On appeal from the Superior Court of New Jersey, Law Division, Camden County.
Before Judges Kleiner and Braithwaite. The opinion of the court was delivered by Kleiner, J.A.D.
The opinion of the court was delivered by: Kleiner
The opinion of the court was delivered by
This appeal raises a question of first impression in New Jersey: In light of the Supreme Court's decision in Aubrey v. Harleysville Ins. Cos., 140 N.J. 397, 658 A.2d 1246 (1995), may an individual, injured while driving the automobile of another, assert a claim for underinsured motorist (UIM) coverage purchased by a co-habitant family member of the injured individual, where that injured individual does not own an automobile and does not have her own UIM coverage? The motion Judge who was called upon to decide this narrow issue concluded that the injured claimant's demand for underinsured coverage benefits was barred by the decision in Aubrey. On the claimant's appeal from that decision, we conclude that the claimant does, in fact, have an assertible claim for underinsurance benefits. We reverse the summary judgment granted to the insurer on its cross-motion and remand to the trial court for further proceedings.
The facts are not in dispute. On April 3, 1992, defendant Theresa Parisi-Lusardi (Lusardi), a licensed driver, resided with her paramour Vito Moles, in the home of her brother Frank J. Parisi, III (Parisi). Lusardi did not own a motor vehicle either registered in this state or principally garaged in this state and she therefore was not required to obtain automobile insurance. See N.J.S.A. 39:6B-3. On that date, Lusardi was operating Moles' automobile with his permission. Moles' automobile was insured under a comprehensive automobile liability insurance policy issued by State Farm Insurance Company (State Farm). Moles' policy contained an endorsement selected by Moles that provided underinsurance coverage of $100,000 per person. On that same date, Lusardi's brother, Parisi, was insured under a comprehensive automobile liability insurance policy issued by Market Transition Facility, by and through its servicing carrier, Amgro Insurance Company (Amgro). Parisi's policy contained an underinsurance coverage endorsement, selected by Parisi, providing underinsurance benefits of $100,000 per person. Lusardi collided with a motor vehicle owned and operated by David J. Pacuta, also insured by Amgro. Pacuta's policy provided the statutory minimum liability coverage of $15,000 per person/$30,000 per accident. See N.J.S.A. 17:28-1.1a. As a result of the injuries Lusardi sustained in that collision, she asserted claims against State Farm and Amgro. *fn2
Amgro, on behalf of Pacuta, offered to settle Lusardi's personal injury claim for $15,000. Lusardi communicated that offer of settlement to State Farm, on behalf of Moles, and to Amgro, on behalf of Parisi. Lusardi informed both insurers of her intent to pursue a claim for underinsurance benefits. Neither insurer objected to Lusardi accepting Pacuta's settlement offer and ultimately that settlement offer was accepted.
Lusardi thereafter asserted a claim against State Farm and Amgro for underinsurance benefits under the endorsements to the policies issued to Moles and Parisi, respectively. She demanded that her underinsurance claim be submitted to arbitration, as required under the contractual terms of each insurance policy endorsement. Both insurers refused to submit Lusardi's claim to arbitration. Lusardi, utilizing the docket number assigned to the Law Division complaint initially filed, proceeded to file a motion seeking to compel both insurers to submit her underinsurance coverage claim to arbitration. While that motion was pending, the Supreme Court issued its decision in Aubrey. Each insurer then filed a cross-motion for summary judgment separately contending that defendant Lusardi was not entitled to underinsurance benefits. After oral argument on each defendant's cross-motion, the motion Judge granted summary judgment to State Farm but reserved decision on Amgro's cross-motion for summary judgment. The motion Judge thereafter issued a letter opinion granting summary judgment to Amgro. In both decisions, the motion Judge exclusively relied upon Aubrey. Defendant immediately appealed both decisions. *fn3
The UIM statute, N.J.S.A. 17:28-1.1e, provides,
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.
Lusardi, as an injured claimant, first sought compensation for her injuries from Pacuta, the culpable tortfeasor, whose liability insurance provided coverage of only $15,000 per person/$30,000 per accident. Lusardi, as a "family member" of Parisi, then looked to the terms of the Amgro insurance policy issued to Parisi. The Amgro comprehensive automobile liability insurance policy provided in pertinent part:
In return for payment of the premium and subject to all terms of this policy, we agree with you as follows:
A. Throughout this policy, "you" and "your" refer to:
1. The "named insured" shown in the Declarations; and
2. The spouse if a resident of the same household.
UNINSURED MOTORIST COVERAGE - NEW JERSEY
We will pay damages which an "insured" is legally entitled to recover from the owner or operator of an "uninsured motor vehicle" or "underinsured motor vehicle" where such coverage is indicated as applicable in the Schedule or Declarations because of:
1. "Bodily injury" sustained by an "insured" and caused by an accident; and
2. "Property damage" caused by an accident except under paragraph 2. of the definition of "uninsured motor vehicle."
The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the "uninsured motor vehicle" or "underinsured motor vehicle." We will pay damages under this coverage caused by an accident with an "underinsured motor vehicle" only after the limits of liability under any applicable ...