The opinion of the court was delivered by: Donio
This matter comes before the court on an order to show cause to compel the defendant, CNA Insurance Company to submit to UIM arbitration. This is an Aubrey v. Harleysville Ins. Co., 140 N.J. 397, 658 A.2d 1246 (1995), type of case dealing with UIM insurance.
The facts of the case are not really in dispute. The matter arises out of a motor vehicle accident which occurred on August 26, 1989, in Atlantic City, New Jersey. At that time, a step van operated by plaintiff, Jeffrey Williamson (Williamson) collided with an automobile operated by David Nasrin (Nasrin). At the time of the accident, Williamson was a high school student 17 years of age who lived with his mother, Eileen Williamson, and was insured under his mother's personal automobile policy which was issued by Allstate Insurance Company (Allstate). The step van operated by Williamson at the time of the accident was owned by his employer, Ronald Beaver (Beaver) and insured under a business auto policy issued by the defendant, CNA Insurance Company (CNA). The automobile operated by Nasrin was a rental vehicle leased by Frederick Carozza, and insured under Carozza's personal auto policy issued by Allstate.
Plaintiff settled his personal injury action against Nasrin for $100,000, which was the maximum amount available under Carozza's Allstate policy and now seeks UIM benefits under Beaver's CNA policy which carried UIM limits of $300,000. Plaintiff filed an order to show cause to compel CNA to proceed to UIM arbitration. Defendant CNA filed opposition to the order to show cause stating that plaintiff Williamson is not entitled to UIM benefits under the CNA policy issued to Beaver as the named insured for his bread delivery business.
The issue thus presented is whether or not a minor plaintiff who does not own his own automobile and is insured under his mother's automobile policy is limited to UIM coverage under that policy or whether he can seek the benefit of his employer's automobile policy when involved in an accident driving his employer's vehicle as a permissive user.
The Allstate policy that covered Williamson through his mother provided UIM coverage in the amount of $50,000. The CNA policy that provided coverage on the vehicle in which Williamson was driving contained UIM coverage in the amount of $300,000. CNA opposes the application for an order to show cause to compel the UIM arbitration by arguing that Aubrey prohibits plaintiff Williamson from seeking UIM benefits under the CNA policy. Plaintiff Williamson argues that the facts of this matter are distinguishable from Aubrey and that Aubrey does not control the resolution of this issue.
In Aubrey, the injured claimant had purchased her own automobile insurance, including an UIM endorsement providing coverage of $15,000/$30,000. Aubrey was injured while operating a vehicle that she intended to purchase from Chris Koch Toyota after securing a financing arrangement. Id. at 399. Aubrey contended that she was entitled to recover UIM benefits under the UIM provisions of the Koch garage policy, which provided $1,000,000 in UIM coverage. The court denied Aubrey's claim and concluded that the amount of UIM coverage held by her as the person seeking recovery was $15,000.
Accordingly, she could reasonably expect UIM coverage in that amount. When she purchased her UIM coverage, Aubrey could not reasonably have anticipated the possibility of receiving benefits under UIM endorsements issued in favor of Koch. To allow her to recover under Koch's UIM policy would distort the meaning of an insured's "reasonable expectation."
To determine the scope of coverage under an insurance policy one must initially look at the plain language of the policy. The pertinent part of Beaver's CNA policy under definitions of WHO IS INSURED states as follows:
(2) anyone else as an insured while using with your permission a covered auto you own, hire or borrow . . .
The closest factual analysis to the present case is Prudential Property and Casualty Ins. Co. v. Travelers Ins. Co., 264 N.J. Super. 251, 624 A.2d 600 (App. Div. 1993). In that case, the injured claimant, Chris Tucci, was employed as a police officer by the Borough of Roselle Park. Tucci was also insured under a personal insurance policy that contained an UIM endorsement providing coverage in an amount of $100,000. The Borough's police vehicle was insured with an UIM endorsement providing coverage in an amount of $1,000,000. Tucci was injured when his borough police vehicle collided with a ...