January 3, 2008
EMPIRE FIRE & MARINE INSURANCE COMPANY, PLAINTIFF-RESPONDENT,
JOHN BENNETT, JR., DEFENDANT, AND RICHARD AMATO, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1770-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 11, 2007
Before Judges Skillman and LeWinn.
Plaintiff Empire Fire & Marine Insurance Co. (Empire) issued a "Supplemental Rental Liability Insurance Excess Policy" to Enterprise Rent-A-Car Company (Enterprise), a car rental company. The policy provided excess coverage for liability above the "minimum financial responsibility limits of the applicable jurisdiction" to any person renting a car from Enterprise who purchases "supplemental rental liability insurance."*fn1 The policy contained certain exclusions, including for:
1. Loss arising out of an "accident" which occurs while the "insured" is under the influence of alcohol or drugs, or other substances unless prescribed by a physician.
2. Loss arising out of the use of a "rental vehicle" when such use is in violation of the terms and conditions of the "rental agreement."
On March 16, 2004, defendant John Bennett, Jr. rented a car from Enterprise. The rental agreement offered supplemental rental liability insurance as an option for an additional charge, which Bennett accepted. The agreement stated that this coverage would not apply "if the rental agreement is violated," and that "[a] violation of the rental agreement shall exist . . . [i]f the car is used or driven . . . [b]y any person if there is reasonable evidence they were under the influence of narcotics, intoxicants or drugs." In addition, the jacket to the rental agreement stated:
Exclusions. All exclusions are stated in the policy, however, the following are a few key exclusions.
(a) loss arising out of an accident which occurs while the Renter or Authorized Driver is under the influence of alcohol or drugs or other substances unless prescribed by a physician[.]
On March 18, 2004, Bennett drove defendant Richard Amato to a bar for a celebration of Amato's birthday. Both Bennett and Amato consumed alcoholic beverages in the bar. On the way home, Bennett was involved in an accident in which Amato suffered serious personal injuries. Bennett subsequently pled guilty to a charge of driving while under the influence of alcohol, in violation of N.J.S.A. 39:4-50, at the time of the accident.
Amato brought a personal injury action against Bennett and other parties for the injuries he suffered in the accident.*fn2
Bennett submitted a notice of claim to Empire, which disclaimed coverage on the ground that the accident falls within the policy exclusion for any loss caused by the insured while driving under the influence of alcohol.
Empire subsequently brought this action for a declaratory judgment that the excess policy it issued to Enterprise did not provide Bennett coverage for Amato's claim. Empire named both Bennett and Amato as defendants. Amato's answer sought a declaration that the Empire policy provides coverage to Bennett for Amato's claim arising out of the March 18, 2004 accident. Amato did not file a third-party complaint against Enterprise. Bennett failed to answer and a default was entered against him.
Empire and Amato brought the case before the trial court by cross-motions for summary judgment. Amato argued that the alcohol exclusion in the Empire policy was against public policy and that the provisions of the Enterprise rental agreement relating to this exclusion were ambiguous. The trial court rejected these arguments in a very lengthy oral opinion and granted Empire summary judgment declaring that the excess policy it issued to Enterprise does not provide Bennett with coverage for Amato's claim.
On appeal, Amato presents the following arguments:
I. THE GRANTING OF SUMMARY JUDGMENT IN FAVOR OF PLAINTIFF EMPIRE FIRE & MARINE INSURANCE COMPANY WAS IN ERROR AS THE CLAIMED POLICY EXCLUSION FOR ALCOHOL USE IS VOID AS AGAINST PUBLIC POLICY.
II. THE POLICY EXCLUSION IS INVALID AS IT IS NOT PROMINENTLY DISPLAYED AND/OR IS SET FORTH NOT DIRECTLY BUT IN A CONFUSING MANNER.
III. SUMMARY JUDGMENT ON THE CROSS-MOTION SHOULD HAVE BEEN GRANTED TO DEFENDANT RICHARD AMATO THEREBY GIVING EFFECT TO THE SUPPLEMENTAL LIABILITY PROTECTION IN THE POLICY OF INSURANCE ISSUED BY DEFENDANT EMPIRE FIRE & MARINE INSURANCE COMPANY.
These arguments are clearly without merit and do not warrant extended discussion. R. 2:11-3(e)(1)(E). However, we comment briefly with respect to Amato's primary points.
Amato argues that a provision in an excess insurance policy excluding liability coverage for an accident in which the insured was operating his car under the influence of alcohol is contrary to public policy. However, Amato does not cite any statute, administrative regulation or other recognized source of public policy in support of this argument. Although the statutory provisions "mandating automobile insurance evince a strong legislative policy of assuring at least some financial protection for innocent victims[,]" Proformance Ins. Co. v. Jones, 185 N.J. 406, 414-15 (2005), the effectuation of this policy only requires coverage up to the amount required by those laws, id. at 420-21, which in this case is $15,000, see N.J.S.A. 39:6A-3; N.J.S.A. 39:6B-1. This required minimum coverage was provided through the primary liability coverage that Enterprise provided its lessees. Consequently, the requirement of the maintenance of this minimum coverage is not implicated in the excess coverage that a lessee obtains through purchase of supplemental rental liability insurance provided under the Empire policy. Therefore, the exclusion from coverage under the Empire policy for accidents that occur while the insured is under the influence of alcohol does not violate any public policy of this State. In addition, we note that the validity of such an exclusion has been upheld by courts in other jurisdictions. See, e.g., Hertz Corp. v. Home Ins. Co., 18 Cal. Rptr.2d 267, 271-73 (Ct. App. 1993); Collins v. Randall, 836 So.2d 352 (La. Ct. App. 2002).
We also reject Amato's argument that the exclusion in the Empire policy for accidents that occur while the insured is under the influence of alcohol should not be enforced because this exclusion is not clearly set forth in the rental agreement. The agreement states that the excess insurance coverage does not apply "if the rental agreement is violated" and one of the listed violations of the agreement is "driving under the influence of intoxicants." Any reasonable person would know that "alcohol" is one type of "intoxicant." Moreover, even if this exclusion were not set forth with sufficient clarity in the Enterprise rental agreement, we question whether this would provide a basis for imposition of liability upon Empire, because Amato did not present any evidence that Enterprise was acting as Empire's agent in offering its lessee coverage under the Empire policy or that Empire conferred apparent authority upon Enterprise to act as its agent.