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Brown v. Selective Insurance Co.

May 04, 1998


Before Judges Dreier, Keefe and Wecker.

The opinion of the court was delivered by: Keefe, J.A.D.

[9]    Submitted March 24, 1998

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

The issue presented by this appeal requires an interpretation of N.J.S.A. 17:28-1.1c insofar as it addresses the rights of uninsured motorist (UM) carriers to pro rata contribution where a claimant has UM coverage "available" under more than one insurance policy.

Specifically, the question presented is whether a UM carrier, providing UM coverage to the host vehicle, is entitled to pro rata contribution from the claimant's personal UM carrier where neither the claimant nor the host's UM carrier has given notice of the claim to the personal UM carrier in sufficient time for the personal UM carrier to ptotect its subrogation rights against the uninsured tortfeasor. We hold that the host carrier is not entitled to such contribution as a matter of right under N.J.S.A. 17:28-1.1c and affirm the judgment under review.

Plaintiff, Tim Brown, was employed as a police officer by the Edison Township Police Department on June 2, 1989. *fn1 On that date, plaintiff stopped a motorist, later identified as John Garrett, while patrolling the Route 1 corridor in Edison. Plaintiff parked his squad car in the far right lane behind the motorist, exited his vehicle, and proceeded to approach the driver's side of the stationary automobile. While alongside of the stopped vehicle, Garrett allegedly thrust open the driver's side door, striking plaintiff. Subsequently, Garrett attempted to drive off, striking plaintiff a second time with the automobile and dragging plaintiff several feet. As a result of this accident, plaintiff allegedly sustained personal injuries. It was later discovered that Garrett was uninsured.

At the time of the accident, defendant Atlantic Employer's Insurance Company (Atlantic) insured Edison Township. During the same period, defendant Selective Insurance Company (Selective) provided insurance coverage, including UM coverage, to plaintiff for vehicles personally owned by him. Plaintiff apparently made a UM claim against Atlantic, which was denied for reasons not relevant to this litigation. Plaintiff, however, did not notify Selective of his UM claim until February 7, 1994, when his attorney wrote a claim letter to Selective. Selective denied coverage, claiming lack of proper notice and prejudice to its subrogation rights.

In the face of a denial of UM benefits from both Atlantic and Selective, plaintiff instituted suit against both insurers. *fn2 Atlantic moved for summary judgment, seeking a declaration that it did not cover plaintiff for UM benefits. Plaintiff cross moved for summary judgment, seeking a declaration of coverage only as to Atlantic. Judge Sullivan denied Atlantic's motion for summary judgment and granted plaintiff's motion. The order was entered on October 4, 1996.

Selective then moved for summary judgment on the ground that plaintiff's failure to give notice of his UM claim to Selective irrevocably prejudiced Selective's subrogation rights. The motion was granted, and an order was entered on January 10, 1997. Atlantic appeals only from the judgment entered on January 10, 1997.

Atlantic argues on appeal that the trial court's decision to assign Atlantic the sole burden of providing UM benefits to plaintiff, "while forgiving Selective from its statutory obligation to provide similar coverage under a concurrent UM policy, falls in direct conflict with N.J.S.A. 17:28-1.1." Specifically, Atlantic points to the provisions of N.J.S.A. 17:28-1.1c, which requires proration among UM insurers who provide coverage for a particular claim, and contends that the dismissal of the plaintiff's suit against Selective "relieved Selective from fulfilling a statutory responsibility to contribute pro rata UM benefits to Plaintiff." We disagree with Atlantic's argument.

Atlantic is correct in stating that N.J.S.A. 17:28-1.1 contains the relevant statutory provisions regarding UM coverage. Nonetheless, the statute does not attempt to regulate all facets of that coverage. Thus, "[t]he overriding reality . . . is that . . . [the insured's] rights under a UM endorsement are governed by the contract with the UM carrier." Riccio v. Prudential Property & Cas. Ins. Co., 108 N.J. 493, 499 (1987). The terms of the contract will govern so long as they are not in conflict with the provisions of the statute or its underlying policy. See, e.g., Ciecka v. Transamerica Ins. Group, 81 N.J. 421 (1979).

The Selective policy, as does the standard UM endorsement, requires that the claimant promptly notify Selective of the particulars of the accident for which the UM claim is made. One of the objects of the notice requirement is to preserve Selective's subrogation rights. Indeed, the Selective policy provides that the claimant "shall do . . . [w]hatever is necessary to enable [Selective] to exercise [its] rights" with respect to subrogation. That requirement is in accord with our statutory law protecting an UM insurer's right of subrogation.

Uninsured motorist coverage shall be subject to the policy terms, conditions and exclusions approved by the Commissioner of Insurance, including, but not limited to, unauthorized settlements, ...

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