On appeal from the Superior Court of New Jersey, Law Division, Morris County.
Before Judges Shebell, D'Annunzio and A.a. Rodr¡guez.
The opinion of the court was delivered by: Shebell, P.j.a.d.
Plaintiff, Estate of Carey Leeman ("Estate"), filed for arbitration with the American Arbitration Association ("AAA"), seeking personal injury protection ("PIP") benefits under the automobile policy issued to decedent by defendant, Eagle Insurance Company ("Eagle"). Decedent's medical bills and other relevant discovery was exchanged in preparation for arbitration. On February 2, 1996, Eagle filed an action in the Law Division seeking to enjoin the arbitration proceedings. Eagle asserted that the AAA did not have jurisdiction over the coverage issues presented and sought a declaratory judgment that Eagle did not cover the vehicle decedent was driving at the time of the accident. The Estate took the position that the only issue was whether decedent, at the time of his accident, was driving a vehicle being used for personal, non-commercial purposes, and that the arbitrator could decide this. Thereafter, Eagle expressed a willingness to withdraw its complaint thereby allowing the coverage issue to go before the arbitrator. However, the Estate's counsel then decided to pursue the matter as a PIP suit in Superior Court, rather than in arbitration.
On March 19, 1996, the Estate filed a Complaint for Declaratory Judgment in the Law Division, seeking an order "declaring ... to be entitled to PIP benefits together with any and all recoverable attorney's fees, interest and costs of suit..." Eagle answered on or about May 23, 1996.
On November 13, 1996, Eagle moved for summary judgment. Thereafter, the Estate cross-moved for summary judgment. The Judge denied both summary judgment motions without prejudice so that the parties could conduct further discovery on the issue of what policy form was applicable. Subsequently, both parties renewed their summary judgment motions. On May 2, 1997, oral argument was heard. The Estate stipulated that the policy language that Eagle's counsel offered would control the court's interpretation of coverage. The Judge ultimately held that the Estate was entitled to PIP benefits and entered an order to this effect.
On or about May 14, 1997, the Estate submitted an Affidavit of Services and Costs along with a proposed form of order under the "Five Day Rule," Rule 4:42-1(c). The order provided for $82,713.13 in medical expenses and interest, and attorney's fees of $16,425.50, for a total of $99,138.63. Eagle objected to the proposed order on the grounds that the only relief that the Estate was entitled to was a declaratory judgment on the specific PIP entitlement issue, and not an award of medical expenses. Eagle's counsel argued that the medical bills had not been subjected to the medical fees schedule as required by N.J.A.C. 11:3-29.4, that several of the benefits were incorrectly computed, and that interest was incorrectly calculated because it was based on an improper total outstanding amount. Eagle's counsel also contended that the attorney's fees requested were excessive. The Judge signed the proposed order, reducing the monetary award to $95,689.63, apparently adjusting for an overstated funeral expense benefit assessment. Eagle appeals.
Decedent was involved in a single-vehicle accident on June 7, 1994, while driving a Ford Ranger XLT pick-up truck, owned by his employer, Eastern States Property Management Service ("ESPMS"). Decedent suffered fatal injuries when, while on his way home, the vehicle went out of control, left the roadway, and flipped over.
Four days prior to his accident, on June 3, 1994, decedent dropped off his personal car, a 1968 Chevrolet, at a repair shop. That same day, decedent's employer, ESPMS, loaned him the pick-up truck "because [decedent's]...vehicle was broken down." ESPMS stated it was not common practice for it to loan vehicles to employees; however, an exception was made and the vehicle was loaned to decedent so he could get to and from work.
At the time of the accident, decedent's private passenger vehicle was insured by Eagle. The policy included $250,000 in PIP coverage. The Estate sought PIP benefits from Eagle on the basis that decedent was driving a "temporary substitute vehicle" at the time of his accident because his vehicle was inoperable. Eagle responded that it was only required to pay under the $10,000 extended medical expense benefit ("Med-Pay") portion of decedent's policy. Eagle concluded that PIP benefits were not payable because decedent was injured while driving a commercial vehicle he did not own or regularly use.
Two provisions of decedent's policy are alleged to be applicable to this issue. The first is the following definition of "private passenger automobile," found in the "Personal Injury Protection Endorsement" of decedent's policy:
a self-propelled vehicle designed for use principally on public roads and which is one of the following types:
(1) a private passenger or station wagon type automobile,
(2) a van, a pick-up or panel truck or delivery sedan, or
(3) a utility automobile designed for personal use as a camper or motor home or for family recreational purposes; but
a private passenger automobile does not include a motorcycle; an automobile used as a public or livery conveyance for passengers; a pick-up, panel truck, delivery sedan, van or utility automobile customarily used for business, occupational or professional purposes; other than farming or ranching; or a utility automobile customarily used for ...