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Selective Insurance Co. of America v. Thomas

May 13, 2004

SELECTIVE INSURANCE COMPANY OF AMERICA, PLAINTIFF-RESPONDENT,
v.
CHARLES THOMAS AND MARGARET CURRY, DEFENDANTS, AND DEBRA THOMAS, DEFENDANT-APPELLANT, AND OHIO CASUALTY INSURANCE COMPANY, DEFENDANT-RESPONDENT.



On certification to the Superior Court, Appellate Division.

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

The issue in this appeal is whether a husband and wife, injured in the same accident, and both named insureds under the same multiple policies, are restricted by New Jersey's anti-stacking statute, N.J.S.A. 17:28-1.1c to collectively recovering the highest single limit of all applicable underinsured motorist (UIM) policies.

Charles and Debra Thomas (the Thomases) were involved in an accident with a vehicle driven by Doris Bruner. They, and other passengers, were injured. Bruner's insurer settled all claims for $16,666.66 per person, exhausting its liability limits. Ohio Casualty insured the Thomas vehicle under a policy with split-limit uninsured/underinsured motorist (UM/UIM) coverage of $250,000 per person and $500,000 per accident. Additionally, the Thomases held a Selective business auto insurance policy on a different vehicle that provided UM/UIM coverage with a combined single limit (CSL) of $500,000. The Thomases made claims for UIM coverage under both policies.

Selective sought a declaratory judgment regarding the limits available individually and collectively to the Thomases, and the manner in which UIM coverage should be allocated between it and Ohio. Ohio filed a cross-claim seeking a declaration that UIM coverage for the Thomases was to be pro-rated between it and Selective and that the Thomases were limited collectively to a $500,000 recovery. The trial court declined to limit the Thomases' collective recovery to $500,000. Ohio appealed, arguing, among other things, that the statutory anti-stacking language of N.J.S.A. 17:28-1.1c limited the Thomases' UIM coverage from both policies collectively to $500,000, minus any payment received from Bruner's policy. The Appellate Division agreed.

The Supreme Court granted Debra's petition for certification.

HELD: The insurers have advanced no argument to support the conclusion that Charles and Debra Thomas together are "the insured" under the anti-stacking statute. Therefore, each is entitled to the $500,000 combined single limit in the Selective policy, subject to any other relevant policy limitations.

1. N.J.S.A. 17:28-1.1 provides that no motor vehicle policy or renewal insuring against loss for bodily injury or death sustained by "any person" shall issue unless it provides, among other things, for UM/UIM coverage. At issue here is the anti-stacking provision of the UIM statute. Stacking occurs "where the same claimant and the same loss are covered under multiple policies, or under multiple coverages contained in a single policy, and the amount available under one policy is inadequate to satisfy the damages alleged or awarded." 12 Lee Russ & Thomas F. Segalla, Couch on Insurance, § 169:4 (3d ed. 1998). Stacking of UM and UIM coverage is prohibited by N.J.S.A. 17:28-1.1c. The question presented is whether Charles and Debra, both insureds under the same multiple policies, are collectively restricted to the higher policy limit. (Pp. 4-9)

2. The first inquiry is whether there is something in the UIM statute itself that would suggest that the term "the insured" in the anti-stacking statute is intended to incorporate both a husband and wife and thus restrict them collectively to the higher policy limit. It is certainly arguable that the Legislature's differential use of the terms "the person" and "the insured" in the UIM statute indicates a recognition that "the insured" could include more than one person. However, that does not answer the question presented, leaving the policy language as the only other possibility. Both the Ohio and Selective policies distinguish between the "named insured" and "the insured" by limiting what they will pay to a non-named insured covered by another policy with a lower liability limit. The question is whether there is something in that language to support the insurers' view that, although their claims and losses are distinct, the Thomases are one "insured" for UIM limits. The insurers have advanced no argument to support that conclusion. Therefore, each is entitled to the $500,000 CSL in the Selective policy, subject to any other relevant policy limitations. (Pp. 9-13)

The judgment of the Appellate Division is REVERSED. The case is REMANDED to the trial court for reconsideration of its order in light of the principles to which we have adverted.

CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ZAZZALI, ALBIN, and WALLACE join in this opinion. JUSTICE VERNIERO did not participate.

Per curiam.

Argued January 6, 2004

This case arose when Charles Thomas, driving a 1992 Dodge van, was involved in an accident with a vehicle driven by Doris Bruner. Charles, his wife Debra, his mother-in-law, and three of Bruner's passengers were injured. Bruner's insurer settled all six claims for $16,666.66 per person, exhausting its liability limits.

The Thomas van was insured by Ohio Casualty under a policy with split-limit uninsured/underinsured motorist(UM/UIM) coverage of $250,000 per person and $500,000 per accident. Additionally, the Thomases held a Selective business auto insurance policy on a different van that provided UM/UIM coverage with a combined single limit (CSL) of $500,000.

Charles and Debra (collectively the Thomases) made claims for UIM coverage under both policies. Selective sought a declaratory judgment regarding the limits available individually and collectively to the Thomases, and the manner in which UIM coverage should be allocated between it and Ohio. Ohio filed a cross-claim seeking a declaration that UIM coverage for the Thomases was to be pro-rated between it and Selective and that the Thomases were limited collectively to a $500,000 recovery.

The trial court declined to limit the Thomases' collective recovery to $500,000 and entered an order to the effect that: (1) the total amount of UIM coverage available to Charles under the Selective Policy was $483,333.34 ($500,000 minus a credit of $16,666.66 for the amount paid from Bruner's policy); (2) UIM coverage for Charles was to be prorated between Selective (sixty-six and two-thirds percent) and Ohio (thirty three and one-third percent); (3) the total amount of UIM coverage available to Debra under Ohio's policy was $233,333.34 ($250,000 minus a credit of $16,666.66 for the amount paid from Bruner's policy); and (4) Debra was not entitled to UIM coverage under the Selective policy because she was not a named insured under that policy.

Ohio appealed, arguing, among other things, that the trial court erred in ruling that Debra was not a named insured*fn1 under Selective's policy and that the statutory anti-stacking language of N.J.S.A. 17:28-1.1c limited the Thomases' UIM coverage from both policies ...


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