On appeal from the Superior Court of New Jersey, Law Division, Atlantic County.
Approved for Publication December 23, 1996.
Before Judges Muir, Jr., Kleiner, and Coburn. 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
John Proffitt is the named insured under an automobile liability insurance policy issued by defendant, Prudential Property and Casualty Company of New Jersey. Proffitt's Prudential policy provides $100,000 in underinsured motorist (UIM) coverage. On April 22, 1993, Proffitt, while operating a vehicle owned by One Stop Auto Center (One Stop), was involved in a collision with a motor vehicle owned and operated by Bonnie Jeffers. One Stop was insured under a garage owner's liability insurance policy issued by plaintiff Aetna Casualty & Surety Company providing $500,000 in UIM coverage. Jeffers was insured under an automobile liability insurance policy issued by Lions Insurance Company (Lions), which provided $15,000 per person/$30,000 per accident insurance coverage. Two other individuals were also injured in the collision. Lions determined that Jeffers was the culpable tortfeasor and tendered its entire policy coverage, $30,000, to settle the claims of the three injured parties. Proffitt received $10,000. *fn1 The remaining $20,000 was divided between the other injured claimants.
Proffitt informed both Prudential and Aetna that he intended to pursue a claim for UIM benefits. Although the record on appeal is meager, it appears uncontroverted that Proffitt was not an employee of One Stop. The vehicle owned by One Stop had been entrusted to Proffitt by a One Stop employee for the sole purpose of performing a personal favor for the employee. The record on appeal does not reflect whether the "favor" was for the benefit of One Stop in any way.
After Proffitt asserted a claim for UIM coverage benefits against both Aetna and Prudential, Aetna filed a petition seeking a judicial declaration that Prudential was solely responsible for providing UIM coverage. Prudential filed its answer claiming that it had no responsibility to provide underinsurance benefits because Aetna, the insurer of the "host vehicle," was primarily responsible to Proffitt. Each party filed a motion for summary judgment. The motion Judge, following Aubrey v. Harleysville Insurance Co., 140 N.J. 397, 658 A.2d 1246 (1995), concluded that Prudential, as Proffitt's insurer, was responsible for any UIM payment.
On appeal, Prudential contends that the policy language in each policy of insurance, when construed together, warrants a contrary Conclusion.
Prudential's appeal was filed prior to the reported decision by another panel of this court, American Reliance Insurance Co. v. American Casualty Co., 294 N.J. Super. 238, 683 A.2d 205 (App Div. 1996). In American Reliance, the court relied on our prior decision in Royal Insurance Co. v. Rutgers Casualty Insurance Co., 271 N.J. Super. 409, 418-19, 638 A.2d 924 (App. Div. 1994), in which we held that any question as to the primacy of two policies providing UIM coverage for an accident is to be determined by the terms of the policies.
In American Reliance, an employee, Ordemann, who had her own liability insurance policy with American Reliance Insurance Company, was operating her employers' van while in the course of her employment. The van was insured by American Casualty Company. The issue on appeal focused on which insurance policy provided primary coverage. American Casualty stipulated that Ordemann was covered under the terms of its liability policy, which provided UIM benefits.
The court in American Reliance reasoned:
Unlike Aubrey, the circumstances here involve multiple policies that provide UIM coverage because Ordemann qualifies as an . . . underinsured under those policies. It is the terms of those policies, therefore, that govern. Prudential Property & Casualty Ins. Co. v. Travelers Ins. Co., 264 N.J. Super. 251, 260, 624 A.2d 600 (App. Div. 1993) ("the manner in which multiple policies providing UIM coverage are to be applied in a given circumstance requires the parties to turn to the provisions of the respective policies rather than the statute."). See Royal Ins. Co. v. Rutgers Cas. Ins. Co., 271 N.J. ...