February 9, 2009
MARC MORICIN, PLAINTIFF-RESPONDENT,
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-08914-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted November 12, 2008
Before Judges Parker and LeWinn.
Defendant New Jersey Manufacturers Insurance Company (NJM) appeals from an order entered on March 14, 2008 ordering arbitration of plaintiff's uninsured motorist (UM) claim. We reverse and remand.
Plaintiff was insured by NJM under a policy with UM coverage. The policy provides for arbitration of the insured's entitlement to recover damages and the amount of damages. The policy, however, explicitly excludes arbitration for coverage disputes.
Here, plaintiff claimed that he was entitled to UM coverage under the policy because the tortfeasor -- the driver of the vehicle that struck his car -- was uninsured. The matter proceeded to arbitration, but plaintiff presented no evidence that the tortfeasor was uninsured. The only evidence presented by plaintiff was that the other vehicle had expired Georgia license plates. NJM maintained that its investigation indicated that the vehicle was insured at the time of the accident.
The policy defines an "uninsured motor vehicle" as a land motor vehicle or trailer of any type:
1. To which no liability bond or policy applies at the time of the accident.
2. Which, with respect to damages for bodily injury only, is a hit-and-run vehicle whose operator or owner cannot be identified and which hits, or causes an accident resulting in bodily injury without hitting:
a. You or any family member;
b. A vehicle which you or any family member are occupying; or
c. Your covered auto.
3. To which a liability bond or policy applies at the time of the accident but the bonding or insuring company:
a. Denies coverage; or
b. Is or becomes insolvent.
4. To which a special automobile insurance policy applies at the time of the accident in accordance with New Jersey law.
In this appeal, NJM argues that (1) the order compelling arbitration is appealable as of right and subject to de novo review; (2) the trial court erred in finding the issue arbitrable; (3) plaintiff failed to establish that the alleged tortfeasor was uninsured; and (4) plaintiff failed to establish that he undertook reasonable efforts to establish that the tortfeasor was uninsured.
Coverage under an insurance policy is a legal issue to be resolved by a court, not an arbitrator. O'Connell v. New Jersey Mfrs. Ins. Co., 306 N.J. Super. 166, 172-73 (App. Div. 1997) (citing Ohio Cas. Ins. Co. v. Benson, 87 N.J. 191, 194-99 (1981)); Tornatore v. Selective Ins. Co., 302 N.J. Super. 244, 246 (App. Div. 1997). An insurance policy controls the issues subject to arbitration under that policy. Cohen v. Allstate Ins. Co., 231 N.J. Super. 97, 101 (App. Div. 1989). Coverage issues are not generally arbitrable in UM policies. New Jersey Mfrs. Ins. Co. v. McDermott, 201 N.J. Super. 251, 254 (Law Div. 1985) (citing New Jersey Mfrs. Ins. Co. v. Franklin, 160 N.J. Super. 292, 297 (App. Div. 1978)).
The policy here is clear and unambiguous: "disputes concerning coverage under this Part may not be arbitrated." "[T]his Part" refers to the UM provision of the policy.
NJM has presented the certification of Faith Bowling, Senior Claims Representative, attesting that her investigation disclosed that there was valid insurance on the tortfeasor's vehicle at the time of the accident. Plaintiff provided no evidence to dispute that assertion. Under the circumstances, NJM has made a prima facie claim that UM coverage cannot be provided to plaintiff under the policy. Nevertheless, the trial court determined that:
I don't think that the prevailing case law, nor the statute intended for matters of this type not to proceed to arbitration, and for an arbitrator then to hear the facts, and -- and make the decision. Clearly, coverage issues are issues for the court to decide, but I don't see this as being a coverage issue. This is an issue with respect to whether or not there is UM coverage to the extent that the plaintiff is entitled to recover.
An uninsured vehicle is a prerequisite to UM coverage. In our view, this is clearly a coverage issue for the court to decide and is not arbitrable under the terms of the policy. N.J.S.A. 39:6-78. Accordingly, we reverse the order of March 14, 2008 directing the parties to arbitration and remand the matter to the trial court for discovery and ultimate determination on the question of whether the Georgia vehicle was insured at the time of the accident. Thereafter, the trial court shall make a determination as to whether there is coverage under the policy.
Reversed and remanded.
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