On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-4905-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo and Lihotz.
Defendant Government Employees Insurance Company (GEICO) appeals from a Law Division order denying its summary judgment motion in favor of plaintiffs James and Carol Hucklebridge. Accordingly, GEICO, a New Jersey licensed insurance company, was compelled to provide insurance benefits under plaintiffs' automobile insurance policy for injuries they sustained in a motorcycle accident. GEICO argues an unambiguous exclusion in its policy bars benefits for injuries experienced as a result of plaintiffs' use of their motorcycle, which was insured by a different carrier and, therefore, the trial court erred in denying its motion. We agree and reverse.
On August 21, 2005, plaintiffs were operating their 2001 Honda Goldwing motorcycle. James was driving and Carol was a passenger when they were involved in an accident with an automobile. Plaintiffs settled their liability claim with the third-party automobile operator for the driver's $50,000 policy limit. However, plaintiffs allege they suffered injuries surpassing the amount received from the third party's insurance coverage and they filed claims with GEICO.
Plaintiffs own three automobiles covered under their GEICO policy. However, plaintiffs' insure their motorcycle with Foremost Insurance, which is not a party to this action. The GEICO policy includes underinsured motorist (UIM) coverage of $100,000 per person and $300,000 per accident, which will pay damages for bodily injury and property damage caused by an accident which the insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle or underinsured motor vehicle arising out of the ownership, maintenance or use of that vehicle.
GEICO denied plaintiffs' claim, citing an enumerated policy exclusion barring UIM coverage for bodily injury sustained by an insured while occupying a motor vehicle owned by an insured and not described in the Declarations and not covered by the Bodily Injury and Property Damage liability coverages of this policy.
In the letter disclaiming coverage, GEICO explained bodily injury and property damage liability coverage applied only to "owned" and "non-owned" vehicles and the motorcycle which was involved in this event does not qualify as an owned auto, specifically since [plaintiffs] own the motorcycle, and insure it under a separate policy with Foremost Insurance it therefore is not a vehicle for which a premium charge is shown [on the policy's declaration sheet]. Additionally, the motorcycle is . . . not considered to be a non-owned auto because [plaintiffs] owned [it].
GEICO reasons that plaintiffs' injuries were caused while operating a motor vehicle they owned but that was not described in the declaration sheet, thus barring coverage under the policy for any loss.
Following GEICO's denial of their claim, plaintiffs filed a declaratory judgment action in the Law Division seeking a finding they were eligible to claim UIM benefits under the GEICO policy. The coverage issue was presented on cross-motions for summary judgment. The motion judge found the exclusion applied only if the term "motor vehicle" included motorcycles. Based on the policy's "failure to, at the very least, define what a motor vehicle [wa]s," the motion judge concluded the UIM exclusion was ambiguous and unenforceable. Accordingly, an order was entered granting plaintiffs' motion and compelling GEICO to provide the UIM benefits within the limits of its policy.*fn1
On appeal, GEICO argues the motion judge's determinations were erroneous as "the format and language of the exclusion are unambiguous." The exclusion unambiguously bars coverage for loss sustained by the insured while operating uncovered motor vehicles they owned but chose not to insure under the policy. GEICO maintains the policy's omission of a definition for the term "motor vehicle" requires that the undefined term be given its ordinary meaning. Further, GEICO argues public policy concerns support its position; otherwise, people would "purchase high limits of coverage on only one vehicle and . . . insure all the other vehicles under lower-limit policies."
Plaintiffs counter, as they did before the trial judge, that the failure to define "motor vehicle" renders the exclusion ambiguous and unenforceable. Plaintiffs additionally identify another section of the GEICO policy injecting further ambiguity into the scope of coverage. Referring to the personal injury protection (PIP) section of the policy defining "auto" as a self-propelled vehicle not including motorcycles, plaintiffs assert GEICO "has specifically excluded coverage for motorcycles in another portion of the policy which might well lead an insured to understand that if motorcycles are to be excluded then they would be expressly mentioned in that exclusion."
The interpretation of an insurance contract is a question of law, subject to de novo review. Manalapan Realty, L.P. v. Tp. Comm. of Manalapan, 140 N.J. 366, 378 (1995); Sealed Air Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 375 (App. Div.) ("The interpretation of contracts and their construction are matters of law for the court subject to de novo review."), ...