May 6, 2008
GARY OTTOLAINE AND NANCY OTTOLAINE, PLAINTIFFS-RESPONDENTS,
STATE FARM INSURANCE COMPANY, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-4707-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 18, 2007
Before Judges Fuentes and Chambers.
This case involves a claim for uninsured motorist (UM) coverage made by plaintiff Gary Ottolaine, under his automobile insurance policy issued by defendant State Farm Insurance Company. Pursuant to the UM provisions in the policy, the claim was first submitted for adjudication before a panel of arbitrators. State Farm rejected the panel's decision, and requested a trial de novo in the Law Division.
This appeal requires us to determine whether State Farm's right to a trial de novo is limited to the quantum of damages, or also includes the arbitrators' liability findings. The trial court concluded that State Farm's right to a trial de novo under the policy was limited to damages. We agree and affirm.
The underlying facts are undisputed. Plaintiff was injured when his car was cutoff by an unidentified vehicle, causing him to swerve into the opposite lane of traffic and collide with another vehicle. At the time of the accident, plaintiff had an automobile insurance policy issued by State Farm which provided UM coverage.
Under the State Farm policy, if the parties cannot reach an agreement as to: (1) whether the insured is legally entitled to collect damages from the owner or driver of the uninsured vehicle; or (2) the amount of the damages, the matter "shall be decided by arbitration." Here, no agreement was reached on these two questions, and, pursuant to the policy, the claim was presented to a panel of three arbitrators.*fn1
As to liability, the panel determined that the unidentified or phantom vehicle was sixty-six and two-thirds percent responsible for the accident, and plaintiff was thirty-three and one-third percent responsible. The panel awarded plaintiff gross damages in the amount of $140,000; after molding the gross award to reflect the percentages of liability, plaintiff received a net of award of $93,240.
The State Farm policy contains the following provisions with respect to the right to appeal the arbitrators' decision:
The written decision of any two arbitrators shall be binding on each party unless the amount of the damages awarded exceeds the minimum limit of liability specified by the financial responsibility law of New Jersey.
If the amount of the damages awarded in the arbitrator's decision exceeds that limit, either party may, within 30 days of the arbitrators' decision, demand a trial. If the demand is not made, the decision of the arbitrators is binding on each party. (Emphasis added.)
As the emphasized language indicates, the right to seek a trial de novo is triggered only if the amount of damages awarded exceeds the minimum coverage of $15,000; the arbitrators' decision as to liability is simply not mentioned. We are thus satisfied that, under a plain reading of the language used in the policy, the right to seek a trial de novo from the decision of the arbitrators is limited to the quantum of damages, provided the award exceeds the statutory minimum. Confronted with almost identical policy language, we reached a similar conclusion in Derfuss v. New Jersey Mfrs. Ins. Co., 285 N.J. Super. 125, 130 (App. Div. 1995).