June 14, 2007
DANIELLE MALETA, PLAINTIFF-APPELLANT,
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Law Division, Bergen County, L-3098-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 30, 2007
Before Judges Kestin and Payne.
Plaintiff, Danielle Maleta, was injured in an auto accident with Tahia Fahmy while driving a car owned by Christopher Warren. She settled for $97,500 her claim against Fahmy, who had been issued a policy of automobile insurance with liability limits of $100,000 by Ohio Casualty Insurance Company. Maleta then pursued underinsured motorist (UIM) coverage afforded by a policy issued by defendant New Jersey Manufacturers Insurance Company (NJM) to Warren. NJM denied benefits as the result of a step-down clause contained in its New Jersey UM/UIM endorsement, and after suit was filed, it was granted summary judgment on the basis of that clause.
On appeal from the order of summary judgment, Maleta contests the existence of a step-down provision applicable to UM/UIM coverage, and claims alternatively that the presence of the step-down was not sufficiently disclosed and is thus unenforceable. We disagree and affirm.
At the time of the accident, Maleta was insured as a family member under a policy with $100,000 UIM limits issued to her mother by State Farm Insurance Company. However, we have been informed that the coverage was not available to her because that coverage was equal in amount to that available under Fahmy's Ohio Casualty policy. As a result of the equivalence in coverage, the underinsured motorist provisions of the State Farm policy were not triggered, there being no underinsurance.
Warren's NJM policy afforded UM/UIM coverage in Part C of its coverage provisions. Those provisions defined an underinsured motor vehicle to mean:
2. With respect to an insured who:
a. Is not the named insured under this policy or any other policy; and
b. Is insured as a spouse or family member under one or more other policies providing similar coverage, underinsured motor vehicle means a land motor vehicle . . . to which a liability . . . policy applies at the time of the accident, but its limit for liability is less than the highest applicable limit of liability under insurance providing coverage to that insured as a spouse or family member.
Because the $100,000 UM/UIM coverage available to Maleta as a family member under her mother's State Farm policy was equal to that available pursuant to tortfeasor Fahmy's Ohio Casualty policy, Warren's NJM's UM/UIM coverage, like the coverage purchased by Maleta's mother, was not available to Maleta. We discern no reason why the State Farm and NJM policies should be treated differently in this regard.
If we nonetheless assume the applicability of NJM's UM/UIM coverage provisions in this case, we nonetheless conclude, as did the motion judge, that as the result of the operation of the policy's step-down provisions and the statutory right of set- off, Maleta would still be unable to obtain UIM benefits from NJM. In this regard, NJM's policy provided:
LIMIT OF LIABILITY
A. The limit of liability shown in the Declarations [$300,000] for this coverage is our limit of liability for all damages resulting from any one accident.
However, subject to our maximum limit of liability for this coverage,
a. An insured is not the named insured under this policy or any other policy;
b. That insured is insured as a spouse or family member under one or more other policies providing similar coverage; and
c. All such other policies have a limit of liability for similar coverage which is less than the limit of liability for this coverage, then our maximum limit of liability for that insured, for all damages resulting from any one accident, shall not exceed the highest applicable limit of liability under any insurance providing coverage to that insured as a spouse or family member.
As a consequence of this step-down clause, NJM's UIM coverage, assuming any to exist, would not have exceeded $100,000 -- the limits of UIM coverage afforded by State Farm. Pinto v. New Jersey Mfrs. Ins. Co., 365 N.J. Super. 378 (App. Div. 2004), aff'd, 183 N.J. 405, 412-14 (2005) (recognizing, in the context of a business insurance policy, the validity of a similar step-down clause contained in policy UM/UIM coverage provisions). We find to be distinguishable the Court's opinion in Skeete v. Dorvius, 184 N.J. 5 (2005), a case in which UIM coverage was found to exist despite the presence of a step-down clause. There, the step-down was added to the policy after its issuance, and its existence was buried in more than two-hundred pages of other information supplied by the insurer to the policyholder. There is no similar evidence in the present matter of an amendment to policy coverage or of language effectively masking the clear import of NJM's step-down provision.
Moreover, as stated by the Court in Skeete: "We are not prepared to say that every single policy change must be reflected on the declarations sheet." Id. at 9. Here, there was no "change," and the policy's provisions were clear. We discern no legal basis for Maleta's argument that, because there is no evidence that the existence of the UIM step-down was signaled on the policy's declaration sheet, it should not be honored.
As a final matter, we note that even if $100,000 in UIM coverage were available to Maleta pursuant to NJM's coverage provisions, Fahmy's $100,000 liability coverage would be set off against it, reducing Maleta's recovery to zero. See N.J.S.A. 17:28-1.1(e), which states in relevant part: "The limits of underinsured motorist coverage available to an injured person shall be reduced by the amount [s]he has recovered under all bodily injury liability insurance or bonds." Nikiper v. Motor Club of America Cos., 232 N.J. Super. 393, 398-400 (App. Div.), certif. denied, 117 N.J. 139 (1989) (permitting set-off); French v. N.J. School Bd. Ass'n Ins. Group, 149 N.J. 478, 484 (1998) (providing that the policy limits, not the lesser amount of the settlement, constitute the appropriate setoff).
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