On appeal from the Superior Court of New Jersey, Law Division, Ocean County.
Shebell, Skillman and D'Annunzio. The opinion of the court was delivered by Shebell, J.A.D.
Plaintiffs, David Handler and Ann Handler, appeal from a summary judgment in their action to compel defendant, State Farm Mutual Automobile Insurance Co. (State Farm), to provide them with underinsured motorists coverage under a policy of automobile insurance issued to Charmaine Handler with limits of $100,000.
David Handler, on November 22, 1989, was a passenger in his own 1978 Cutlass Oldsmobile. The vehicle, being operated by his daughter, Jill Handler, on Route 537 in Colts Neck, New Jersey, swerved to avoid striking an animal, drove through a fence and struck a tree. David sustained severe and permanent personal injuries in this accident. At the time of the accident, David owned three passenger vehicles all insured through Electronic Data Systems, as servicing carrier for the New Jersey Automobile Full Insurance Underwriting Association, with coverage of $15,000/$30,000/$10,000.
Less than two months earlier, on September 30, 1989, State Farm had issued an automobile insurance policy to Charmaine Handler, plaintiffs' former daughter-in-law. Charmaine, at that time, was residing with her three infant children at the Lincroft, New Jersey home of the plaintiffs, who were the children's paternal grandparents.
Charmaine had married Mark, plaintiffs' oldest son, on December 31, 1983. The young couple had three infant children. While Mark Handler was in the Navy, from July, 1985, to July, 1987, Charmaine lived with his parents. However, Charmaine and Mark separated in early 1988, after living at another location for several months. After the separation, Charmaine returned with the three children to live with the plaintiffs in Lincroft. She obtained a final judgment of divorce in Maryland on August 29, 1989.
In August of 1989, before the divorce was final, Charmaine became engaged to Michael Handler, plaintiffs' second oldest son, who was living at the Handler's home. They purchased an engagement ring, opened a joint checking account, and on September 30, 1989, jointly purchased a Plymouth Voyager van, the vehicle named in the State Farm policy in question. The State Farm premiums were paid by Charmaine and Michael out of their joint checking account. The vehicle was, however, titled only in Charmaine's name, and she was the only named insured on the policy.
A claim for underinsured motorist coverage presented to State Farm on behalf of plaintiffs was denied. State Farm asserted "Charmaine Handler was divorced from Mark Handler on the date of the loss, [and therefore] Ms. [Charmaine] Handler would not be considered a relative of Mr. (David) Handler." Thus, on November 22, 1989, David Handler was no longer Charmaine's relative since she was not married to Mark Handler.
The State Farm policy, as it pertained to uninsured and underinsured motorist coverage stated the following in relevant part:
Insured -- means the person or persons covered by uninsured and underinsured motorist coverage. This is: