March 14, 2001
KENNETH ADLER, AN INFANT BY HIS GUARDIAN AD LITEM, BRUCE ADLER, AND BRUCE ADLER AND JANET ADLER INDIVIDUALLY, PLAINTIFFS-RESPONDENTS,
SANDY H. CHIN, SOON FOT NOODLE CO., INC., A/K/A GREEN POINT PRODUCT CO. AND SUNG JUN HONG, STATE OF NEW JERSEY, BOROUGH OF ALPINE, BOROUGH OF CRESSKILL, DEFENDANTS, AND CAMDEN FIRE INSURANCE ASSOCIATION, DEFENDANT/THIRD PARTY PLAINTIFF-APPELLANT,
ALLSTATE INSURANCE COMPANY, THIRD PARTY DEFENDANT- RESPONDENT.
On appeal from Superior Court of New Jersey, Law Division, Bergen County, L-1555-95.
Before Judges Baime and Carchman.
The opinion of the court was delivered by: Carchman, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 22, 2001
This appeal arises from a conflict between two automobile insurance carriers providing Underinsured Motorist (UIM) coverage. Plaintiff Camden Fire Insurance Association appeals from a judgment of the Law Division determining that the "excess- escape" provision of its UIM coverage and that of defendant Allstate Insurance Company required that a claim brought by Kenneth Adler, plaintiff's insured, be pro-rated between plaintiff and defendant. The trial judge rejected plaintiff's assertion that its UIM coverage was excess to defendant's UIM coverage. We reverse and conclude that under Magnifico v. Rutgers Casualty Insurance Co., 153 N.J. 406 (1998), and our earlier decision in Di Ciurcio v. Liberty Mutual Insurance Co., 299 N.J. Super. 426 (App. Div. 1997), defendant's policy provides primary coverage to Adler and plaintiff's policy is excess.
This litigation arises as a result of a tragic automobile accident resulting in the death of two teenagers and injuries to others involved in the accident. At the time of the accident, Kenneth Adler, then age fifteen, was a passenger in an automobile owned by Barry L. and Ronnie Feinberg. This vehicle (the host vehicle) was operated by the Feinberg's son Andrew and insured by defendant. At the time of the accident, Kenneth was being driven to his home where he resided with his parents Bruce and Janet Adler. The Adlers owned a vehicle which was insured by plaintiff. As the Feinberg vehicle was stopped to make a turn, it was struck in the rear by a van operated by Sandy Chin and owned by Soon Fat Noodle Co. After it was struck by the Chin vehicle, the Feinberg vehicle was struck by another vehicle owned and operated by Sung Jun Hong. Both Andrew Feinberg and another passenger in the Feinberg vehicle, Andrew Strasser, died as a result of the accident. Kenneth Adler suffered personal injuries. Four tort actions were filed as a result of the accident, and we are advised that three have settled.
Plaintiff asserts that defendant is the primary coverage carrier since the "excess-escape" provision of defendant's policy addressing "other insurance" is not operative when its insured vehicle is the host vehicle involved in the accident. Plaintiff concedes that its "excess-escape" language is essentially the same, but argues that its responsibility is excess to defendant's primary coverage. We agree that both our decision in De Ciurcio, supra, 299 N.J. Super. 426, and that of the Supreme Court in Magnifico supra, 153 N.J. 406, support this view. The issues before us require that we examine the language of the policies at issue.*fn1
Although he did not delineate the policy language, the trial judge concluded:
given the "other insurance" clause of the policies in question that the Adler claim must be pro rated as between Allstate and Camden. The court further finds that given the fact that in addition to the Adler claims the Allstate policy has two additional claims against it, the pro ration will be on the balance remaining on the policy after the two other claims have been satisfied.
We disagree with the conclusion reached by the trial judge.
In Magnifico, supra, the Supreme Court held, under policy language similar to that of the provisions at issue here, that the host vehicle coverage was primary and the injured party's own coverage was excess to the primary coverage. 153 N.J. at 416. See also Royal Ins. Co. v. Rutgers Cas. Ins. Co., 271 N.J. Super. 409, 419-20 (App. Div. 1994). We recently discussed the holding in Magnifico in Hallion v. Liberty Mutual Insurance Co., ____ N.J. Super. ____ (App. Div. 2001) (slip op. at 11-12):
In Magnifico, the Court addressed the issue of UIM coverage under multiple insurance policies. . . . [P]laintiff and her husband were passengers in a car owned and driven by Grace DeNichilo. The DeNichilo vehicle collided with a vehicle driven by Frank Cameron and owned by Beverly Manning. The Manning vehicle was insured by [a] State Farm Policy with a liability limit of $25,000.00. CSC Insurance Company insured the DeNichilo's car and provided UIM coverage of $250,000.00. Plaintiff's own automobile policy was with Rutgers Casualty Insurance Company which provided UIM coverage of $100,000.00. Plaintiff's insurance policy provided a standard "other insurance" clause which stated "any insurance we provide with respect to a vehicle you do not own shall be excess over any other collectible insurance." Applying the clear and unambiguous language of the insurance contract, the Court held that the CSC policy provided primary coverage and the Rutgers policy provided excess coverage. [Ibid. (citations omitted).]
Hallion involved facts similar to those in Magnifico and this appeal. In Hallion, plaintiff was injured while driving in an automobile owned by her daughter and insured by CNA. Id. at 2-3. Plaintiff had her own policy issued by Liberty Mutual. Ibid. The minimal liability coverage on the tortfeasor's vehicle triggered the respective policies' UIM coverage. Ibid. Applying Magnifico, we concluded:
Liberty Mutual's policy provided to plaintiffs contained the standard "other insurance" clause similar to the policy in Magnifico, and the CSC policy of the host vehicle provided UIM coverage to Dale Hallion as a person "occupying" the covered vehicle. Applying the clear policy language, we conclude that CNA provided primary coverage and Liberty Mutual provided excess UIM coverage to plaintiffs. [Id. at 12.]
In Di Ciurcio, supra, 299 N.J. Super. 426, decided prior to Magnifico, we interpreted policy language substantially similar to that appearing in both Magnifico and Hallion. Plaintiff was a passenger in an automobile insured by Liberty Mutual and owned by the father of the driver. Id. at 428. Following an automobile accident involving another vehicle, plaintiff sought UIM coverage from both Allstate, plaintiff's father's automobile insurer, and from Liberty Mutual. Id. at 428-29. Allstate successfully argued that pursuant to its policy's "excess-escape" provision, its coverage was excess to Liberty Mutual's primary coverage as insurer of the host vehicle, and we so held. Id. at 428, 433.
We find defendant's argument here that its UIM coverage must be considered pro rata with plaintiff's coverage to be disingenuous. Not only does that argument fly in the face of Magnifico, it is also directly contrary to the position taken by this same defendant in Di Ciurcio in interpreting policy language substantially similar to that in this case. Particularly irksome is defendant's inference that Di Ciurcio may have been decided incorrectly because it "came at a time of significant confusion in the area of underinsured motorist coverage," as is its observation that "Di Ciurcio has yet to be followed in a subsequent case." Not only is Di Ciurcio a correct statement of the law, it is entirely consistent with both Magnifico and our recent decision in Hallion. Also noteworthy, defendant does not suggest that any language in its or plaintiff's policy compels a different result.*fn2
In sum, we conclude that the trial judge erred in holding that the policies were to considered pro rata. We conclude that plaintiff's policy is excess to defendant's, which is primary.