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Harmon v. New Jersey Automobile Full Insurance Underwriting Association

Decided: December 1, 1993.

KIMBERLY HARMON AND MICHAEL LANGO, PLAINTIFFS-APPELLANTS,
v.
NEW JERSEY AUTOMOBILE FULL INSURANCE UNDERWRITING ASSOCIATION AND MARKET TRANSITION FACILITY OF NEW JERSEY, DEFENDANTS-RESPONDENTS



On appeal from the Superior Court of New Jersey, Law Division, Bergen County.

Stern, Keefe and Bilder. The opinion of the court was delivered by Keefe, J.A.D.

Keefe

The issue presented by this appeal is this: Can an injured claimant, who carries basic underinsured motorist (UIM) coverage of $15,000/$30,000, claim that the responsible tortfeasor, who also carries basic liability insurance coverage of $15,000/$30,000, is underinsured when the claimant receives less than the tortfeasor's single limit coverage in settlement because there were multiple claimants having claims worth more than $30,000? We conclude that the tortfeasor is not an underinsured in such circumstances, and the injured claimants cannot receive UIM benefits. Thus, we affirm the judgment entered in favor of defendants.

Plaintiff Michael Lango was the operator of a motor vehicle that collided with another vehicle owned and operated by Patricia Okibedi. Plaintiff Kimberly Harmon was a passenger in the Lango vehicle.

At the time of the accident, Okibedi was insured by the Market Transition Facility of New Jersey (MTF) with policy limits for bodily injury of $15,000 per person or $30,000 per accident. MTF offered the full amount of the policy ($30,000), to settle the claims of plaintiffs Lango and Harmon, and a third claim asserted by a passenger in the Okibedi vehicle. Lango received $8,700 of those proceeds and Harmon received $13,200.

At the time of the accident, Lango was insured by the New Jersey Automobile Full Insurance Underwriting Association (JUA) with liability policy limits of $15,000 per person and $30,000 per accident. He also had UIM limits of $15,000/$30,000. Harmon was insured by the MTF with bodily injury liability and UIM limits of $15,000/$30,000.

Following their settlement with Okibedi, plaintiffs sought UIM benefits from their respective insurers. When the MTF and JUA refused to accept such claims, plaintiffs brought this action to compel defendants to arbitrate their UIM claims. Judge Marguerite Simon denied plaintiffs' application and dismissed that portion of their amended complaint which sought UIM benefits.

Plaintiffs appeal from that decision and contend that N.J.S.A. 17:28-1.1e permits them to receive UIM benefits for the difference between the amount received in settlement and their respective $15,000 UIM single limit coverage. We disagree with plaintiffs' argument and affirm essentially for the reasons stated by Judge Simon in her bench opinion of December 18, 1992.

N.J.S.A. 17:28-1.1e provides in applicable part:

A motor vehicle is underinsured when the sum of the limits of liability under all bodily injury and property damage liability bonds and insurance policies available to a person against whom recovery is sought for bodily injury or property damage is, at the time of the accident, less than the applicable limits for underinsured motorist coverage afforded under the motor vehicle insurance policy held by the person seeking that recovery. A motor vehicle shall not be considered an underinsured motor vehicle under this section unless the limits of all bodily injury liability insurance or bonds applicable at the time of the accident have been exhausted by payment of settlements or judgments. The limits of underinsured motorist coverage available to an injured person shall be reduced by the amount he has recovered under all bodily injury liability insurance or bonds[.] [emphasis added.]

Applying the language of the statute to the facts of this case, the "sum of the limits" of the coverage "available to [the] person against whom recovery is sought" (Okibedi) was $15,000/$30,000, which is identical to and, therefore, not "less than the applicable limits for underinsured motorist coverage afforded under the motor vehicle insurance policy held by the person seeking that recovery" (Lango and Harmon). N.J.S.A. 17:28-1.1e. Where the policy limits of the tortfeasor are more "or the same as the underinsured motorist policy limits" then the tortfeasor is ...


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