The opinion of the court was delivered by: Chesler, District Judge
Presently before the Court is the motion by Defendant United Services Automobile Association Casualty Insurance Company ("Defendant" or "USAA") for summary judgment. Plaintiff Brett Pegg ("Plaintiff" or "Pegg") has opposed the motion, and in turn has filed a cross-motion for partial summary judgment. This Court has reviewed the papers filed by the parties in connection with the instant motions and, pursuant to Federal Rule of Civil Procedure 78, rules based on the papers submitted. As this Court concludes that New Jersey law applies, and that the issues raised by the motions must be resolved in Defendant's favor, USAA's motion for summary judgment will be granted, while Pegg's motion for partial summary judgment will be denied.
I. BACKGROUND AND PROCEDURAL HISTORY
This is a declaratory judgment action in which Plaintiff seeks a declaration that he is eligible to receive underinsured motorist ("UIM") benefits pursuant to an automobile liability insurance policy issued by Defendant. At the heart of the cross-motions before the Court lies a choice-of-law question: whether the insurance contract should be governed by Pennsylvania or New Jersey law. The facts necessary to dispose of this motion are not in dispute.
In November of 2003, Kathy Ann Ballas, a resident of Murray Hill, New Jersey and mother of Plaintiff Pegg, submitted a signed New Jersey Application for a Personal Automobile Policy to Defendant USAA on a model year 2000 Jeep Cherokee. On her application, Ballas stated her desire for bodily injury liability coverage in the amounts of $100,000 per person, $300,000 per accident. Ballas desired similar limits of Uninsured/Underinsured Motorist*fn1 ("UM/UIM") Bodily Injury coverage: $100,000 per person, $300,000 per accident.
USAA issued Ballas an automobile insurance policy ("the Ballas Policy") in December of 2003. The Ballas Policy indicated the insured vehicle, the 2000 Jeep Cherokee, was principally garaged at an address in Murray Hill, New Jersey. It was amended effective December 12, 2003, when a second vehicle, a model year 1990 Volvo 240 sedan, garaged in the same New Jersey location as the Jeep Cherokee, was added. The Ballas Policy was renewed in December 2004, effective through December 2005. The 1990 Volvo was subsequently deleted from coverage, per an endorsement effective February 8, 2005.
Of relevance to the motions before the Court, the Ballas Policy defined the term "underinsured motor vehicle" as follows:
2. With respect to a covered person who:
a. Is not the named insured under this policy or any other policy; and
b. Is insured as a spouse or family member under one or more other policies providing similar coverage.
an underinsured motor vehicle is a vehicle . . . to which liability bonds and policies for [bodily injury] and [property damage] are available, but the sum of the limits of the bonds and policies is less than the sum of the limits for Underinsured Motorists Coverage afforded under this policy . . .
3. With respect to a covered person not described in paragraph 1 or 2 above [named insured or insured family member], an underinsured motor vehicle means a vehicle . . . to which liability bonds and policies for [bodily injury] and [property damage] are available but the sum of the limits of the bonds and policies is less than the sum of the limits of liability for this coverage. (Def.'s Ex. D, New Jersey Standard Auto Policy at 24.)*fn2
On October 31, 2005, Plaintiff Brett Pegg, a student in his freshman year at Drexel University in Philadelphia, Pennsylvania, was a pedestrian walking across Market Street in Philadelphia when he was struck by an automobile driven by Michael Fetko. Pegg was admitted to the Hospital of the University of Pennsylvania, operated on, and discharged on November 3, 2005. After three days spent packing personal items from his dormitory room on the Drexel campus, Pegg returned to his mother's home in New Jersey. Pegg remained at his mother's New Jersey home at least through the beginning of 2006.
Pegg asserted a claim for personal injuries against Fetko. Fetko's automobile was insured by Allstate Insurance Company for liability amounts of $100,000 per person, $300,000 per accident. By letter of August 27, 2008, Pegg's attorney advised USAA that Allstate had offered $95,000 offer to settle Pegg's claim against Fetko and sought USAA's permission to consummate the settlement. The letter further advised that Pegg intented to pursue a UIM benefit claim against USAA. Defendant USAA waived its rights of subrogation against Fetko and granted Pegg permission to settle his claim. By letter of September 23, 2008, USAA stated its position that UIM coverage under the Ballas Policy had not been triggered by the October 2005 accident because the coverage limits under the alleged tortfeasor's automobile insurance policy with Allstate were the same as the limits under the Ballas Policy. The letter explained: "Because the bodily injury limits under the Allstate policy and the UIM limits under the insured's policy are both $100,000, the limits are offset and there is no UIM exposure." (Pl.'s Ex. D.)
In March of 2009, Pegg initiated a legal action in the Superior Court of New Jersey, Essex County. In addition to seeking a declaration that Pegg is eligible to receive UIM benefits under the Ballas Policy in connection with the October 2005 accident, the Complaint also alleges that USAA breached its duty of good faith and fair dealing in denying Pegg UIM benefits. USAA removed the action to federal court on May 1, 2009. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a)(1).