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Rutgers Cas. Ins. Co. v. Ohio Cas. Ins. Co.

April 1, 1997

RUTGERS CASUALTY INSURANCE COMPANY, *FN1 PLAINTIFF-RESPONDENT,
v.
THE OHIO CASUALTY INSURANCE COMPANY, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Camden County.

Approved for Publication April 3, 1997.

Before Judges King, Conley and Loftus. The opinion of the court was delivered by King, P.j.a.d.

The opinion of the court was delivered by: King

The opinion of the court was delivered by

KING, P.J.A.D.

I.

These ten consolidated cases arise from similar factual situations. The legal issue is the right of contribution between automobile insurance carriers paying Personal Injury Protection (PIP) benefits. In each case the person injured in an automobile accident was either the named insured or a resident relative of a named insured under a Rutgers Casualty Insurance Company (Rutgers) policy. Each Rutgers insured was injured while a pedestrian or while a passenger in a vehicle not owned by the Rutgers' insured. The defendant automobile insurance companies Ohio Casualty, West American, Keystone, Prudential and HCM Claim Management Corporation insured the vehicles actually involved in the accident. Each of Rutgers' insureds were also "other insureds" under defendants' automobile policies. N.J.S.A. 39:6A-4.

Rutgers paid its insureds PIP benefits and then sought "contribution" from the defendant insurance carriers under N.J.S.A. 39:6A-11 which states:

If two or more insurers are liable to pay benefits under sections 4 and 10 of this act for the same bodily injury, or death, of any one person, the maximum amount payable shall be as specified in sections 4 and 10 if additional first party coverage applies and any insurer paying the benefits shall be entitled to recover from each of the other insurers, only by inter-company arbitration or inter-company agreement, an equitable pro-rata share of the benefits paid.

The defendant carriers refused to contribute under N.J.S.A. 39:6A-11 because of an "exclusion" in each of their policies. Adopting the parties' expression, we refer to these as the "follow-the-family" exclusion provisions. The Keystone exclusion is typical of the exclusions used by Ohio Casualty, West American, Allstate and HCM. The Keystone policy provides:

Exclusions

The insurance under this endorsement does not apply to bodily injury :

(h) to any person other than the named insured or relative if that person is entitled to New Jersey personal injury protection coverage as a named insured or relative under the terms of another policy;

(i) to any relative if that person is entitled to New Jersey personal injury protection coverage as a named insured under the terms of another policy.

The Prudential policy did not contain a typical "follow-the-family" exclusion but relied upon the following provision to deny contribution:

Conditions

3. Multiple Policies Applicable to One Accident; Non-duplication of Benefits; Priority of Complying Policies.

This insurance applies on a primary basis to bodily injury to the named insured and any relative who is not named insured in another policy, and on a secondary basis to all other eligible injured persons. Similarly, the basic personal injury protection coverage provided by other complying policies applies on a primary basis to bodily injury to those persons who are named insureds under such policies and their relatives. If an eligible injured person to whom this insurance applies on a secondary basis has other basic personal injury protection coverage under another complying policy applicable to bodily injury on a primary basis, all claims for basic personal injury protection benefits shall first be made against the insurer issuing the other complying policy. No basic personal injury protection benefits shall be due and payable under this insurance unless the other insurer fails to pay such benefits by reason of insolvency and the Company has been given written notice by the claimant of such failure. (emphasis added).

We construe this clause as identical in impact to the typical "follow-the-family" exclusion.

Interestingly, Rutgers' policy also contains a similar "follow-the-family" exclusion:

EXCLUSIONS :

The insurance under this endorsement does not apply to bodily injury:

8. To any person other than the named insured or relative if that person is entitled to New Jersey personal injury protection coverage as a named insured or relative under the terms of another policy.

9. To any relative if that person is entitled to New Jersey personal injury protection coverage as a named insured under the terms of another policy.

The Rutgers' policy also contains a provision regarding contribution:

3. Multiple Policies Applicable to One Accident -- Non-duplication of Benefits; Priority ...


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