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Hand v. Philadelphia Insurance Co.

July 1, 2009

DONNA HAND, PLAINTIFF-RESPONDENT,
v.
PHILADELPHIA INSURANCE COMPANY, DEFENDANT-APPELLANT,
v.
AAA MID-ATLANTIC INSURANCE COMPANY, THIRD-PARTY DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Divison, Camden County, Docket No. L-1738-07.

The opinion of the court was delivered by: Messano, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued November 6, 2008

Before Judges Parrillo, Lihotz and Messano.

On January 19, 2005, an SUV owned and operated by Leroy Gorman crossed the median of State Highway 42 and collided with a car owned by Steininger Behavioral Care (Steininger), the employer of plaintiff Donna Hand, a passenger in the vehicle. Plaintiff was seriously injured as a result. Steininger's car was insured under a commercial automobile policy issued by defendant Philadelphia Insurance Company that provided uninsured/underinsured motorist (UM/UIM) coverage in the amount of $1 million. Named "insureds" on the declarations page of the policy included Steininger, SCBS Supportive Housing I, Inc., and Guidance Center of Camden County, Inc.*fn1 The policy further provided that "[i]f the [n]amed [i]nsured" was "[a] partnership, limited liability company, corporation or any other form of organization," then additional "insureds" under the policy included "[a]nyone 'occupying' a covered 'auto' . . . ." The policy included a step-down provision that expressly limited the amount of UM/UIM coverage if

(1) An insured [wa]s not the individual named insured under th[e] policy;

(2) That "insured" [wa]s an individual named insured under one or more other policies providing similar coverage; and

(3) All such other policies ha[d] a limit of insurance for similar coverage which [wa]s less than the [l]imit of [i]nsurance for th[e] coverage[.]

Under these circumstances, "the most [defendant] w[ould] pay for all damages resulting from any [] 'accident' with an 'uninsured' . . . or 'underinsured motor vehicle'" would be limited to "the highest applicable limit of insurance under any coverage form or policy providing coverage to that 'insured' as an individual named insured."

Gorman's insurance limit was $100,000. After receiving notification from plaintiff pursuant to Longworth v. Van Houten, 223 N.J. Super. 174 (App. Div. 1988), defendant authorized settlement with Gorman for the full policy amount. Plaintiff then made a claim for UIM benefits under Steininger's policy and demanded arbitration.

Defendant denied plaintiff's claim, contending that because plaintiff's personal automobile insurance policy, issued by third-party defendant AAA Midatlantic Insurance Company (AAA), contained a UM/UIM limit of $100,000, the step-down provision in Steininger's policy became operational.*fn2 As a result, the available UIM limit under the policy was $100,000, thus, Gorman's vehicle was not underinsured, and plaintiff had no claim for UIM benefits.

On April 2, 2007, plaintiff filed her complaint seeking to compel arbitration. On April 27, 2007, defendant filed its answer asserting the step-down provision as a defense. Thereafter, on September 10, 2007, the Governor signed S-1666, the so-called "Scutari Amendment" (the Amendment), ultimately codified as N.J.S.A. 17:28-1.1(f), which we discuss in greater detail below.*fn3

Defendant and plaintiff both filed motions for summary judgment, returnable November 2, 2007. Defendant argued that Pinto v. N.J. Manuf. Ins. Co., 183 N.J. 405 (2005), upholding the validity of step-down provisions in commercial automobile policies, was applicable to plaintiff's claim because the Amendment did not expressly provide for its retroactive application. Defendant further contended that retroactivity would result in "unconstitutional interference with a vested right" and violated due process.*fn4

In response, plaintiff argued that the Legislature unambiguously expressed its intent to apply the Amendment retroactively. Alternatively, plaintiff contended that even if the Amendment were ambiguous in this regard, extrinsic sources routinely utilized in statutory interpretation compelled the same result. In particular, plaintiff argued the Amendment was "curative[,]" i.e., a legislative response to the Supreme Court's holding in Pinto intended to correct the Court's misapplication of the UIM statute.

In an oral opinion placed on the record, the motion judge concluded the Amendment should be applied retroactively, and accordingly, granted summary judgment in favor of plaintiff.*fn5

The judge's decision was memorialized in an order dated the same day, and defendant's appeal ensued.*fn6

I.

On appeal, defendant argues that the Amendment should be given only prospective application because it does not "pass the first prong of the inquiry set forth in Twiss v. State, Dep't of Treasury, [124 N.J. 461 (1991)]." Specifically, defendant contends the Legislature did not "clearly express its intent" regarding retroactivity, "the reasonable expectations of insurers and insureds do not warrant retroactive application[,]" and the amendment was not "curative[.]" Defendant further argues that retroactive application "would result in a manifest injustice to insurers[.]" Lastly, defendant notes that since the appeal was filed and briefed, a panel of our colleagues decided Olkusz v. Brown, 401 N.J. Super. 496 (App. Div. 2008), determining the Amendment lacked express, unambiguous language evidencing retroactivity, was not "curative" and, thus, did not apply retroactively. Defendant contends we should reach the same result.*fn7

In urging us to affirm the motion judge's ruling, plaintiff asserts similar arguments to those she raised below. Both amicus curiae filed briefs supporting the motion judge's decision to apply the statute retroactively.

When reviewing a grant of summary judgment, we employ the same standards used by the motion judge. Atl. Mut. Ins. Co. v. Hillside Bottling Co., Inc., 387 N.J. Super. 224, 230 (App. Div.), certif. denied, 189 N.J. 104 (2006). We first determine whether the moving party has demonstrated there were no genuine disputes as to material facts; we then decide "whether the motion judge's application of the law was correct." Id. at 230-31. We owe no deference to the motion judge's conclusions on issues of law. Id. at 231 (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)). Here, the essential facts were not ...


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