On certification to the Superior Court, Appellate Division, whose opinion is reported at 356 N.J. Super. 447 (2002).
The issues before the Court are whether Christine Vassiliu's survival and wrongful death actions trigger separate "per person" coverage claims under a split limit insurance policy or whether the claims are subject to a single coverage limit and whether the UIM insurers are entitled to a credit for an amount received by Vassiliu in a settlement of claims against third-party tortfeasors.
On June 24, 1995, Hristos Vassiliu was driving his van on Route 553 in Franklin Township, Gloucester County. A vehicle driven by Shaun O'Brien collided with Hristos Vassiliu's van, resulting in Hristos' death. At the time of the accident, Christine Vassiliu, Hristos' (decedent's) wife, was pregnant with the couple's first child. In her capacity as Administratrix of decedent's estate and Administratrix Ad Prosequendum for decedent's heirs (collectively, Vassiliu), Vassiliu filed a personal injury complaint, consisting of wrongful death and survivorship claims against Shaun O'Brien, and products liability claims against the manufacturer and seller of decedent's van.
O'Brien was insured under two liability policies. The first policy, issued by New Hampshire Insurance Company (New Hampshire), was a $35,000 single limit policy. The second policy, issued by Prudential Property & Casualty Insurance Company (Prudential), was a $15,000 "per person" and $30,000 "per accident" split limit policy. In addition, the decedent was covered by underinsured motorist (UIM) coverage under policies issued by Prudential and Selective Insurance Company (Selective). Both of those policies also had split limit coverage but in larger amounts, $100,000 "per person" and $300,000 "per accident."
The "per person" provision in Prudential's policy provides that the amount shown on the declarations page under "Bodily Injury-Each Person" is the limit of the insurer's liability for all damages, "including damages for care and loss of services, arising out of bodily injury to one person as a result of any one accident." Prudential's UIM provision contains language nearly identical to the "per person" language in the liability policy. Selective's UIM provision contains similar language. The UIM policies also include provisions concerning whether the carriers are entitled to credits or setoffs for settlements. Prudential's policy provides that the amount the carrier agrees to pay will be reduced by any amount recoverable from those responsible for an accident. Selective's policy states that the UIM coverage will be reduced by all sums paid because of bodily injury or property damage by or on behalf of persons or entities that may be legally responsible.
Just prior to the start of trial, the products liability defendants settled for $215,000. The matter then proceeded to trial without a jury. O'Brien filed for bankruptcy during the trial. Thereafter, Vassiliu agreed that O'Brien's damages would be limited to the proceeds from his insurance policies and the trial continued at the permission of the bankruptcy court.
At the conclusion of trial, the court found that O'Brien was one hundred percent negligent and awarded damages of $175,000 on the survival claim and $1,750,000 for the wrongful death claim, as well as funeral expenses. New Hampshire paid $35,000, the full amount owed under its liability policy, and Prudential paid $15,000 under its liability policy. Vassiliu sought an additional $15,000 from Prudential's liability policy, arguing that the survival and wrongful death actions each qualified for the "per person" coverage. On the same grounds, Vassiliu filed a declaratory judgment action, seeking the $100,000 "per person" amount from the UIM policies.
The trial court agreed with Vassiliu, reasoning that wrongful death and survival claims are treated as separate and discrete actions "affording different damages remedies to different parties, even though they may arise from the identical occurrenceà" Thus, the court concluded that Vassiliu was entitled to $15,000 for the wrongful death action and $15,000 for the survival action under the Prudential liability policy. Similarly, Vassiliu was entitled to $200,000 in UIM coverage, $100,000 for the wrongful death claim and $100,000 for the survival action. The trial court reduced the UIM amounts by the amounts obtained under O'Brien's liability policies. The court denied the insurers' claim that they are entitled to set off the $215,000 products liability settlement from the UIM amount awarded.
On appeal, the Appellate Division affirmed in part and reversed in part. The appellate panel agreed with the trial court that the survival and wrongful death actions each triggered a separate "per person" limit. The appellate panel disagreed in respect of the set off, concluding that the insurers are entitled to a credit for the products liability settlement monies. In total, the Appellate Division's disposition resulted in $65,000 in coverage ($35,000 under the New Hampshire policy and $30,000 under the Prudential policy. Because the $215,000 settlement exceeded the total UIM coverage limit, there was no payment awarded.
The Supreme Court granted Prudential's petition for certification in respect of the "per person" limit issue and granted Vassiliu's cross-petition on the issue of the UIM setoff.
HELD: Because Vassiliu's survival and wrongful death actions are derivative of and dependent on the decedent's injuries, including his death, those actions are subject to a single "per person" limit in the Prudential liability policy as well as the two UIM policies. In addition, the UIM carriers are entitled to a credit for the amount received from the products liability settlement.
1. The "person" referenced in Prudential's liability policy is the decedent in this case, not the decedent's estate or his heirs reflected in Vassiliu's wrongful death and survival actions. Because the policy limits liability "for all damagesà arising out of bodily injury to one person," the total coverage is $15,000, the single "per person" limit. There is no ambiguity in the policy necessitating a contrary approach. (P. 10)
2. While Vassiliu's wrongful death and survival actions are legally distinct, those actions trigger a single "per person" limit in these circumstances. Where an insurance policy fixes a maximum recovery for bodily injury to one person, the limitation is applicable to all claims of damage flowing from such bodily injury. It is immaterial that a person other than the one who suffered the bodily injuries may claim some part of the damages. (Pp. 10-12)
3. An insurance contract that provides liability for "all damagesàarising out of bodily injury" includes death as a basis of a claim. The Court does not accept the notion that the decedent's death is somehow distinct from his predeath bodily injuries for purposes of the "per person" coverage limitation. Courts in other jurisdictions have reached the same conclusion. (Pp. 12-14)
4. On the setoff issue, the Court affirms the judgment of the Appellate Division substantially for the reasons expressed in that court's opinion. Thus, the UIM carriers are entitled to a credit for the $215,000 products liability settlement. (Pp. 14-15)
5. Because Vassiliu's claims are subject to a single "per person" limit, Vassiliu is entitled to $50,000 in liability insurance ($35,000 from the Hampshire policy and $15,000 from the Prudential policy). Vassiliu would also be entitled to $100,000 total UIM coverage but the UIM carriers are entitled to a credit for that entire amount in view of the $215,000 products liability settlement. (Pp. 14-15)
Judgment of the Appellate Division is AFFIRMED IN PART and REVERSED IN PART.
CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ZAZZALI, ALBIN and WALLACE join in ...