Before Judges Shebell, A.a. Rodr¡guez and Coburn.
The opinion of the court was delivered by: Coburn, J.A.D.
This is a declaratory judgment action involving the parties' rights under an automobile insurance policy. *fn1 Plaintiffs, Gary and Barbara Campbell, assert a right to arbitrate claims for uninsured motorist or underinsured motorist benefits against their carrier, defendant Lion Insurance Company ("Lion"). The only defense raised at trial by Lion was an exclusion of coverage expressed by the policy in the following terms:
A. We do not provide coverage under this endorsement [for uninsured or underinsured motorist coverage] for "property damage" or "bodily injury" sustained by any person:
3. When "your covered auto" is being used to carry persons or property for a fee. This exclusion does not apply to a share-the-expense car pool.
At the Conclusion of a bench trial, the Law Division Judge ruled in favor of plaintiffs. The judgment provided, "Lion Insurance Company shall provide Uninsured/Underinsured Motorist Coverage to the plaintiff and shall select an arbitrator according to the terms of the policy . . . ." *fn2 Defendant Lion appeals. We reverse.
On May 22, 1992, plaintiff Gary Campbell was involved in a motor vehicle accident in Egg Harbor Township as a result of which he sustained numerous injuries and incurred medical expenses allegedly in excess of $10,000. He was driving his own van when it was struck by an automobile owned and operated by defendant Joanne Livolsi. Her insurance policy had been issued on behalf of Market Transition Facility of New Jersey ("MTF"), which initially denied coverage on the ground that the policy had been canceled for non-payment of premiums. During the pendency of this matter, which also involved the Campbells' negligence action against Livolsi and Livolsi's declaratory judgment action seeking coverage from MTF, Gary and his wife, Barbara, settled their claims with MTF for one-half of the policy limits.
At the time of the accident, the Campbells were the beneficiaries of an automobile insurance policy issued by Lion. The policy listed two vehicles, a 1980 station wagon, driven primarily by Barbara, and the 1985 van, for which Gary was listed as the primary driver. There were no seats in the rear of the van and its outer sides bore the inscription, "Auto Shopper." The policy contained the above quoted exclusion which formed the basis of Lion's denial of coverage on the Campbells' claims for uninsured or underinsured motorist insurance.
These are the facts relating to the exclusion. Despite Gary's representation to Lion that the van was used for pleasure, it was in fact being used, at least in part, for commercial purposes and, indeed, it had commercial license plates. Gary bought the van in 1990 from Showcase Publications, Inc., ("Showcase") for the purpose of delivering its weekly advertising newspaper called "Auto Shopper." Initially, he made deliveries one day a week in Atlantic County. Over time other routes were added in Cape May and Cumberland counties, with the result that he would be making deliveries on three days each week. Gary was still making deliveries of "Auto Shopper" for Showcase at the time of the accident. There is no evidence regarding the manner in which he was compensated for this work by Showcase.
On January 27, 1992, Gary entered into a "Contract Hauler Agreement" with South Jersey Publishing Company which publishes a newspaper known as "The Press of Atlantic City." The agreement, cancelable by either party on ten-days notice, provides for the delivery of newspapers seven days a week to specific "retail outlets" and "Home Delivery Carriers" in the "Pleasantville/Absecon/Smithville Distribution areas." The newspapers had to be picked up by 2:00 a.m. and delivered no later than 6:00 a.m. The agreement designates Gary as "Hauler" and includes the following statements:
2. Delivery Fee. In exchange for the delivery services described in this Agreement, Hauler will be paid a delivery fee in the amount of $500.00 per week ("the Delivery Fee"). The Delivery Fee will be paid by The Press to the Hauler on Friday of the week after the week in which delivery services were rendered, subject to any deductions or setoffs described below. * * * When the Monday thru ...