July 16, 2010
NEIL HOFSTROM, PLAINTIFF-APPELLANT,
PACIFIC EMPLOYERS INSURANCE COMPANY, ACE USA CLAIMS, AND ESIS, DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Law Division, Civil Part, Gloucester County, Docket No. L-946-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE COMMITTEE ON OPINIONS
Argued June 3, 2010
Before Judges Stern and Graves.
In this automobile insurance coverage case, plaintiff Neil Hofstrom appeals from an order dated August 27, 2009, that denied his request for arbitration of an uninsured motorist (UM) claim and dismissed his complaint. Plaintiff sustained personal injuries in a one-car accident on May 27, 2002, while working on assignment in St. Croix, U.S. Virgin Islands. The court determined the rental car plaintiff was driving was not covered under a commercial automobile insurance policy issued by defendants to plaintiff's employer, Praxair, Inc. (Praxair).
Plaintiff argues on appeal, as he did below, that he is entitled to UM benefits because the policy issued to Praxair contains an ambiguity, which must be resolved in his favor. After carefully considering the record, we find the policy is not ambiguous when read as a whole and we affirm the order denying plaintiff's demand for arbitration of his UM claim.
In 2002, plaintiff, a New Jersey resident, was employed by Ucisco, an entity owned by Praxair. Praxair's principal place of business is in Danbury, Connecticut, and its insurance provider in 2002 was Marsh U.S., Inc., a business entity in New York. Plaintiff reported to an office in Burlington, New Jersey. Defendant carrier Pacific Employers Insurance Company and defendants ACE USA CLAIMS and ESIS (collectively, defendants or PEIC) provided Praxair with commercial business auto insurance through Policy No. SCA H07970316 (the policy) for the period from June 30, 2001, through June 30, 2002. Therefore, the policy was in effect when plaintiff was injured on May 27, 2002. Plaintiff also had a personal automobile insurance policy with AIG at the time of the accident.
On May 27, 2002, plaintiff was operating a 2002 four-door Chevy Cavalier leased from Hertz*fn1 while he was on assignment in St. Croix, U.S. Virgin Islands. Plaintiff was traveling westbound on Route 62 in St. Croix when he took evasive action to avoid an unidentified vehicle traveling eastbound that crossed the center line. Plaintiff sustained personal injuries when the car he was driving rolled over.
In a verified complaint and order to show cause filed pursuant to N.J.S.A. 2A:24-3 and Rule 4:67-1(a), plaintiff claimed he was entitled to uninsured motorist benefits under the policy issued by defendants, and sought an order compelling defendants "to appoint an arbitrator and appear for a UM hearing." Plaintiff claimed "[s]everal demands for arbitration have been made upon Defendants to appoint an arbitrator in order to commence UM proceedings but to no avail. The carrier has failed or refused to respond in any regard. . . . [i]n violation of its obligations under the policy." On June 5, 2009, the trial court ordered defendants to file a response by July 7, 2009, and to appear on July 24, 2009, to show cause why the matter should not proceed to arbitration. On July 7, 2009, defendants filed an answer with nine affirmative defenses.
At oral argument on July 24, 2009, plaintiff claimed the automobile insurance policy issued to Praxair was ambiguous, because the Business Auto Declarations page referenced a "Truckers Coverage Form" not included in the policy to define the vehicles with UM coverage. Plaintiff argued that this created an ambiguity and that the vehicle he was driving was covered for UM purposes.
Defendants argued the policy was not ambiguous and directed the court to a different page of the policy, the Business Auto Coverage Form. This form indicated plaintiff was not entitled to UM benefits because Praxair did not "own" the vehicle and because the car was principally registered and garaged in the U.S. Virgin Islands, which, unlike New Jersey, does not require motorists to carry UM coverage.
At a subsequent hearing on August 26, 2009, the court considered a certification by Thomas Groves, an underwriter manager for defendant ACE USA. Groves stated: "As a general matter, commercial auto insurance policies do not provide uninsured motorist coverage for hired non-owned vehicles," and he concluded that Praxair's policy did "not provide uninsured motorist coverage for hired non-owned vehicles."
Following oral argument, the court rendered an oral decision, which included the following:
And then, there's a form 00010797 that is the Business Auto Coverage form. It lists the various symbols, which are basically numerics, and you go back to the [declaration] page, and the uninsured motorist, which is the insurance coverage at play, references just the number 6. And, 6, when you look at the Business Auto Coverage form, defines autos as you own, that because of the law of the state where you are licensed or principally garaged are required to have and cannot reject uninsured motorist coverage. This includes those autos you acquire ownership of after the policy begins, provided they are subject to the same state uninsured motorist requirements.
And so, the position of the defense is that the Virgin Islands, where this accident occurred, where the rental was acquired, does not mandate uninsured motorist, and as a result -- and it's also not a car owned by Praxair, Ucisco, or the operator, the plaintiff in this case, that it's not listed as a covered item.
Underneath the column called "Covered Autos," is the language that plaintiff is urging as creating the ambiguity for coverage purposes, and it basically references you to a different schedule, and it's the covered auto section of the Trucker's Coverage form, and that coverage is form 00120797, and it's the Trucker's Coverage form, and it provides symbols 41 through 49, and then the coverage language is at Section B, page 2 of 12, if symbols 41 through 45 are entered next to the coverage in item 2 of the declarations, then you have coverage for autos that you acquire of the type described the remainder of the policy period. And then, it goes on with number 46.
