On appeal from the Superior Court, Law Division, Bergen County.
Petrella, O'Brien and Havey. The opinion of the court was delivered by O'Brien, J.A.D.
Pacific Employers Insurance Company (PEIC) appeals from a summary judgment finding it liable under its excess blanket catastrophe liability (umbrella) policy to pay to plaintiff as an insured the portion of his claim in excess of underinsured coverage provided by the underlying policies. We reverse.
On February 11, 1986, 25 year old Harold Stiefel (plaintiff) suffered injuries in a collision with a vehicle operated by defendant Brunel Joseph (Joseph). Joseph's car was insured by
a liability policy with coverage for bodily injury in the minimum statutory amount of $15/30,000. As a result of his injuries, plaintiff underwent a laminectomy and fusion of his lumbar spine at L5-S1. He continues to suffer bilateral lumbosacral radiculopathy among other sequelae of the collision. He has also been diagnosed as suffering cervical radiculopathy as a result of disk pathology at the C1 level. Thus he claims the value of his damages exceeds the Joseph policy limits.
The vehicle plaintiff was driving had been leased by his employer, Eric Schuster Corporation (Schuster), from defendant Motorlease Corporation (Motorlease). The lease required Motorlease to obtain insurance for all vehicles leased to Schuster. Such a policy was obtained by Motorlease from Home Indemnity Company (Home). That policy contains a provision for uninsured motorist coverage in those states where coverage is mandatory by law. The policy provides that the company's limit of liability for this coverage shall be the minimum limits as defined by each state law. As to certain lessees, but not Schuster, the uninsured motorist coverage was increased beyond minimum limits.
Schuster obtained a business automobile policy through their broker, defendant Cobb, Norton & Toma, Inc. (Cobb), from Newark Insurance Company (Newark). This policy provides liability insurance in the amount of $500,000 and originally provided uninsured motorist coverage in the total amount of $35,000, later increased to $100,000, which admittedly covered plaintiff's accident.
After Motorlease obtained the Home policy, it also obtained an umbrella policy in the face amount of $15,000,000 from PEIC which is entitled "Excess Blanket Catastrophe Liability Policy." In that policy an insured is defined to include the named insured and "any person, organization . . . to whom or to which the Named Insured is obligated by virtue of a written contract or permit to provide insurance such as is afforded by the terms of this policy." It also contains a definition of insured as, "any
person while using with the permission of the Named Insured any automobile . . . owned by, loaned to or hired for use by or on behalf of the Named Insured." It is not disputed that this policy provided coverage for plaintiff while operating Motorlease's automobile.
The problem arises because plaintiff alleges that the magnitude of his injuries are such that the amount of recovery he anticipates will exceed the minimum liability coverage of the Joseph policy in the amount of $15,000 and the uninsured motorist coverage of $100,000*fn1 provided in the Newark policy issued to Schuster.*fn2
Plaintiff's complaint, filed on February 11, 1986, joined as defendants in addition to Joseph, Motorlease, Home, Newark and Cobb, Bayly, Martin and Fay of Connecticut, Inc., who were agents for the Home insurance policy. Answers were filed on behalf of all defendants followed by several motions. Summary judgments were granted to Bayly, Martin and Fay of Connecticut, Inc. and Home on October 25, 1988, which have not been appealed. In the same order motions for summary ...