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Cannavo v. Liberty Mutual Insurance Co.

October 16, 2007

VITO CANNAVO, III, PLAINTIFF-RESPONDENT,
v.
LIBERTY MUTUAL INSURANCE COMPANY, DEFENDANT-RESPONDENT, AND STATE FARM INSURANCE COMPANY, DEFENDANT-APPELLANT.



On appeal from Superior Court of New Jersey, Law Division, Middlesex County, L-7088-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued telephonically August 24, 2007

Before Judges Payne and Messano.

Plaintiff, Vito Cannavo, III, was injured on May 15, 2002 when the truck that he was driving was rear-ended by a vehicle operated by Leonard Levy, propelling Cannavo into the rear of a vehicle operated by Robert Young. At the time of the accident, Levy was insured under a policy of auto insurance issued by Allstate Insurance Company. Following receipt of Allstate's policy limit of $50,000, Cannavo filed underinsured motorist claims with Liberty Mutual Insurance Company, the insurer of Cannavo's two personal vehicles, and State Farm Insurance Company, the insurer of Cannavo's employer, Joseph Percario, Inc., the owner of the truck Cannavo was driving when the accident occurred.

After State Farm declined coverage, Cannavo filed suit against it and Liberty Mutual and, following discovery, moved for entry of partial summary judgment against State Farm. Liberty Mutual then filed a cross-motion for summary judgment on the ground that its coverage was excess to that of State Farm, and State Farm moved for summary judgment on the ground that its UIM coverage did not apply to Cannavo. Following oral argument, the motion judge ruled in favor of Cannavo on his claim against State Farm in an order of partial summary judgment, dated May 12, 2006, that stated: "defendant State Farm Insurance Company must provide Underinsured Motorist coverage to plaintiff for the May 15, 2002 motor vehicle accident." The summary judgment motions of State Farm and Liberty Mutual were denied.

Thereafter, State Farm moved for reconsideration, and at that time presented additional information to the court that it claimed demonstrated notice to the insured of limitations in its uninsured and underinsured (UM/UIM) coverage, adopted after the passage of New Jersey's Automobile Insurance Cost Reduction Act of 1998 (AICRA). However, the motion judge denied the motion on the ground that her initial decision had not been premised on a lack of notice, and that State Farm had failed to demonstrate error in that initial decision. In orders dated August 1, 2006, the motion judge ordered that State Farm submit to UIM arbitration, and she granted summary judgment to Liberty Mutual.

State Farm has appealed from the Court's May 12, 2006 and August 1, 2006 orders, claiming that they resulted from a misapplication of relevant insurance coverage law. In opposition, Cannavo has made arguments regarding the timeliness of State Farm's motion for reconsideration and appeal, which we decline to address, R. 2:11-3(e)(1)(E), instead turning directly to the substantive arguments presented by both parties.

The State Farm policy at issue, effective from March 4, 2002 to September 4, 2002, listed as the sole insured, Joseph Percario, Inc. The policy, which State Farm's counsel stated was "a standard car policy . . . not a business automobile policy," provided UM/UIM coverage for damages arising from bodily injury or property damage "that an insured is legally entitled to collect from the owner or driver of an . . . underinsured motor vehicle." The term "insured" was defined separately in connection with UM and UIM coverages in a definitional section entitled "Who Is an Insured" that provided in relevant part:

1. When the bodily injury or property damage arises out of the ownership, maintenance or use of an uninsured motor vehicle, Insured means:

a. you;

b. your spouse;

c. your relatives; and

d. any other person while ...


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