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Dickson v. Selective Insurance Group

October 20, 2003


On appeal from the Superior Court of New Jersey, Law Division, Camden County, Indictment No. 3181-00.

Before Judges Stern, A. A. Rodriguez and Lefelt.

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


Argued September 16, 2003

Defendant Selective Insurance Group appeals from an order of September 27, 2002, which"rescinded" an order of April 4, 2002, granting summary judgment to defendant. The September 27, 2002, order also granted summary judgment to plaintiff, John F. Dickson, against Selective. The appeal involves a claim for underinsured motorist ("UIM") coverage by a shareholder of an insured corporation whose business vehicle was not involved in the accident occurring when the vehicle plaintiff was riding in was hit by a third party. Selective contends that the Law Division's"reconsideration of the summary judgment order that dismissed the action against Selective was erroneous and should be reversed and summary judgment in Selective's favor reinstated." We agree with Selective that plaintiff is not entitled to UIM protection under its policy.

The material facts are undisputed. According to the complaint, on May 17, 1998, plaintiff"was a rear seat passenger in a vehicle owned and operated by Douglas Campbell when said vehicle was struck hard from behind by a vehicle owned and operated by Aldo Caccianmani and propelled into another vehicle directly in front." As a result of the accident, plaintiff alleges that he sustained serious injuries.

After exhausting the available coverage under the Campbell and Caccianmani policies, plaintiff sought UIM coverage under the policy issued by Selective to Air Distribution Systems, Inc. ("ADS"), a corporation of which plaintiff was one of four equal shareholders. The four ADS shareholders each drove vehicles that were listed on ADS' automobile insurance policy. The ADS-insured vehicle Mr. Dickson drove was"personally" leased by him for both his personal and business use, but the lease was paid by ADS. Mr. Dickson did not have any personally owned vehicle at the time of the accident. The ADS policy provides up to $1,000,000.00 of UIM coverage.

The insurance policy issued to ADS was purchased through defendant Moten Associates.*fn1 Prior to purchasing that policy, ADS shareholder Christopher Poyatt discussed with Moten representatives the insurance coverages it required. No other shareholders were involved in the discussions. At the time of contracting for insurance, Poyatt did not give Moten Associates any indication that any shareholder was to receive more coverage than any other shareholder. According to Moten's Stanley Szczurek, Poyatt did not indicate that plaintiff should be listed as a"named insured" or that plaintiff wanted individual UM-UIM coverage.

The insurance policy provided ADS with commercial insurance for the liability and property damage including automobile insurance for its business vehicles for the period from July 1, 1997 to July 1, 1998. The policy's"Common Declaration" indicates that the named insured is"Air Distribution Systems, Inc.," and notes that the insured is a"corporation." The policy's"Declaration Page"*fn2 listed each of the owned vehicles driven by the shareholders as"covered autos." A fifth vehicle was also insured and used by the corporation"for delivery purposes." According to Susan Jones, an account manager with Moten Associates, Selective does not allow brokers"to name people individually on [a corporate] policy."

Shortly after ADS obtained a quote for the insurance from Moten Associates, Poyatt sought additional personal coverage for his wife's personal vehicle. Poyatt explained that he was the only shareholder who needed coverage for a personal vehicle. Accordingly, a"Drive Other Car Coverage" endorsement which provides an individual with coverage where he or she does not have a personal automobile policy, was added with respect to Poyatt and his wife only. No other shareholders were given that coverage. Poyatt did not have a"personal auto policy" for the vehicle his wife drove, and he was unaware that the other shareholders were not fully covered under the policy. Poyatt stated in his deposition that at the time of contracting for insurance he had no knowledge of the laws regarding uninsured/underinsured motorist coverage or how they worked. Moreover, he stated that nobody from Moten or Selective Insurance"has ever explained to me drive other car coverage or uninsured/underinsured motorists."

The policy issued to ADS contained the following provisions concerning UM and UIM coverage:


1. We will pay all sums the"insured" is legally entitled to recover as compensatory damages from the owner or driver of an"uninsured motor vehicle" or an"underinsured motor vehicle." The damages must result from"bodily injury" sustained by the"insured," or"property damage" caused by an"accident." The owner's or driver's liability for these damages must result from the ownership, maintenance or use of an"uninsured motor vehicle" or an"underinsured motor vehicle."

2. Any judgment for damages arising out of a"suit" brought without our written ...

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