On appeal from Superior Court of New Jersey, Law Division, Bergen County.
Approved for Publication October 22, 1997.
Before Judges Pressler, Conley and Carchman. The opinion of the court was delivered by Conley, J.A.D.
The opinion of the court was delivered by: Conley
The opinion of the court was delivered by
This is another underinsured motorist (UIM) appeal generated by Aubrey v. Harleysville Ins. Co., 140 N.J. 397, 658 A.2d 1246 (1995) ( Aubrey). Defendant appeals a judgment entered in the parties' consolidated actions arising from plaintiff's efforts to obtain UIM coverage as a family member under her father's automobile policy issued by defendant. Pursuant to her complaint seeking UIM coverage, plaintiff obtained a favorable arbitration award in response to which defendant filed a declaratory judgment action in light of Aubrey. As a result, the procedural history of these actions has been extensive and somewhat complex. Ultimately, the two actions were consolidated and, finally by judgment entered December 20, 1996, the trial Judge confirmed the arbitrator's award, rejected defendant's claim that UIM coverage was precluded under Aubrey, and awarded counsel fees to plaintiff pursuant to R. 4:42-9(a)(6). *fn1
The underlying facts relating to plaintiff's pursuit of UIM coverage under her father's policy are as follows. On May 21, 1989, plaintiff was a front seat passenger in an automobile owned and operated by Joseph Manero. At the same time, Lucia Martinez was driving a vehicle travelling in the wrong direction on a one-way street which entered an intersection against a red light and struck Manero's vehicle on the passenger's side. As a result of the accident, plaintiff suffered injuries that required extended medical treatment.
On the day of the accident, plaintiff, then thirty-four, maintained her primary residence at her parents' home. She also rented an apartment which she used when she was required to work evening hours at her job. Defendant conducted an investigation on plaintiff's claim that she was a family member insured and has never disputed that her primary residence was at her parent's home.
Prior to the accident, plaintiff's father, Cornelius Barnett, had purchased an insurance policy from defendant that covered "resident relative(s)" of his household and provided total UIM benefits of $100,000. *fn2 Plaintiff also had her own separate insurance policy with the St. Paul Insurance Company (St. Paul) that provided UIM benefits of $25,000.
Plaintiff subsequently filed a liability action against Martinez and Manero. On January 4, 1991, mandatory, non-binding arbitration was held in plaintiff's case against Martinez and Manero. The arbitrator found that plaintiff was not liable, found that Martinez and Manero were fully liable, awarded plaintiff damages totalling $275,000, and apportioned damages between Martinez and Manero. Yet, Martinez and Manero only had liability policies providing $15,000 in coverage each. Thereafter, on separate occasions between July and August 1991, plaintiff gave St. Paul and defendant notice of her intent to settle the underlying liability action for a total of $29,000. The settlement consisted of the maximum of Martinez's liability coverage and $14,000 of Manero's liability coverage. Defendant then conducted an investigation of Martinez's and Manero's assets, and on October 9, 1991, with notice of plaintiff's UIM claim under her father's policy, defendant authorized plaintiff to accept the settlement. Ultimately, defendant offered to settle her UIM claim for less than the available coverage under her father's policy. Plaintiff rejected that offer and, on September 1, 1993, filed a complaint seeking the full amount she claimed she was entitled to under her father's policy. On plaintiff's order to show cause, the matter was referred to contractual arbitration under the pertinent provisions of the policy.
Pursuant thereto, the award would become final unless it exceeded "the [statutory] financial responsibility limits" and, if so, the right to trial "must be exercised within 30 days of the award." On September 20, 1995, the arbitrators awarded plaintiff $100,000 in damages. Within five days of the arbitrator's award, on September 25, 1995, defendant expressed its rejection of that award. It did so on the sole basis of Aubrey, and on October 31, 1995, filed its declaratory judgment action in reliance on Aubrey. As far as we can tell, defendant did not file a demand for a jury trial until July 1996 as part of its answer to plaintiff's counterclaim in the declaratory judgment action. The matters were consolidated and, finally, the trial Judge rejected defendant's demand for trial de novo and rejected its claim that Aubrey precluded UIM coverage under the father's policy, entering an order enforcing plaintiff's claim under defendant's UIM policy and granting plaintiff counsel fees. This appeal ensued.
On appeal, defendant contends:
THE TRIAL COURT INCORRECTLY INTERPRETED AUBREY V. HARLEYSVILLE AND ERRED IN DENYING THE DEFENDANT'S ...