On appeal from the Superior Court, Law Division, Hudson County, L-4620-02.
The opinion of the court was delivered by: S.L. Reisner, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Re-argued telephonically May 9, 2005*fn1
Before Judges Coburn, Wecker and S.L. Reisner.
Plaintiff, Omar Carrasco, appeals a trial court order dismissing his claim against defendant, Chubb Insurance Company of America (Chubb) for underinsured motorist benefits (UIM). We reverse.
Plaintiff was a passenger in a motor vehicle owned by his ex-wife Monica Carrasco and operated by Ruberth Palma;*fn2 the Palma/Carrasco vehicle was insured by Chubb, with a policy that provided $100,000 in liability coverage and $100,000 in UIM coverage. The Palma/Carrasco vehicle collided with a vehicle operated by Dagberto Marte; that vehicle was covered by a $15,000 liability policy. With Chubb's consent, pursuant to Longworth v. Van Houten, 223 N.J. Super. 174 (App. Div. 1988), plaintiff settled with Marte's insurance company for $15,000. Following mandatory arbitration, Palma and Marte were each found fifty percent liable for the accident and plaintiff was awarded $65,000 in damages. Under the Comparative Negligence Act, N.J.S.A. 2A:15-5.3, each defendant was only obligated to pay for his or her respective fifty-percent share of the award, or $32,500 each. The arbitration award was confirmed, and plaintiff accepted $32,500 from Chubb as liability insurer of the Palma/Carrasco vehicle. Plaintiff then moved to enter judgment against Chubb, as UIM insurer, for the $17,500 difference between the $15,000 policy available to Marte and the $32,500 judgment plaintiff had obtained against Marte.
The trial court denied the application, holding that plaintiff "was not an underinsured motorist" under the UIM statute, N.J.S.A. 17:28-1.1(e), because the amount of insurance coverage available to both Palma and Marte, added together, totaled $115,000. We conclude this was an erroneous construction of the UIM statute.
The UIM statute, N.J.S.A. 17:28-1.1(e), provides that
For the purpose of this section, (1) "underinsured motorist coverage" means insurance for damages because of bodily injury and property damage resulting from an accident arising out of the ownership, maintenance, operation or use of an underinsured motor vehicle. . . . A motor vehicle is underinsured when the sum of the limits of liability under all bodily injury and property damage liability bonds and insurance policies available to a person against whom recovery is sought for bodily injury or property damage is, at the time of the accident, less than the applicable limits for underinsured motorist coverage afforded under the motor vehicle insurance policy held by the person seeking that recovery. A motor vehicle shall not be considered an underinsured motor vehicle under this section unless the limits of all bodily injury liability insurance or bonds applicable at the time of the accident have been exhausted by payment of settlements or judgments. The limits of underinsured motorist coverage available to an injured person shall be reduced by the amount he has recovered under all bodily injury liability insurance or bonds; [Ibid.]
By its terms, the statute requires consideration of "a motor vehicle" and a defendant involved in an accident, and what insurance is "applicable" to that individual defendant and his or her vehicle. In a situation where there are multiple defendants, each defendant's vehicle and each defendant's insurance policy must be considered separately to determine whether that defendant's vehicle is underinsured. See Nikiper v. Motor Club of Am. Cos., 232 N.J. Super. 393, 398 (App. Div.), certif. denied, 117 N.J. 139 (1989) (Where an injured plaintiff sued multiple defendants one of whom, Giletto, had less liability coverage than plaintiff's UIM limits, we noted that "since [defendant Giletto's] car had a liability insurance policy of $50,000 and the [plaintiff] Nikiper car had UIM coverage of $100,000 with MCA, the Giletto car clearly was 'underinsured. . . .'")*fn3 We must also consider whether, and to what extent, a defendant is an actual tortfeasor and not simply a named defendant:
[W]hen the statute, N.J.S.A. 17:28-1.1(e), speaks of "available" insurance coverage, it plainly refers to that of persons who are actual responsible tortfeasors and not that of those who may have been "involved" in the accident without being liable under the law. To rule otherwise would lead to the result that underinsured coverage would be eliminated whenever entirely blameless persons involved in an accident happen to be heavily insured. [Prudential Prop. and Cas. Ins. Co. v. Kress, 241 N.J. Super. 81, 86 (App. Div. 1990) (quoting Gold v. Aetna Life & Cas. Ins. Co., 233 N.J. Super. 271, 276 (App. Div. 1989).]
Once that inquiry is completed, we must also consider what insurance is actually "available to a person against whom recovery is sought" or is otherwise "applicable" to that person or his or her vehicle. N.J.S.A. 17:28-1.1(e). See ...