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Danchisko v. Harleysville Insurance Co.

February 19, 2009

RONALD DANCHISKO, PLAINTIFF-RESPONDENT,
v.
HARLEYSVILLE INSURANCE COMPANY, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-3969-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted: September 24, 2008

Before Judges C.L. Miniman and Baxter.

Defendant Harleysville Insurance Company (Harleysville) appeals from a November 2, 2007, order confirming an arbitration award in favor of plaintiff Ronald Danchisko (Danchisko) in the amount of $50,000 under the uninsured motorist (UM) coverage in the policy Harleysville issued to Danchisko's employer, Lift Rite Rentals, Inc. (Lift Rite), which covered its listed employees, including Danchisko.*fn1 We reverse and remand for the reasons expressed in this opinion. We need not address Harleysville's claim that the judge erred in denying its motion to intervene in the underlying tort action because that order was not included in the notice of appeal and the parties to the underlying tort action were not served with the notice of appeal, as would have been required by Rule 2:5-1(a). Thus, we do not have jurisdiction of the issue. See N.J. Div. of Youth & Family Servs. v. K.M., 136 N.J. 546, 550, 562 (1994).

Danchisko was involved in a motor vehicle accident that occurred on March 24, 2004. The police report indicates that defendant Matthew L. Rachmiel (Rachmiel) was driving south in the middle lane of the New Jersey Turnpike in Edison Township. Rachmiel claimed that a vehicle veered into his lane from the right and that he veered to the left and lost control of his vehicle. Danchisko, who was driving a van owned by Lift Rite, claimed that Rachmiel "was riding my bumper" and when Rachmiel tried to get into the left lane, he hit the rear of the Lift Rite van. Rachmiel spun around 180 degrees, impacted with the front of a third vehicle being driven by Jason C. King in the right-hand lane, and came to rest on the right shoulder headed north. Danchisko impacted the Jersey barrier on the left with the left front of the van, crossed the southbound lanes, and struck the right guardrail with the right front of the van. King corroborated Danchisko's version of the accident. The State Trooper investigating the accident charged Danchisko with careless driving in violation of N.J.S.A. 39:4-97.

On September 30, 2004, Danchisko notified Harleysville that he was making a UM claim against it and designated his arbitrator. That claim was not pursued at that time.

Danchisko filed a personal injury action against Rachmiel in Middlesex County under Docket No. MID-L-0156-06 (the underlying tort action). While that action was pending, Danchisko notified Harleysville on February 26, 2007, that he intended to renew a UM claim under Lift Rite's policy based primarily on Rachmiel's claim of a phantom vehicle because Rachmiel's carrier was not stipulating to liability.

While Harleysville's motion to intervene was pending, Danchisko instituted another action in Middlesex County under Docket No. MID-L-3969-07 against Harleysville seeking, among other things, to compel it to participate in uninsured motorist arbitration and on May 3, 2007, the judge assigned to the matter entered an order requiring Harleysville to appear on June 26, 2007, and show cause why the relief sought in the complaint should not be granted.

When the parties appeared on May 25, 2007, the judge stated that "there was a request to handle both" the order to show cause and the motion to intervene at the same time and that he would address both applications because there was a trial date on June 4, 2007. Danchisko argued that the motion to intervene should be denied because he was ready for trial and had a right to present his claim against Harleysville to arbitrators, not a jury and because a jury in the tort action against Rachmiel would never be called upon to decide the liability of a phantom driver.

Harleysville responded that Allstate Insurance Company, Rachmiel's carrier, had agreed to accept 100 percent liability and arbitrating the UM claim could lead to inconsistent results on liability. It also argued that it should be allowed to intervene because, if an arbitral award was over $15,000, it had a right to bring the UM claim into court for a trial de novo. Harleysville represented that it would be ready for trial on June 4 and would not request an adjournment if it was allowed to intervene.

The judge placed his decision on the record on May 25, 2007. He explained that he was denying the motion to intervene because it was not timely, as Rule 4:33-1 required, and because the case was ready for trial and intervention would inevitably delay that trial. Additionally, he found that intervention would not benefit Harleysville because it had a contractual obligation to arbitrate the UM claim. The judge then granted the relief sought in the complaint seeking to compel arbitration.

The arbitration proceeded on August 23, 2007, and a majority of the arbitrators found for plaintiff "100%" on the issue of liability and awarded Danchisko $50,000 in UM benefits. Harleysville rejected the arbitration award on September 4, 2007, in a notice sent to Danchisko's attorney by certified mail and served again on September 18 by facsimile and Lawyers Service. Harleysville demanded a trial de novo because its policy . . . provides among other things, that where the amount of the damages award entered exceeds the minimum limits for liability specified by the financial responsibility laws of New Jersey either party may demand the right to a trial provided the demand is made within 60 days of the arbitrators' decision. Even though Harleysville . . . has rejected the award, it is the obligation of your client to commence an action to compel payment under the UM/UIM endorsement.*fn2 Verbeiest v. N.J.A.F.I.U.A., 256 N.J. Super. 85, 89 (App. Div. 1992).

However, Danchisko had already filed a "notice of motion to confirm the arbitration award pursuant to N.J.S.A. 2:24-7." On September 20, 2007, the judge entered an order in the tort action confirming the arbitration award entered against Harleysville. He indicated on the order that the motion was not opposed. This triggered a motion for reconsideration on September 26, 2007, which was heard on November 2, 2007. Harleysville maintained that changes to the ...


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