On appeal from the Superior Court of New Jersey, Law Division, Bergen County.
Approved for Publication March 14, 1997. As Corrected April 3, 1997.
Before Judges Michels and Kleiner. The opinion of the court was delivered by Michels, P.j.a.d.
The opinion of the court was delivered by: Michels
The opinion of the court was delivered by
Defendant New Jersey Automobile Full Insurance Underwriting Association (the NJAFIUA) appeals from three orders of the Law Division entered in this insurance coverage matter which, among other things, (1) denied its motion for summary judgment against plaintiff Gregory B. Evangelou (Evangelou) and declared that defendant Spartaco V. Terzano (Terzano) was its agent; (2) determined, following a bench trial, that Evangelou was entitled to reformation of his automobile insurance policy issued by the NJAFIUA to include increased limits of uninsured and underinsured motorist coverage (UM/UIM); and (3) denied its motion to restore this matter to the active trial list.
A summary of the facts and procedural history involved in this unduly complicated matter is helpful to a resolution of the issues raised on this appeal. Plaintiff instituted this action against the NJAFIUA and Terzano, the producer of record for the NJAFIUA. Plaintiff charged that Terzano failed to advise him when he obtained the NJAFIUA automobile liability insurance policy of the availability of increased limits of UM/UIM coverage. Plaintiff sought to reform the NJAFIUA automobile policy to include the increased limits of UM/UIM coverage and to recover damages he sustained as a result of an automobile accident with an underinsured motorist over and above the amount he received in an underlying tort action against the motorist.
Terzano denied that he was under any liability to plaintiff and filed a cross-claim against the NJAFIUA. The NJAFIUA also denied liability to plaintiff and filed a cross-claim against Terzano for indemnification and contribution. Thereafter, the NJAFIUA moved for summary judgment against plaintiff, seeking a dismissal of his complaint, and against Terzano, seeking a dismissal of the latter's cross-claim. Terzano also moved to dismiss plaintiff's complaint. On September 20, 1993, following argument, the trial court entered the following order:
A. The Motion of Defendant, NJAFIUA for Summary Judgment dismissing Plaintiff's Complaint and Defendant Terzano's Cross-Claim, shall be and hereby is denied;
B. It shall be and hereby is established that Defendant, Terzano[,] was the agent of Defendant, NJAFIUA;
C. The Cross-Motion of Defendant, Terzano, shall be and hereby is dismissed.
Following a bench trial which only involved plaintiff's claim for reformation of the NJAFIUA policy, the trial court on January 28, 1994, entered an "Order for Judgment of Reformation and Further Proceedings," which ordered
[that] Judgment shall be and hereby is entered for the Plaintiff, Gregory B. Evangelou, and against the Defendant, New Jersey Automobile Full Insurance Underwriting Association reforming the automobile insurance policy issued by Royal Insurance Company on behalf of New Jersey Automobile Full Insurance Underwriting Association under Policy No. UDATY7844 to provide uninsured motorist coverage of $250,000.00 for each person and $500,000.00 for each accident, upon the condition that Plaintiff shall pay the premium for such increased policy limits;
On February 25, 1994, the NJAFIUA appealed the September 20, 1993 order finding Terzano to be its agent. On March 29, 1994, on Terzano's motion, we dismissed the NJAFIUA's appeal because the September 20, 1993 order was interlocutory rather than a final order or judgment.
Following the court-ordered arbitration on January 4, 1995, plaintiff was awarded $80,000 against the NJAFIUA. Since plaintiff had recovered $15,000 in his underlying personal injury action against the underinsured motorist, the award was reduced to $65,000.
On March 27, 1995, the NJAFIUA moved for an order pursuant to R. 4:42-2 to revise the prior order of January 28, 1994, that reformed its policy with plaintiff to provide increased UM/UIM coverage for him. In support of its motion, the NJAFIUA argued that insurers, agents, and brokers were immune from liability for failure to advise customers or insureds of additional or increased limits of UM/UIM coverage pursuant to N.J.S.A. 17:28-1.9, noting that the statute had been recently construed by Strube v. Travelers Indem. Co. of Ill., 277 N.J. Super. 236, 649 A.2d 624 (App. Div. 1994), aff'd o.b., 142 N.J. 570, 667 A.2d 188(1995), to apply retroactively. Alternatively, the NJAFIUA sought an order declaring that it was entitled to contractual indemnification from Terzano and a stay of the payment of the arbitration award of $65,000, pending appeal of the issues of agency and reformation.
On April 28, 1995, the trial court granted the NJAFIUA's motion and issued the following order:
A. Judge Napolitano's Order of January 28, 1994 shall be revised to reflect that plaintiff is not entitled to a reformation of his insurance policy and that plaintiff's Complaint and any and all crossclaims ...