On appeal from Superior Court of New Jersey, Law Division, Camden County.
Approved for Publication April 8, 1997. As Corrected May 20, 1997.
Before Judges Petrella, Landau and Kimmelman. The opinion of the court was delivered by Petrella, P.j.a.d.
The opinion of the court was delivered by: Petrella
The opinion of the court was delivered by
Plaintiff Universal Underwriters Insurance Company, Recreational Products Insurance Division (Universal) and defendant David Marshall (Marshall) filed separate appeals *fn1 from the grant of summary judgment to defendant New Jersey Manufacturers Insurance Company (NJM). The motion Judge held that NJM was not required to participate under its automobile insurance policy in underinsured motorist (UIM) coverage arbitration for an injury to Marshall incurred during the operation of his motorcycle. The appeals are consolidated for the purpose of this opinion.
Universal sought declaratory judgment against NJM and Marshall, claiming he was insured by both companies and requesting that NJM participate on a pro rata basis in any potential award to Marshall under UIM coverage. On cross-motions for summary judgment, the Judge concluded that "from the totality of all of the circumstances" there was no coverage under Marshall's personal automobile policy issued by NJM. On review of both Universal's and NJM's policies and in light of the appropriate legal principles, we disagree and reverse.
On August 3, 1994, Marshall was injured in an motor vehicle accident on West Canal Road in Franklin Township when Bartel Scheckinger crossed the road's center line and hit Marshall, who was riding his motorcycle. Scheckinger's automobile insurance carrier, Maryland Casualty Insurance Company (MCIC), settled with Marshall for its policy limit of $15,000. Marshall asserts that his medical expenses exceed that amount.
Marshall had a "Motorcycle Policy" with Universal insuring his 1993 Harley Davidson motorcycle, and providing liability and UIM coverage of $100,000 each and $300,000 per accident. *fn2 Additionally, Marshall owned a 1987 Jeep and 1992 Plymouth automobile insured by NJM with a UIM limit of $500,000. The NJM policy expressly excludes any liability coverage "for the ownership, maintenance or use of: any motorized vehicle having fewer than four wheels."
Our function in construing the provisions of an insurance contract is to give effect to the parties' intent as evidenced by the terms used by them. Sinopoli v. North River Ins., 244 N.J. Super. 245, 250-251, 581 A.2d 1368 (App. Div. 1990), certif. denied, 127 N.J. 325 (1991); see also Jacobs v. Great Pacific Century Corp., 104 N.J. 580, 582, 518 A.2d 223 (1986); Atlantic Northern Airlines, Inc. v. Schwimmer, 12 N.J. 293, 301, 96 A.2d 652 (1953). An insurance policy that is clear and unambiguous should be enforced as written. Royal Ins. Co. v. Rutgers Cas. Ins. Co., 271 N.J. Super. 409, 416, 638 A.2d 924 (App. Div. 1994).
Any ambiguity found in the policy should be construed against the insurer and "exclusionary clauses should be strictly construed." Sinopoli v. North River Ins., (supra) (244 N.J. Super. at 250); New York State Higher Educ. Services Corp. v. Lucianna, 284 N.J. Super. 603, 608, 666 A.2d 173 (App. Div. 1995). "If the controlling language of an insurance policy supports two interpretations, one favorable to the insurer and the other favorable to the insured, courts are obligated to adopt the interpretation supporting coverage." Watson v. Agway Ins. Co., 291 N.J. Super. 417, 423, 677 A.2d 788 (App. Div. 1996) (citing Salem v. Oliver, 248 N.J. Super. 265, 271, 590 A.2d 1194 (App. Div. 1991), aff'd o.b., 128 N.J. 1, 4, 607 A.2d 138(1992)).
Marshall is the named insured on the Declaration page of NJM's automobile policy. That page indicates that the policy provides him $500,000 in UIM coverage. It is undisputed that Marshall was injured in an automobile accident with an underinsured motorist. *fn3 NJM's underinsured motorist provision defines an underinsured motor vehicle as a "land motor vehicle or trailer of any type to which a liability ... policy applies at the time of the accident but its limit is less than the limit of liability for this coverage...." UIM coverage extends to:
compensatory damages which an Insured is legally entitled to recover from the owner or operator of an ... underinsured motor vehicle where such coverage is indicated as applicable in the Declarations because of:
1. Bodily Injury sustained by an Insured and caused by an accident....
The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the ... 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 liability bonds or policies have been exhausted....
NJM's policy by its terms provides UIM coverage for Marshall because the bodily injuries he sustained were caused by an accident with an underinsured motorist. *fn4
What is not so clear, is the effect of Marshall's purchase of UIM insurance with another carrier, Universal. The UIM provisions of Part C of Universal's policy, as amended by endorsement, *fn5 state:
We will pay damages which a covered person 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 ...