On appeal from the Superior Court Law Division, Middlesex County.
Long, D'Annunzio and Keefe. The opinion of the court was delivered by Keefe, J.A.D.
The issues presented by this appeal are: 1) whether the New Jersey Tort Claims Act, specifically N.J.S.A. 59:9-2(e), renders the underinsured motorist provisions (UIM) of a governmental entity's automobile insurance policy excess over the UIM provisions of the injured employee's personal insurance policy, and 2) if not, whether the UIM coverage afforded under both policies must be prorated in accordance with N.J.S.A. 17:28-1.1c. We hold that the provisions of N.J.S.A. 59:9-2(e) and N.J.S.A. 17:28-1.1c are irrelevant to the question of whether the governmental entity's UIM coverage is excess, concurrent or prorated with the injured employee's personal insurance policy.
The facts are not in dispute. Cris Tucci was employed as a police officer by the Borough of Roselle Park on March 11, 1989, when he was involved in an automobile accident with Andrzej Ratkiewicz. Tucci was operating a police vehicle owned by the Borough of Roselle Park at the time. The Ratkiewicz vehicle was insured by Hanover Insurance for personal injury liability indemnity in the amount of $15,000 per person/$30,000 per accident.
Hanover paid its single limit indemnity coverage in the amount of $15,000 to Tucci.
The Roselle Park police vehicle was insured by defendant Travelers Insurance Company. The policy contained $1,000,000 uninsured/underinsured motorist coverage. Travelers admits that Tucci was a covered person under the UIM provisions of its policy. At the same time, Tucci was an insured under a personal insurance policy issued by plaintiff Prudential Property and Casualty Insurance Company (Prudential) which contained uninsured/underinsured motorist coverage in the amount of $100,000. Tucci instituted arbitration proceedings against Prudential and Travelers, seeking UIM benefits on the grounds that his injuries exceed the $15,000 he received from Hanover.
A three member arbitration panel awarded Tucci $75,000. The gross award was reduced by 25% representing Tucci's contributory negligence, and by another $15,000, representing the amount paid Tucci by Hanover. Thus, the net award to Tucci was $41,250.
A dispute arose between Prudential and Travelers concerning their relative contribution to Tucci's award. Prudential instituted a declaratory judgment action against Travelers.*fn1 In the declaratory judgment action, Prudential maintained that the Travelers policy provided UIM coverage to Tucci as a permissive user of the police vehicle, and that the UIM coverage provided by Travelers must be prorated with Prudential's coverage pursuant to N.J.S.A. 17:28-1.1(c). Travelers maintained in its answer and counterclaim that, while Tucci was a covered person under the Travelers UIM endorsement, Prudential's UIM coverage was "primary" while the Travelers coverage was "secondary and excess" over that of Prudential.
Travelers moved for summary judgment and Prudential cross-moved. The Law Division Judge, relying essentially on an unreported opinion of this court in Urban v. Harleysville Insurance Company, et al, A5880-88, decided June 11, 1990, held that the
Tort Claims Act did not apply to this fact situation, and that coverage must be prorated under N.J.S.A. 17:28-1.1. Thus, he granted Prudential's cross-motion for summary judgment from which Travelers now appeals. For the reasons stated herein, we affirm that part of the judgment which holds that the Tort Claims Act is inapplicable, but ...