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Progressive Casualty Insurance Co. v. Hurley

January 10, 2000

PROGRESSIVE CASUALTY INSURANCE COMPANY, AN INSURANCE CARRIER, PLAINTIFF-RESPONDENT
V.
ROBERT MATTHEW HURLEY & DEVIL ELEVEN, INC., A NEW JERSEY CORPORATION, DEFENDANTS-APPELLANTS/THIRD PARTY PLAINTIFFS,
V.
COVERAGE CONSULTANTS, INC., A NEW YORK CORPORATION, THIRD-PARTY DEFENDANT,
V.
JASON JACOBS, FOURTH PARTY DEFENDANT.



Before Judges Landau, Kimmelman and Arnold.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 16, 1999

On Appeal from Superior Court of New Jersey, Law Division, Mercer County.

Defendants Robert Hurley ("Hurley") and Devil Eleven, Inc. ("Devil"), a New Jersey corporation, appeal from a Law Division order granting summary judgment in favor of plaintiff, Progressive Casualty Insurance, Co.("Progressive"). Plaintiff had filed a complaint seeking a declaratory judgment that Hurley was not entitled to uninsured motorist (UM) coverage under Devil's commer-cial auto insurance policy for his injuries sustained in an automobile accident on December 12, 1993, in Sacramento, California. Defendants' counterclaim sought UM coverage for those injuries. *fn1 The motion was granted on the basis that Hurley, who was not involved with procuring the policy, was not entitled to UM coverage under the commercial auto insurance policy issued in New Jersey by Progressive for injuries sustained while driving a loaned motor vehicle involved in an automobile accident with an uninsured motorist in California.

Upon review of the record, we affirm, finding that there is no genuine issue as to any material fact and that plaintiff was entitled to summary judgment as a matter of law. R. 4:46-2; Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Progressive was not required to provide UM coverage pursuant to N.J.S.A. 17:28-1.1 for a borrowed car neither registered nor principally garaged in New Jersey, and because the declaration page of the policy clearly showed that UM coverage was not provided.

These are the facts. On December 12, 1993, Hurley was involved in a motor vehicle accident in Sacramento, California with an uninsured motorist. At the time of the accident, he resided in Sacramento where he played professional basketball with the Sacramento Kings. Hurley was driving a Toyota 4 Runner loaned to him, presumably for promotional purposes, by the Folsom Lake Toyota dealership. Hurley received $60,000 in UM benefits under the Folsom Lake policy.

Plaintiff had issued a commercial motor vehicle policy to Devil pursuant to the New Jersey's Commercial Automobile Insurance Plan ("CAIP"). Devil was formed at the instance of Hurley's financial advisor, Jacobs, for tax purposes. A Ford Explorer was owned and insured by Devil with the plaintiff insurer through the broker, Coverage. Jacobs made the arrangements.

At their depositions, Hurley and his mother, who was listed as a Devil employee, both testified that they never had any conversations with the broker regarding the policy. A Coverage account executive confirmed in his deposition that he had no conversations with either of the Hurleys. Hurley said in his deposition that he understood that the policy was "to protect me in case if someone tried to sue me as a result of some kind of motor vehicle problem . . .," and that his financial advisor took out the policy "as blanket coverage for myself to protect myself and the employees of Devil Eleven. That's really all I knew about the policy."

At the time the initial Devil policy was purchased, it was necessary for Coverage to procure automobile insurance through CAIP because Hurley was then living in North Carolina, had a North Carolina drivers license, and had a poor motor vehicle abstract showing reckless driving and speeding violations. CAIP was established pursuant to N.J.S.A. 17:29D-1 "to provide for the apportionment of insurance coverage for eligible applicants who are in good faith entitled to but are unable to procure the same, through the voluntary market." Regulations adopted as N.J.A.C. 11:3-1.1 to -1.10, established and govern the Commercial Automobile Insurance Plan.

The New Jersey corporation, "Devil Eleven, Inc." was listed as the named insured and both defendant and his mother were listed as drivers under the Progressive policy, which was labeled as a "Business Auto Policy." As required by N.J.S.A. 17:28-1.1, a UM and UIM insurance endorsement was attached to the policy. However, N.J.S.A. 17:28-1.1 requires a UM and UIM insurance provision only for vehicles registered or principally garaged in this State. One such vehicle, a Ford Explorer, is listed in the policy. There is no requirement to provide UM coverage for a borrowed, out-of-state vehicle that is neither garaged nor being operated in this state. N.J.S.A. 17:28-1.1; 17:28-1.4.

Jacobs testified that when Hurley began using the 4 Runner in California, he informed Coverage "that there was another vehicle that [defendant] would be driving and, therefore, to get coverage on that particular vehicle and to extend whatever coverage we had under the policies and see that that was taken care of."

Pursuant to Jacobs' request, Coverage obtained a new policy which contained in bold words "Added Hired Car and Drive other Car Coverages." The "Declarations" and premium pages of a new policy are critical to determining what coverage an insured can reasonably expect thereunder. Lehrhoff v. Aetna Cas. and Sur. Co., 271 N.J. Super. 340 (App. Div. 1994).

In this case, the "Declarations" clearly showed that, as distinct from liability coverage, UM coverage only extended to the 1993 Ford Explorer owned by the corporation. Similarly, item 4 of the "Declarations" made clear that only liability was covered under the "Drive Other Car" category. The Declarations also made clear that no premium was being charged and no coverage provided for UM, UIM or any other purpose with respect to the "Drive Other Car" addition. Moreover, the Declarations ...


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