On appeal from the Superior Court of New Jersey, Law Division, Union County, L-6051-97.
Before Judges Eichen, Collester and Parker.
The opinion of the court was delivered by: Eichen, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
OPINION CORRECTED 01/28/02
The question posed by this appeal is whether an underinsured motorist (UIM) carrier which has intervened in a personal injury automobile action in the Superior Court involving multiple tortfeasors should have been permitted to continue in the action to protect its liability exposure to plaintiff after plaintiff settled with one of the tortfeasors. We conclude that the UIM carrier should have been permitted to remain as a party to protect its liability exposure to the plaintiff. Because the judge prevented the UIM carrier from participating, we reverse.
Plaintiff Mary Scheer commenced a personal injury automobile negligence action alleging that she was injured in a three car chain reaction collision on November 7, 1995. She contends she was waiting to make a left turn when her vehicle was struck in the rear by defendant Amy DiBenedetto's vehicle. Defendant DiBenedetto claims she was stopped behind plaintiff's vehicle when defendant Hugh P. Heagney's vehicle suddenly struck her vehicle forcing it into the rear of plaintiff's vehicle.*fn1
Defendant Heagney's automobile was covered by a liability policy issued by Allstate Insurance Company in the mandatory minimum amount of $15,000. Plaintiff had liability and underinsured motorist (UIM) coverage of $1 million under a policy issued by the Travelers Insurance Company (Travelers). Defendant DiBenedetto also had liability coverage of $1 million under an automobile insurance policy issued by Providence Washington Insurance Company.
On December 16, 1999, the matter was submitted to court-sponsored non-binding arbitration. Plaintiff rejected the award and filed a demand for a trial de novo.
On January 13, 2000, plaintiff informed Travelers of her intention to pursue a UIM claim under the arbitration clause of her automobile liability insurance policy. A short time later, defendant Heagney offered to settle plaintiff's claims against him for the $15,000 coverage available under his insurance policy. Meanwhile, the court granted Travelers motion for leave to intervene in the personal injury action instituted by plaintiff. On June 2, 2000, Travelers advised plaintiff it did not oppose plaintiff's settlement with defendant Heagney for the $15,000 maximum coverage available under his policy, and plaintiff accepted the settlement offer from Heagney, releasing him from further liability for the accident. Thereafter, a date was scheduled for trial on the issue of liability only.*fn2
On the trial date, plaintiff and defendant DiBenedetto moved informally to bar Travelers' continued participation in the liability trial. Plaintiff argued that Travelers had relinquished its right to proceed in defendant Heagney's shoes to prove defendant DiBenedetto's fault because it had not opposed plaintiff's settlement with defendant Heagney as it could have under Longworth v. Van Houten, 223 N.J. Super. 174 (App. Div. 1988). Plaintiff further argued that if Travelers were permitted to proceed in defendant Heagney's place, it would amount to an unfair "double-team[ing]" of two defense lawyers against her when she had anticipated that, by settling with defendant Heagney, she would only have one adversary at trial. Therefore, plaintiff maintained that had she known that Travelers would be asserting defendant Heagney's position against defendant DiBenedetto, she would not have settled her claims against Heagney. Defendant DiBenedetto also objected to Travelers participation in the trial claiming that it was plaintiff and Travelers that were "doubling teaming" against her and that plaintiff's interests were sufficiently protected by her attorney without Travelers' participation in the trial.
Citing Zirger v. General Accident, 144 N.J. 327, 341 (1996), which recognized intervention as the appropriate vehicle for a UIM carrier to protect its interests at a damages trial, Travelers countered that the issues of liability and damages were so "interrelated, it would be totally inequitable" not to allow it to participate in the liability portion of the case. Travelers explained that it "was not going to ... step into the shoes of the plaintiff and ... go after [the] third defendant [Heagney] for excess money, we're not doing that." According to Travelers, its sole purpose in intervening was to try to reduce its liability exposure to plaintiff by establishing that defendant DiBenedetto was also at fault in the accident. Travelers further asserted that if it were permitted to continue in the case, plaintiff would not be prejudiced because she would still recover 100% of her damages.*fn3 Travelers explained that if the jury determined that defendant DiBenedetto had contributed to the accident, the percentage of fault attributed to DiBenedetto would be used to calculate the amount of damages her liability insurer would pay, thus reducing the underinsured portion of the damages for which Travelers would be responsible. That remaining percentage, of course, would be paid by Travelers in accordance with plaintiff's UIM coverage.
In sum, Travelers argued that it did not intervene in the case to establish the defendant Heagney's liability in order to pursue his personal assets, because those were insulated from any further proceedings under the general release plaintiff had given Heagney. Rather, Travelers simply sought to protect its own liability exposure by seeking to demonstrate the co-defendant's negligent contribution to the accident.
Travelers also urged the court to devise a method by which it could participate in the trial which would not disclose its identity as an insurance carrier, but which would allow it to protect its liability exposure, suggesting the model offered by this court in Wenz v. Allstate Ins. Co., 316 N.J. Super. 570, 580 (App. Div. 1998). In Wenz, we suggested that the carrier might be addressed as either "defendant," without further description, or by substituting the defendant's name. Ibid. In that way, ...