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Ortiz v. Zurich American Insurance

October 23, 2009

HECTOR ORTIZ AND REYNALDO BENAVIDES, PLAINTIFFS-APPELLANTS,
v.
ZURICH AMERICAN INSURANCE, A/K/A ZURICH NORTH AMERICA,*FN1 DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-4304-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted: September 30, 2009

Before Judges Collester and Fall.

Plaintiffs, Hector Ortiz and Reynaldo Benavides, appeal from an order entered in the Law Division on November 21, 2008, denying their motion for reconsideration of an order issued on October 7, 2008, that had denied their application to compel defendant Assurance Company of America, improperly pleaded as Zurich American Insurance, a/k/a Zurich North America, to submit to arbitration, and had granted defendant's cross motion, ruling that plaintiffs were ineligible for underinsured motorist benefits under a certain policy of automobile insurance issued by defendant to Garden State Flooring, Inc., plaintiffs' employer. We affirm.

The following factual and procedural history is relevant to our consideration of the issues presented on appeal. On May 13, 2005, plaintiffs were employed by Garden State Flooring, which was insured by Assurance Company of America under a certain policy of commercial motor vehicle insurance. Plaintiffs reported for work at 6:30 a.m., and loaded work materials into a van owned by Garden State Flooring and insured by defendant. With Ortiz driving, they traveled in the van to a jobsite in the Borough of Manhattan in New York City, arriving there shortly before 9:00 a.m. They first unloaded the work materials at the jobsite, and then drove the van to a parking space near the intersection of 81st Street and First Avenue. Plaintiffs left the van and began walking back to the jobsite, crossing 81st Street. Ortiz then realized they had forgotten to unload some material in the van needed to complete the job. Plaintiffs then began re-crossing 81st Street toward the van, and were struck by a vehicle being operated by Luis Marrero while they were within the crosswalk.

Marrero was insured by GEICO Insurance Company under a policy of motor vehicle insurance with liability limits of $25,000 per person and $50,000 per accident. Plaintiffs made a claim against Marrero for personal injuries suffered in the accident, and GEICO offered its policy limits of $50,000. Ortiz was insured under a policy of automobile insurance with High Point Insurance Company with underinsured motorist coverage of $100,000. High Point agreed to waive its underinsured subrogation rights and authorized Ortiz to tender a general release to GEICO after receiving a Longworth*fn2 letter from plaintiffs' counsel. Defendant's policy of commercial motor vehicle insurance insuring Garden State Flooring also contained underinsured motorist coverage. Defendant denied plaintiffs underinsured motorist benefits on the ground that plaintiffs were pedestrians at the time they were struck by Marrero's vehicle, and thereby were not "occupying" a covered vehicle at the time of the accident.

On August 25, 2008, plaintiffs filed a verified complaint against defendant, seeking judgment declaring plaintiffs were entitled to underinsured motorist benefits under defendant's policy insuring Garden State Flooring, and compelling defendant to arbitrate plaintiffs' claims. On September 5, 2008, the Law Division issued an order to show cause, directing defendant to show cause why the relief requested in the verified complaint should not be granted, originally returnable on September 26, 2008. On or about September 25, 2008, defendant filed a notice of cross motion, seeking an order declaring that plaintiffs were not entitled to underinsured motorist coverage benefits. There was no oral argument on the order to show cause and cross motion. On October 7, 2008, the court issued an order, granting defendant's cross motion, ruling that plaintiffs were not entitled to underinsured motorist coverage benefits under Garden State Flooring's commercial motor vehicle policy with defendant on the basis that at the time of the accident plaintiffs were not "in, upon, getting in, on or out of" the insured vehicle.

On October 20, 2008, plaintiffs filed a motion seeking to amend, alter or reconsider the October 7, 2008 order pursuant to R. 1:7-4 and R. 4:49-2. On November 21, 2008, the court denied plaintiffs' motion, "substantially for the reasons stated in the opposition."

On appeal, plaintiffs present the following argument for our consideration:

THE PLAINTIFFS WERE "OCCUPYING" THE INSURED VEHICLE AS THE COURTS HAVE INTERPRETED THAT PHRASE AND ARE ENTITLED TO UNDERINSURED MOTORIST COVERAGE UNDER THE [ASSURANCE COMPANY OF AMERICA] POLICY.

Section B(1)(b) of defendant's policy, entitled "Who Is An Insured," defines an insured as anyone "occupying" a covered auto. Section F(3) of the policy defines the term "occupying" to mean "in, upon, getting in, on, out or off."

In Torres v. The Travelers Indemnity Company, 171 N.J. 147, 148 (2002), the Court was faced with an identical definition of the term "occupying" in a policy of commercial automobile insurance company involving a claim by an employee of the insured seeking uninsured motorist benefits. The facts, however, were significantly different than here, and were outlined by the Court, as follows:

On the morning of February 15, 1994, plaintiff Franklin Torres was working in his capacity as a warehouse manager for Cornell Surgical Company (Cornell). A UPS truck came to Cornell's warehouse to drop off packages. Almost immediately after that truck left ...


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