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Conoshenti v. Liberty Mutual Fire Insurance Co.


November 16, 2007


On appeal from Superior Court of New Jersey, Law Division, Middlesex County, L-5260-06.

Per curiam.


Submitted September 19, 2007

Before Judges Payne and Messano.

Plaintiff, Thomas Conoshenti, appeals from the dismissal with prejudice, upon motion for summary judgment, of his claim for underinsured motorist (UIM) benefits against his auto insurer, defendant Liberty Mutual Fire Insurance Company.

Plaintiff was injured in an intersection collision on a public highway while test-driving a motorcycle prior to potential purchase. At the time of the accident, plaintiff likely had the permission of the motorcycle's owner to ride the cycle. However, he did not possess a motorcycle operator's license, although he possessed a valid driver's license.

After receiving $24,000 in settlement of his bodily injury claims from the alleged tortfeasor, pursuant to liability coverage in the amount of $25,000 issued to that tortfeasor, plaintiff sought UIM benefits from his own auto carrier. Liberty Mutual denied such benefits, citing an exclusion from UIM coverage for bodily injury sustained by an insured "[u]sing a vehicle without a reasonable belief that that 'insured' is entitled to do so." Liberty Mutual cited plaintiff's lack of a motorcycle operator's permit as the factual basis for its coverage denial. Such a license is statutorily required under New Jersey law. See N.J.S.A. 39:1-1 (defining motor vehicle to include motorcycles); 39:3-10 (requiring a license for operation of a motor vehicle on a public highway) and 39:3-10a (creating classified licensing for operators of motorcycles).

On appeal, plaintiff claims that Liberty Mutual's policy exclusion is ambiguous and, because he had the permission of the owner of the motorcycle to ride it, he had a reasonable belief of entitlement, despite his lack of a motorcycle operator's license. According to plaintiff, "case law addressing what constitutes a 'reasonable belief' that the insured is entitled to operate a motor vehicle is dependent on the issue of permission." Citing Cynthia M. Craig & Daniel J. Pomeroy, New Jersey Auto Insurance Law, § 6.35 (2007). We decline to accept plaintiff's position and affirm.

Plaintiff's argument that his UIM coverage was triggered by the permission to operate the motorcycle allegedly granted by its prospective seller is essentially based upon decisions in cases such as Rutgers Cas. Ins. Co. v. Collins, 158 N.J. 542 (1999) and St. Paul Ins. Co. v. Rutgers Cas. Ins. Co., 232 N.J. Super. 582 (App. Div. 1989). In Collins, an unlicensed husband was involved in a one-car automobile accident resulting in the death of his passenger-wife. The accident occurred while the husband was driving, with his wife's permission, a car owned by the husband's stepfather and principally driven by the husband's mother. An issue of fact existed as to whether the husband's family had given permission to the wife to operate the car; it clearly had not directly granted such permission to the husband.

After coverage was denied by the car owner's insurer, Rutgers, on the basis of an exclusion for any person "[u]sing a vehicle without a reasonable belief that that person is entitled to do so," a declaratory judgment action was filed by the estate of the wife against the carrier. On appeal, the Supreme Court determined that the deceased wife's entitlement to coverage arose from the omnibus clause of the policy, which should be read to afford coverage to her if she had obtained the car with the express or implied consent of her in-laws, an undecided factual issue requiring remand for resolution. Id. at 548-49. The Court held further that, under established precedent,*fn2 if the wife had permission to use the car, and had in turn given permission to her husband to drive, then his reasonable belief became irrelevant as the result of the operation of the initial permission rule. Id. at 551. However, if the wife did not have initial permission to use the car, then the husband would not be covered, because he could not have had a reasonable belief that he had permission from his parents to drive the vehicle. Id. at 551.

Our decision in St. Paul, supra, which involved a claim on a mother's policy arising after her son, who possessed only a learner's permit, was involved in an intersection collision, similarly involved liability coverage and similarly depended upon the operation of the initial permission rule. 232 N.J. Super. at 586.

The difference between those cases and the present matter is that, here, liability coverage has not been requested, but rather, first-party UIM benefits. Moreover, coverage is not sought under the policy of the motorcycle's proposed seller. Instead, the claim was made pursuant to the provisions of plaintiff's own policy. As a consequence, the initial permission rule, operative when liability coverage is sought by an injured third party under the omnibus provisions of a policy issued to a vehicle's owner, is irrelevant.

The legal principles specifically governing this case appear in our decision in Martin v. Rutgers Cas. Ins. Co., 346 N.J. Super. 320 (App. Div. 2001). See Craig & Pomeroy, supra, §6.35 at 142 (distinguishing the rule of Collins, cited by plaintiff, from Martin). There, plaintiff Martin, whose driver's license was suspended, was involved in a one-car accident while driving a vehicle owned by her fiancé's stepfather and insured by Rutgers. The stepfather was unaware of the license suspension. After the accident, in which only Martin was injured, she sought PIP and uninsured motorist (UM) benefits under the stepfather's policy. When such benefits were denied on the basis of an exclusion from coverage for bodily injury sustained by a person "[u]sing a vehicle without a reasonable belief that that person is entitled to do so," Martin filed suit.

On appeal from a judgment in Rutgers' favor, we affirmed. In doing so, we noted, contrary to plaintiff's argument here, "an exclusion of benefits for one using [a] car without a reasonable belief as to entitlement was plain and unambiguous and not against any public policy." Id. at 324 (citing St. Paul, supra, 232 N.J. Super. at 586). In the circumstances presented, we further held as a matter of law that "an individual who knows that her driver's license has been suspended and remains suspended, could form no 'reasonable belief' that she had permission to drive a vehicle." In this respect, we noted the similarity between Martin's claim and that of the husband in Collins who, but for the potential operation of the initial permission rule, could have had no reasonable belief that he was entitled to drive his step-father's car. Id. at 325.

Additionally, we concluded:

We also note the very limited question presented to us. We are not confronted with a claim for PIP coverage put forth by an unwitting, injured passenger. Neither are we presented with a claim for liability coverage by an individual injured as a result of a collision with a vehicle driven by plaintiff. Rather, we are asked to conclude that an individual who had to know she was not entitled to drive this automobile is entitled to PIP coverage and UM coverage for injuries she received while driving with complete disregard of her lack of entitlement. We decline to reach such a result. [Ibid.]

We discern no reason to deviate from the rationale of Martin in affirming the order of summary judgment entered by the trial court in this case. The proper test for measuring whether a plaintiff's belief that he was reasonably entitled to operate a vehicle is "the reaction of a reasonable [person] of [plaintiff's] age, personality and social milieu, subject to such attendant influences on his judgment and mind as may be credibly discerned from the proofs." Collins, supra, 158 N.J. at 550 (quoting State Farm Ins. Co. v. Zurich Am. Ins. Co., 62 N.J. 155, 171-72 (1973)). In the present matter, nothing suggests that plaintiff had a reasonable belief that he was entitled to operate a motorcycle on a public highway without a license, and thus in violation of the law. Further, we find no basis for concluding that, because the policy at issue lacked a provision, found in other policies, raising a conclusive presumption that a person operating a vehicle without a license lacks a reasonable belief that the person is entitled to do so, that an ambiguity was somehow created or that the outcome of this matter is affected. As a final matter, although it is true that plaintiff, here, never had a license to operate a motorcycle, rather than possessing a license that was suspended, we find that distinction immaterial for coverage purposes. Under the facts presented, in which plaintiff has acknowledged the absence of any license entitling him to operate a motorcycle legally on a public highway, no issue of fact exists that would require a remand for trial. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974).

Accordingly, we affirm.

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