On appeal from the Superior Court of New Jersey, Law Division, Ocean County.
Approved for Publication May 22, 1995.
Before Judges Michels, Stern and Keefe. The opinion of the court was delivered by Keefe, J.A.D.
The opinion of the court was delivered by: Keefe
The issue on appeal is whether an excess insurance policy purchased by a self-insured municipality, to pay all claims above 4 a fixed amount arising out of accidents involving motor vehicles owned by the municipality, provides UIM primary coverage when the municipality has elected not to provide basic underinsured (UIM) benefits in connection with its motor vehicles.
Plaintiff Anthony Arico ("Plaintiff") appeals from a summary judgment order in favor of defendants Township of Brick, (Brick), Gallagher Bassett Services, (Gallagher), and International Surplus Lines Insurance Company, (Surplus). Plaintiff argues that the injuries he suffered as a result of an accident while employed as a sanitation worker for Brick should be covered by Brick's excess insurance policy purchased from Surplus.
Plaintiff was injured as he rode on the back of a sanitation truck during the course of his employment for Brick. The truck was rear-ended by a vehicle driven by Brian McBride and owned by Lorraine Ratta. Plaintiff filed a complaint against McBride and Ratta and received $100,000 in settlement, the extent of Ratta's policy. Plaintiff also filed a workers' compensation claim petition, and received a $30,000 recovery by way of a N.J.S.A. 34:15-20 settlement.
As the claims between plaintiff and Ratta were being resolved, plaintiff sent a notice letter for UIM coverage to Brick's carrier. Plaintiff then filed a verified complaint against Brick, its insurance administrator Gallagher, and Surplus.
At the time of the accident, Brick was self-insured. However, Brick has not applied for a self insurance certificate from the State of New Jersey, N.J.S.A. 39:6-54(b), nor has it established a self insurance fund under N.J.S.A. 40A:10-6. Gallagher was retained as its claims and insurance administrator. Brick purchased an insurance policy from Surplus which contained the following pertinent provisions:
The Limits of Liability provided under this insurance shall be per the limits scheduled, but only excess of:
$50,000 ultimate net loss each claim, but not exceeding $50,000 ultimate net loss each occurrence, and, $175,000 annual aggregate ultimate net loss.
Ultimate net loss is defined as the sum of:
a) the sum of the losses sustained by the insured after making deductions for all ...