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Montemurro v. Granite State Insurance Co.


December 21, 2009


On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-940-07.

Per curiam.


Submitted November 30, 2009

Before Judges Lisa and Alvarez.

Plaintiff, John Montemurro, appeals from a summary judgment in favor of defendant, Granite State Insurance Company, which enforced the step-down provision in the uninsured motorist (UM) endorsement to the commercial automobile insurance policy it issued to plaintiff's employer. The effect of the order was to preclude plaintiff from seeking to recover additional UM benefits from Granite State in excess of the UM benefits plaintiff recovered from his personal automobile insurance carrier. We find no error in the trial court's determination, and we accordingly affirm.

On August 14, 2001, plaintiff was injured in a vehicular accident while driving a vehicle owned by his employer and insured by Granite State. The policy period was from January 1, 2001 to November 1, 2001. The policy provided UM coverage in the amount of $1 million per accident. However, that coverage was qualified by a step-down provision limiting the UM coverage available to any employee of the insured to the amount of UM coverage in that employee's personal automobile policy. At the time of the accident, plaintiff had in effect a personal automobile insurance policy with UM limits of $100,000 per person/$300,000 per accident.

The accident was caused by an unidentified driver. Accordingly, UM coverage was applicable. Plaintiff recovered the full $100,000 limit from his personal automobile insurance carrier. He then brought this claim against Granite State, seeking to recover additional UM benefits under its policy.

On February 29, 2008, Granite State moved for summary judgment. It sought dismissal of the complaint, arguing that its step-down provision should be enforced. Such step-down provisions were not statutorily prohibited, and our Supreme Court had declared that they were enforceable. Pinto v. N.J. Mfrs. Ins. Co., 183 N.J. 405 (2005). However, in response to the Pinto decision, the Legislature enacted a statute, which became codified as N.J.S.A. 17:28-1.1f, effective September 10, 2007, reversing the Pinto holding and providing that such step-down provisions in employers' policies would be unenforceable.

In deciding Granite State's summary judgment motion, the judge was required to determine whether the amendatory statute should be given retroactive effect, in which case Granite State's policy would be reformed to eliminate the step-down provision. In a July 2, 2008 written decision, the judge so held. He entered an order on July 24, 2008 denying Granite State's motion.

On July 22, 2008, a panel of this court issued its opinion in Olkusz v. Brown, 401 N.J. Super. 496 (App. Div. 2008), holding that the amendatory statute was not curative because its purpose was not to correct a misinterpretation of an existing statute, but was to break new ground by overturning Pinto, which had been based on contract principles. Id. at 503. Accordingly, the panel held that the amendatory statute should be given prospective effect only, and that any UM claim based upon an accident predating adoption of the amendment must be governed by the legal principles articulated in Pinto. Id. at 506.

In light of the Olkusz decision, Granite State promptly filed a motion for reconsideration. Plaintiff did not oppose the motion. On October 24, 2008, following the Olkusz precedent, the trial judge entered an order granting reconsideration and reversing its order of July 24, 2008. Thus, summary judgment was granted in favor of Granite State and the complaint was dismissed.

We agree with the rationale and holding in Olkusz. We therefore find no error in the trial court's determination that the statute should be given prospective application, and in its dismissal of the complaint on that basis.

We are mindful that another panel of this court subsequently issued an opinion holding that the Legislature implicitly intended that the amendatory statute have retroactive effect. Hand v. Philadelphia Ins. Co., 408 N.J. Super. 124, 134 (App. Div.), certif. denied, ___ N.J. ___ (2009). However, the panel also held that retroactive application to the facts of that case would be unfair and would work a manifest injustice to the contractual rights of the employer's insurer. Ibid. The facts in Hand were materially similar to those here. Therefore, even if we agreed with the retroactivity analysis in Hand, we would likewise reach the same result, namely that the amendatory statute should not be retroactively applied in the case before us.



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