy to plaintiff's father; plaintiff was a resident of his father's household. The coverage issues presented by the policy are whether at the time of the accident plaintiff reasonably believed that he had permission to operate his father's vehicle and whether the accident was caused by a vehicle that cut off plaintiff and then drove away before it could be identified.
Arbitrability of a contract dispute is determined by the arbitration provisions of the contract. In re Matter of Arbitration Between Grover, 80 N.J. 221, 228-229 (1979). Thus the question on appeal is whether the policy provides that the factual issues in dispute are to be resolved in court or in arbitration.
The policy is in so-called plain language. The UM endorsement provides in relevant part:
If we and a covered person do not agree . . . [w]hether that person is legally entitled to recover damages under this endorsement . . . either party may make a written demand for arbitration [by three arbitrators]. . . . A decision agreed upon by two of the arbitrators will be binding as to . . . [w]hether the covered person is legally entitled to recover damages. . . .
A "covered person" is defined in the endorsement to mean "[y]ou or any family member." The general policy definitions provide that "you" means the "named insured" and that "family member" means "a person related to you by blood, marriage or adoption who is a resident of your household." Plaintiff, as the son of the named insured residing in his household, was therefore a "covered person."
Hanover relies on two UM endorsement provisions to deny coverage. One excludes from coverage "any person . . . [u]sing a vehicle without a reasonable belief that that person is entitled to do so." The other defines "uninsured motor vehicle" to include ". . . a hit and run vehicle whose operator cannot be identified and which hits, or causes an accident resulting in bodily injury without hitting." Hanover claims that there was no "hit and run vehicle."
Whether the facts of this accident entitle Hanover to deny coverage under these provisions is a dispute between Hanover and a "covered person" as to "[w]hether that person is legally entitled to recover damages under this endorsement" and is therefore, under the terms of the endorsement, subject to arbitration at the request of either party. Thus as to disputed matters under this UM endorsement, a court decides only whether a person is a "covered person" as defined in the endorsement and arbitrators decide whether the endorsement affords coverage to a "covered person."
Hanover relies on cases where we have held that the arbitrable issues under a UM endorsement are whether the uninsured motorist is liable and the amount of damages proximately caused by the accident. Other issues, including whether the endorsement affords coverage, are decided in court. See, e.g., New Jersey Manufacturers Ins. Co. v. Franklin, 160 N.J. Super. 292, 297 (App.Div.1978); Government Employees Insurance Co. v. Bovit, 142 N.J. Super. 268, 273 (App.Div.1976), certif. ...