April 28, 2009
NUFRY KARTALIS, PLAINTIFF-RESPONDENT,
STEVEN R. HANSON, MERRICK ENTERPRISES, DEFENDANTS, AND MET LIFE AUTO & HOME, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1061-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 28, 2009
Before Judges Payne and Waugh.
Plaintiffs Nufry and Helen Kartalis sustained physical injuries in an automobile collision on January 18, 2006 with a vehicle driven by defendant Steven R. Hanson and owned by defendant Merrick Enterprises. Each instituted a separate action against Hanson and Merrick. Nufry Kartalis's complaint also named as a defendant his auto insurance carrier, Met Life Auto & Home, from which he sought underinsured motorist (UIM) coverage. The two actions were consolidated by court order on July 13, 2007. Thereafter, defendants Hanson and Merrick Enterprises brought a third-party complaint against Nufry Kartalis as driver of plaintiffs' vehicle.
The Kartalises were insured under a Met Life policy providing split limit UIM coverage of $250,000 per person and $500,000 per accident. An Ohio Casualty Insurance Company commercial liability policy insuring the vehicle driven by Hanson afforded single limit liability coverage of $500,000. On November 16, 2007, the court ordered, in accordance with the relief sought by defendants, that the full $500,000 covering Merrick Enterprise's vehicle be deposited in court pursuant to Rule 4:57.
In a motion filed on October 15, 2007, Met Life sought summary judgment dismissing Nufry Kartalis's complaint against it, arguing that because the limits of UIM coverage provided to the Kartalises in their Met Life policy did not exceed the limits of liability coverage provided to defendants by Ohio Casualty, UIM benefits were unavailable. See Staub v. Hanover Ins. Co., 251 N.J. Super. 66, 68 (App. Div. 1991) (holding that where more than one person has been injured by a tortfeasor, to determine whether UIM coverage is available, a comparison must be made between the tortfeasor's per accident liability limit and the per accident limit of the claimants' UIM coverage, not the per person UIM limit that would apply if only one person were injured). The motion was denied in an order dated November 30, 2007, and a subsequent motion for reconsideration was denied on February 1, 2008.
Despite rulings to the contrary, Met Life adhered to its position that, because the per accident limits of UIM coverage available to the Kartalises were identical to the limits of liability coverage available to the tortfeasors, no UIM coverage existed. That position was expressed to the court in a hearing conducted on April 11, 2008, in the presence of attorneys for all of the parties, which initially addressed the motion of counsel for Nufry Kartalis to withdraw from representation, but later resulted in settlement of Helen Kartalis's claim by the payment of the $500,000 liability limits of the Ohio Casualty policy plus interest and referral of Nufry Kartalis's UIM claim to an arbitration proceeding to be conducted within 120 days. Counsel for Met Life consented on the record to the settlement and waived the company's right to subrogation against the tortfeasor. An order of settlement was entered on April 22, 2008, and in accordance with its terms, Nufry Kartalis's claim was dismissed without prejudice pending arbitration.
Thereafter, Met Life unsuccessfully moved to stay the arbitration of the UIM claim to permit resolution of an appeal of the trial court's denial of summary judgment on the coverage issue. Following the filing of its appeal, Met Life moved before us for a stay of the arbitration, and its motion was again denied.
On appeal, Met Life once more asserts the unavailability of UIM coverage under its policy. Having considered the arguments of the parties in light of the record on appeal, we conclude that Met Life's appeal is interlocutory in nature as the result of the parties' consent to arbitration as part of the settlement reached in this matter, and we decline to address it. See R. 2:2-3(a). Although the record is not clear as to the course that the parties intended to follow, evidence of the parties' working conclusion that Nufry Kartalis's potential recovery on his claim was $75,000, together with their recognition that he could nonetheless recover nothing strongly suggests that the parties contemplated either that the coverage issue would be determined anew in arbitration or that Met Life retained the right to appeal from the trial court's adverse determination of the coverage issue following arbitration. Indeed, the order of settlement provides in this respect: "[I]n the event of an adverse result in the UIM claim, Helen Kartalis shall pay to Nufry Kartalis $50,000 (fifty thousand) representing what would have been his share of the $75,000 (seventy-five thousand)" utilized as the claim's working value.*fn1
The scope of UIM arbitration is solely a matter of contract. State Farm Mut. Auto. Ins. Co. v. Molino, 289 N.J. Super. 406, 412 (App. Div. 1996); Cynthia M. Craig & Daniel J. Pomeroy, New Jersey Auto Insurance Law at § 23:1 (Gann 2009) (discussing uninsured motorist (UM) arbitration). Because we have not been provided with the Met Life policy applicable to this claim, we do not know specifically the terms of its UM/UIM arbitration provisions. We assume, however, that the policy's terms reflect the language of the Standard Personal Automobile Policy set forth by Craig & Pomeroy as Appendix C-1, Part B, to their auto insurance treatise, which empowers a UM/UIM arbitrator to determine "whether th[e] insured is legally entitled to recover damages." See also Ohio Cas. Ins. Co. v. Benson, 87 N.J. 191, 198-99 (1981) (in hit-and-run context, construing arbitration clause as permitting arbitrator to determine the existence or not of phantom driver). In any event, the parties can confer such authority upon the arbitrator. In re Grover, 80 N.J. 221, 228-29 (1979).
In this case, the parties entered into a settlement in which they agreed "that Nufry Kartalis shall proceed to UIM Arbitration." That settlement constitutes a valid contract, Nolan v. Lee Ho, 120 N.J. 465, 472 (1990), that we have no occasion to disturb. Pascarella v. Bruck, 190 N.J. Super. 118, 125 (App. Div.), certif. denied, 94 N.J. 600 (1983).
As the result of the foregoing, we dismiss this appeal without prejudice to any later appeal that the parties may wish to file from a final determination of this matter.