On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-2842-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo and Messano.
On December 4, 2003, plaintiff Robert Phelps was injured in an automobile accident while operating a 2001 Ford Econoline van owned by his employer, Specialty Supply Company Inc. (Specialty). Terry Thompson, the driver of the other car, maintained automobile insurance through a policy issued by Farmer's Insurance (Farmer's) that provided bodily injury liability coverage of $100,000 per injured person. Phelps settled with Farmer's for the policy limit.
Specialty's van was covered under a policy of insurance issued by defendant, Hartford Insurance Group (Hartford), on May 1, 2003, and effective until May 1, 2004. That policy contained uninsured/underinsured (UM/UIM) motorist coverage limits in the amount of $1,000,000. In relevant part, the policy's endorsement stated that if "the Named Insured" was "[a] partnership, limited liability company, corporation, or any other form of organization," anyone "occupying" a covered vehicle was deemed an "Insured." The policy also contained a step-down clause that provided if:
(1) [a]n "insured" [wa]s not the individual named insured under th[e] policy;
(2) [t]hat "insured" [wa]s an individual named insured under one or more other policies providing similar coverage; and
(3) [a]ll such other policies have a limit of insurance for similar coverage which is less then the [l]imit of insurance for this coverage; then the most [Hartford would] pay for all damages resulting from any one accident with... an 'underinsured motor vehicle' [would] not exceed the highest applicable limit of insurance under any coverage from a policy providing coverage to that "insured" as an individual named insured.
At the time of the accident, plaintiff maintained his own personal automobile insurance through a policy issued by Security Indemnity Company. That policy contained UM/UIM motorist coverage with a limit of $50,000 per person.
Plaintiff notified Hartford on October 22, 2004, that he intended to make a claim for UIM benefits under Specialty's policy. On February 14, 2005, Hartford denied plaintiff's claim, citing the step-down provision. On June 6, 2007, plaintiff filed this complaint seeking declaratory relief that the step-down clause in Hartford's policy was invalid.
On September 11, 2007, the Legislature enacted the so-called Scutari Amendment (the Amendment), now codified at N.J.S.A. 17:28-1.1, which we discuss in greater detail below. Shortly thereafter, plaintiff moved for summary judgment, and Hartford cross-moved for the same relief. Plaintiff argued 1) that the Legislature implicitly intended the amendment be applied retroactively; 2) that the Amendment was "curative,"
i.e., the Legislature intended to correct the Court's decision in Pinto v. N.J. Mfrs. Ins. Co., 183 N.J. 405 (2005); and 3) that retroactive application was consistent with public policy and the reasonable expectations of the parties. Alternatively, plaintiff contended that defendant's cross-motion should be denied because factual questions remained disputed regarding "what kind of notice was given to the insured, what kind of duty did the carrier have to inform the insured, [and] what w[ere] the options... given to the insured." Hartford argued the step-down provision was valid in light of Pinto, and that the Amendment should not be given retroactive effect for a variety of reasons.
On July 28, 2008, the motion judge denied plaintiff's motion, granted Hartford's cross-motion, and dismissed the complaint. In a brief statement of reasons, the judge, relying upon our holding in Olkusz v. Brown, 401 N.J. Super. 496 (App. Div. 2008), concluded "the statutory prohibition contained in N.J.S.A. 17A:28-1.1 is not retroactive in effect." He also concluded there was no material factual dispute as to the notice issue that would preclude summary judgment because "the Hartford policy involved here expired well before ...