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Maimone v. Liberty Mut. Ins. Co.

June 24, 1997

RAYMOND MAIMONE, PLAINTIFF-RESPONDENT,
v.
LIBERTY MUTUAL INSURANCE COMPANY, DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT, V. IFA INSURANCE COMPANY, THIRD-PARTY DEFENDANT-APPELLANT.



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

Approved for Publication June 26, 1997.

Before Judges Petrella and Kimmelman. The opinion of the court was delivered by Kimmelman, J.A.D.

The opinion of the court was delivered by: Kimmelman

The opinion of the court was delivered by

KIMMELMAN, J.A.D.

This appeal involves a dispute between two insurance carriers as to which of the two is responsible as the primary carrier and which is responsible as the excess carrier with respect to underinsured motorist (UIM) benefits for injuries suffered by plaintiff.

While driving a non-owned vehicle (host vehicle) with the consent of the owner, plaintiff was involved in a collision and sustained personal injuries. The tortfeasor had minimal coverage and, pursuant to Longworth *fn1 approval, plaintiff settled his claim against the tortfeasor for the maximum amount available. The owner of the host vehicle was insured by defendant/third-party plaintiff Liberty Mutual Insurance Company (Liberty Mutual) with UIM coverage of $100,000. Third-party defendant IFA Insurance Company (IFA) insured plaintiff's personal vehicle with UIM coverage of $250,000 per person/$500,000 per accident.

Plaintiff filed an action against Liberty Mutual seeking to declare it the carrier primarily responsible for UIM benefits and to compel UIM arbitration. Liberty Mutual answered and filed a third-party complaint against IFA. Liberty Mutual then moved for summary judgment relying upon Aubrey v. Harleysville Ins. Co., 140 N.J. 397 (1995), for the proposition that IFA, as plaintiff's personal carrier, was responsible to pay his UIM benefits. IFA cross-moved for summary judgment contending that the "Other Insurance" provision of its policy renders Liberty Mutual's UIM coverage primary and IFA's UIM coverage excess. The trial Judge granted Liberty Mutual's motion holding that IFA was the primary UIM carrier.

IFA appeals contending that American Reliance Ins. Co. v. The American Cas. Co. of Reading, 294 N.J. Super. 238 (App. Div. 1996), and Royal Ins. Co. v. Rutgers Cas. Ins. Co., 271 N.J. Super. 409 (App. Div. 1994), provide for the enforceability of "Other Insurance" clauses in insurance contracts. We reverse and hold that Liberty Mutual is primarily liable.

At the outset we note, as counsel have pointed out, that there are conflicting decisions rendered by different panels of this court with respect to the same or similar issues as here presented.

In Frankel v. Motor Club of America Ins. Co., 298 N.J. Super. 250 (App. Div. 1996), the injured plaintiff was a passenger in the insured vehicle rather than the driver of a host vehicle as here. In Frankel, the injured plaintiff's personal insurer was Motor Club and her policy carried UIM coverage of $50,000. The vehicle in which she was a passenger was covered by a $100,000 UIM coverage policy issued by Harleysville Insurance Company. Primary coverage was denied by each. The Law Division ruled that the injured plaintiff was entitled to resort only to the Motor Club UIM coverage which she had purchased for herself. Motor Club appealed contending that the "Other Insurance" provision of its policy mandated that Harleysville be deemed the carrier primarily responsible for UIM coverage for plaintiff and placed reliance upon our pre-Aubrey decision in Royal Insurance Co. v. Rutgers Casualty Insurance Co., 271 N.J. Super. 409 (App. Div. 1994).

In Royal, the injured claimants' personal insurance policy with Royal contained an "Other Insurance" provision as follows:

For any covered auto you own this policy provides primary insurance. For any covered auto you don't' own, the insurance provided by this policy is ...


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