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Christie v. American International Insurance Co. of New Jersey


July 13, 2010


On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-140-07.

Per curiam.


Argued June 1, 2010

Before Judges R. B. Coleman and Alvarez.

Plaintiff Norman M. Christie appeals the August 28, 2009 grant of summary judgment to defendant American International Insurance Company of New Jersey. We affirm.

Plaintiff was injured in an automobile accident on September 16, 2003. He was insured under a liability policy issued by defendant which provided $100,000 of underinsured motorist (UIM) coverage. The policy also provided for arbitration of any dispute regarding coverage.

The other driver's insurance carrier tendered the $50,000 policy limit to plaintiff on July 26, 2006. Thereafter, plaintiff filed suit against defendant to compel arbitration. On March 5, 2009, the arbitrators determined that the other driver was 100 percent liable for the accident and that plaintiff's total damages were $65,000. After deducting the $50,000 paid by the other driver's insurer, the arbitrators awarded plaintiff "$15,000 net" in UIM benefits.

Plaintiff's policy provides:

C. . . . A decision agreed to by two of the arbitrators will be binding as to . . .

(2) the amount of damages. This applies only if the amount does not exceed the minimum limit for liability specified by the financial responsibility law of New Jersey. If the amount exceeds that limit, either party may demand the right to a trial. This demand must be made within 60 days of the arbitrators' decision.

The minimum limit for liability specified by the Financial Responsibility Law of New Jersey is $15,000. N.J.S.A. 17:28-1.1.

Defendant's motion for summary judgment*fn1 sought dismissal of the complaint based on the $15,000 arbitration award. Defendant contended the award was binding under the policy language and that therefore plaintiff had no right to trial on the UIM claim. Plaintiff defended the motion on the theory that the policy language created an ambiguity that must be construed in his favor and that the actual arbitrator's award was for the gross amount of $65,000, not $15,000. This is the sum and substance of plaintiff's argument on appeal as well.

As we have often reiterated, a reviewing court considers summary judgment orders de novo, applying the same standard governing the trial court under Rule 4:46-2(c). See Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007). Generally, the court must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). See also R. 4:46-2(c).

The court granted defendant's motion in reliance upon D'Antonio v. State Farm Mutual Insurance Co., 262 N.J. Super. 247 (App. Div. 1993). We agree with his conclusion that D'Antonio is squarely on point.

The relevant policy provision in D'Antonio is, word for word, the same as the provision in plaintiff's policy. See id. at 249. In that case, plaintiff recovered $25,000 from the responsible driver, thereby "exhausting his insurance coverage." Id. at 248. At arbitration, the plaintiff was awarded the gross sum of $40,000, meaning that after the payment made by the responsible driver was deducted, the insurer was to pay only $15,000 in UIM benefits. Id. at 248-49.

As in this case, the plaintiff argued that she was entitled to a trial because, since "damages" was not defined in the policy, the arbitration award was her gross recovery of $40,000 not the $15,000 net. Id. at 249. To the contrary, we found the meaning of the term "damages" to be "evident," referring only to actual additional payments resulting from the arbitration proceeding. Ibid.

As we said, the thrust of the limit is to reduce the number of post-arbitration trials to those cases "of a certain magnitude." Ibid. Furthermore, "[t]he parties' purpose in foreclosing trials in modest cases would be substantially frustrated if the right to demand a trial turned on the damages attributable to the underinsured tortfeasor." Id. at 250.

That rationale still controls, and the clear meaning of D'Antonio is as true today as it was seventeen years ago. To construe the policy language as plaintiff urges would render it meaningless in the context of UIM coverage. If plaintiff's argument prevailed, any award as a result of a UIM arbitration - even if only a dollar - would mean a jury trial could always be demanded. Ibid. Arbitration as called for in the relevant policy provision would therefore never be binding. This reading of the policy defies logic.

We do not agree with plaintiff that ambiguity actually exists in any event. The actual amount received as a result of the arbitration proceeding was the net sum of $15,000, not the overall recovery.


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