Under any circumstance, when you go back to the Business Auto Declaration page, which is the page that basically describes the coverage you're getting, the only number appearing is 6. Does the top of the page refer you to two separate schedules of the policy? [That] can't be debated. It does reference you to the Business Auto Coverage form, which includes the reference to 6; it also refers you to the Trucker Coverage form, which references you to symbols 41 through 49.
I can't find at the end of the day . . . that there's an ambiguity. . . . I look at both of those forms, the only number that corresponds to the forms is 6. Had there been another reference to another number that perhaps could describe the vehicle [that plaintiff] was operating, then it would seem to me there's ambiguity and confusion. But, at the end of the day . . . the clear direction is that coverage for UM is solely for the vehicles that are described at number 6. . . .
And, again, had there been another number in there that perhaps would have lent itself to confusion on the Trucker's Coverage form, it would be a different debate, but there has to be an express reference to a number, and the only number that's expressed is 6, and the only 6 that's referenced in either the Trucker's Coverage [f]orm, or the Business Auto Coverage form, is 6, which clearly does not fit our vehicle. And, as a result of that, I'm satisfied that the defense is correct in their position that [the] policy doesn't provide coverage to the plaintiff in this particular circumstance for UM.
And, as a result of that, I'm satisfied that there is no basis to send it on to arbitration. So I'll deny the Order to Show Cause relief, which is to forward it to arbitration.
On appeal, plaintiff presents the following argument:
BASED ON PATENT AMBIGUITIES IN THE SUBJECT AUTOMOBILE INSURANCE POLICY, AND THE AXIOM THAT SUCH AMBIGUITIES SHOULD BE RESOLVED AGAINST THE DRAFTING PARTY, PLAINTIFF NEIL HOFSTROM SHOULD HAVE BEEN COVERED UNDER DEFENDANTS' UNINSURED MOTORIST BENEFITS, AND THEREFORE THE LAW DIVISION DECISION MUST BE REVERSED.
A. THE SUBJECT POLICY IS DRAFTED AMBIGUOUSLY
Plaintiff also asserts, for the first time on appeal, that the trial court lacked subject matter jurisdiction to enter its ruling and that arbitration should be conducted in Connecticut based on the UM endorsement attached to the policy.
After considering these contentions in light of the record and the briefs, and oral argument, we are satisfied they do not warrant extended discussion in a written decision. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons stated by Judge Morgan, with only the following comments.
The interpretation of an insurance contract is a determination of law. Sealed Air Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 375 (App. Div.), certif. denied, 196 N.J. 601 (2008). We therefore owe no special deference to a trial court's interpretation of the law and the legal consequences that flow from the established facts. Zabilowicz v. Kelsey, 200 N.J. 507, 513-14 (2009). Accordingly, we review the Law Division's analysis of Praxair's policy de novo. Homesite Ins. Co. v. Hindman, 413 N.J. Super. 41, 46 (App. Div. 2010).
In the present matter, we are satisfied the record fully supports the trial court's conclusion that the policy issued to Praxair did not provide UM coverage for the vehicle plaintiff was driving on May 27, 2002. In fact, plaintiff concedes: "At first blush, symbol No. 6 would preclude UM or [underinsured motorist] coverage for non-owned vehicles in any state in which UM coverage is not mandatory." Covered Auto Type No. 6 is defined on the Business Auto Coverage Form as:
Only those "autos" you own that because of the law of the state where they are licensed or principally garaged are required to have and cannot reject Uninsured Motorists Coverage. This includes those "autos" you acquired ownership of after the policy begins provided they are subject to the same state uninsured motorists requirements.
Accordingly, it is clear that plaintiff was not entitled to UM coverage because: (1) the vehicle involved in the accident was not owned by Praxair----it was rented through either Hertz or Avis; and (2) the vehicle was not registered or garaged in any state or location that required UM coverage. Consequently, we will not interfere with the trial court's ruling. See Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001) ("'In the absence of any ambiguity, courts should not write for the insured a better policy of insurance than the one purchased.'") (quoting Gibson v. Callaghan, 158 N.J. 662, 670 (1999)).
In addition, we find no merit in plaintiff's contention that the trial court lacked subject matter jurisdiction to dismiss the complaint. This argument was raised for the first time in plaintiff's reply brief and the issue does not involve a matter of great public concern. See R. 2:6-2; Borough of Berlin v. Remington & Vernick Eng'rs, 337 N.J. Super. 590, 596 (App. Div.), certif. denied, 168 N.J. 294 (2001) ("Raising an issue for the first time in a reply brief is improper"); see also Goldsmith v. Camden County Surrogate's Office, 408 N.J. Super. 376, 387 (App. Div. 2009), certif. denied, 200 N.J. 502 (2009) (declining to consider an issue for the first time on appeal when it did not present a matter "of great public interest") (quoting Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973)).
However, if we were to consider plaintiff's argument, we do not agree that the Connecticut endorsement of the policy requires defendants to arbitrate plaintiff's claim in Connecticut, Praxair's principal place of business. The Connecticut endorsement plaintiff relies on defines an "insured" as "[a]nyone else 'occupying' a covered 'auto' or a temporary substitute for a covered auto," which "must be out of service because of its breakdown, repair, servicing, loss or destruction." For the reasons previously noted, plaintiff was not "occupying" a covered "auto" and is therefore not entitled to arbitration under the Connecticut endorsement.