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Prudential Property & Cas. Ins. Co. v. Monmouth County Mun. Joint Ins. Fund

May 25, 1995

PRUDENTIAL PROPERTY & CASUALTY INSURANCE COMPANY, PLAINTIFF-RESPONDENT,
v.
MONMOUTH COUNTY MUNICIPAL JOINT INSURANCE FUND, DEFENDANT-APPELLANT, AND SCIBAL INSURANCE GROUP AND TIMOTHY HOLMAN, DEFENDANTS.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 274 N.J. Super. 345 (1994).

The opinion of the Court was delivered by Stein, J. Justices Handler, Pollock, O'Hern, Garibaldi, and Coleman join in this opinion. Chief Justice Wilentz did not participate.

The opinion of the court was delivered by: Stein

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

PRUDENTIAL PROPERTY & CASUALTY INSURANCE COMPANY V. MONMOUTH COUNTY MUNICIPAL JOINT INSURANCE FUND, ET AL. (A-98-94)

Argued February 28, 1995 -- Decided May 25, 1995

STEIN, J., writing for a unanimous Court.

The issue on appeal is whether a municipality's insurance carrier (or self-insurance fund) is liable for uninsured-motorist (UM) benefits to a covered employee who also has UM benefits available. under his personal automobile-insurance policy.

In April 1990, Timothy Holman, a Neptune Township (Neptune) police officer, was on duty driving a police vehicle when he was involved in an accident with a hit-and-run driver. At that time, Holman was insured under a personal automobile-insurance policy with Prudential Property & Casualty Insurance Company (Prudential), which provided UM coverage in the amount of $100,000 per person and $300,000 per accident. Neptune was insured by Monmouth County Municipal Joint Insurance Fund (JIF), a municipal self-insurance fund, which provided UM coverage for Neptune and its employees in the amount of $200,000 per person and accident.

In May 1992, Holman filed for UM arbitration under the Prudential and JIF policies, seeking UM benefits for his injuries caused by the hit-and-run driver. In September 1992, Prudential filed with the Law Division a complaint for declaratory judgment, claiming that any arbitration award for UM benefits should be prorated between it and JIF, pursuant to the UM statute, N.J.S.A. 17:28-1.1c. JIF contended that the Tort Claims Act, specifically N.J.S.A. 59:9-2e, required that Holman exhaust his coverage with Prudential before seeking payment for any arbitration award from JIF.

On cross-motions for summary judgment, the trial court held that because UM claims are contractual obligations on the part of the insurer, the Tort Claims Act was not applicable and that the UM statute required proration between Prudential and JIF of any arbitration award to which Holman might be entitled.

On appeal, the Appellate Division affirmed the decision of the trial court, relying on case law that held that N.J.S.A. 59:9-2e did not provide authority for the Conclusion that a municipality's underinsured motorist (UIM) coverage was excess over the injured employee's personal insurance coverage and that there is no distinction between UIM and UM coverage.

The Supreme Court granted certification.

HELD: Where a public-entity employee is injured while working by an uninsured motorist, and seeks UM benefits from both the public entity's insurer and his or her personal-insurance carrier, any arbitration award of UM benefits must be prorated pursuant to the UM statute, N.J.S.A. 17:28-l.1c.

1. The Court affirms the decision of the Appellate Division substantially for the reasons expressed in that court's opinion, but adds ...


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