On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-1887-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lisa and Reisner.
By leave granted, plaintiffs, Michael Orodenker and William Cocker, Jr., appeal from a January 24, 2008 order granting partial summary judgment to defendant, Selective Insurance Company of America, based on a step-down clause in the Underinsured Motorist (UIM) provision of its policy, and a March 27, 2008 order denying reconsideration. Plaintiffs argue that the trial court erred because (1) plaintiffs should be deemed "named insureds" by implication under the terms of Selective's policy, (2) the step-down provision does not apply because the UIM provisions in their personal policies did not provide "similar coverage" to that provided by Selective, and (3) N.J.S.A. 17:28-1.1f, which renders unenforceable step-down provisions in employers' policies such as Selective's, should be given retroactive application. We reject these arguments and affirm.
Plaintiffs were employees of Jordan's Ornamental Iron Works, LLC. On December 3, 2002, they were passengers in a vehicle owned by their employer and insured by Selective under a commercial business automobile insurance policy. They were involved in an accident caused by the driver of another vehicle, Marcia Powell. Each plaintiff settled with Powell's insurance carrier for $100,000, the limits of her liability coverage.
At the time of the accident, Orodenker was a named insured on his own personal automobile insurance policy issued by State Farm Indemnity Company. This was a standard New Jersey policy, and it contained $100,000 UIM limits. At the time of the accident, Cocker's parents were named insureds on a personal automobile policy issued by Prudential Property and Casualty Insurance of New Jersey, which was also a standard New Jersey policy, containing $100,000 UIM limits. For purposes of our analysis, we assume without deciding that Cocker was a resident of his parents' household at the time of the accident, and thus covered under the Prudential policy.*fn1
The Selective policy contained $300,000 combined single limits UIM coverage. However, that coverage was subject to a step-down provision which limited UIM coverage available to anyone other than the named insured to the amount of UIM coverage available to that individual in a personal automobile policy in which the individual is a named insured or a family member of a named insured, provided the personal policy provided "similar coverage" to that in Selective's policy.
On the declaration page of the Selective policy, the named insured was identified as Jordan's Ornamental Iron Works, LLC. Below that designation, in the space provided for "Named Insured is:" the word "INDIVIDUAL" was inserted. According to Selective, this was an "innocuous error," having no legal significance in the interpretation of the policy. According to plaintiffs, use of the word "individual" is legally significant and triggers consideration of another provision in the UIM portion of the policy under the caption "Who Is An Insured," which provides:
If the Named Insured is designated in the Declarations as:
1. An individual, then the following are "insureds":
a. The Named Insured and any "family members".
b. Anyone else "occupying" a covered "auto" or a temporary substitute for a covered "auto". The covered "auto" must be out of service because of its breakdown, ...