On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-2534-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lihotz and J. N. Harris.
This is another appeal -- in an ever-increasing procession of automobile liability insurance coverage disputes -- that relates to a step-down provision affecting underinsured motorist (UIM) protection. Co-defendant Selective Insurance Company of America (Selective) appeals from the following two orders entered by the Law Division: (1) the March 23, 2008*fn1 order granting summary judgment to co-defendant Palisades Insurance Company (Palisades) declaring that Palisades's step-down of UIM benefits was valid, thereby making Selective solely responsible for plaintiff's first-party UIM benefits and (2) the June 12, 2009 order denying Selective's motion for reconsideration. We affirm.
The operative facts relating to this appeal are not in dispute. We derive them from the motion record created by Selective's and Palisades's cross-motions for summary judgment.*fn2
The dispute between the parties has its source in a collision on February 5, 2005, between automobiles driven by then sixteen-year-old plaintiff Max C. Stember-Young, and non-party Brandon L. Abelson. Stember-Young claimed that Abelson negligently operated his vehicle, which proximately resulted in Stember-Young's serious personal injuries.
Stember-Young -- with permission -- was driving the car of his grandfather, Cyrus Stember, at the time of the accident. Pursuant to a Property Settlement Agreement that was incorporated into his parents' divorce, Stember-Young resided primarily with his mother, Susan Stember-Young. Stember-Young maintained a good relationship with his father, Andrea Young,*fn3 and often spent time at his father's apartment.
These four automobile insurance policies were implicated by the events of February 5, 2005:
3/4 Abelson's Proformance Insurance Company
(Proformance) automobile policy with a liability limit of $100.000. 3/4 Cyrus Stember's Palisades automobile policy with UIM coverage in the amount of $500,000. 3/4 Andrea B. Young's Selective automobile policy with UIM coverage in the amount of $500,000. 3/4 Susan Stember-Young's GEICO automobile policy with UIM coverage in the amount of $100,000.
As a result of the accident and resultant injuries suffered by Stember-Young, Abelson and his insurer agreed to pay Stember-Young the limit of the Proformance policy, $100,000.
Nonetheless, Stember-Young believed that his injuries warranted compensatory damages greater than $100,000. Asserting that he was entitled to first-party UIM coverage under his grandfather's and father's automobile insurance policies, Stember-Young commenced the instant action against Palisades and Selective, but not against GEICO,*fn4 seeking arbitration of his UIM claim (count one) and the payment of UIM benefits from both insurers (count two).
Following the court's transmittal of the dispute to arbitration, with a resultant award finding that Stember-Young was entitled to gross damages of $375,000, three motions were filed: (1) Stember-Young moved to set a trial date, presumably on count two of the complaint to determine which insurer was responsible to pay for his net damages; (2) Selective moved for summary judgment to apportion its respective responsibility to pay the net damages from its UIM coverage; and (3) Palisades moved for summary judgment to discharge its liability for UIM benefits.
Reviewing the Palisades policy language, the Law Division determined the step-down provision "limits the [UIM] exposure . . . to the statutory minimums." Also, the court held that the coverage provided to Stember-Young under Selective's policy was dissimilar to the coverage provided by the Palisades policy because the coverage "is not subject to the same classifications or benefits." These rulings had the effect of making only Selective responsible for Stember-Young's net damages. Selective's timely motion for reconsideration was denied. Thereafter, Selective and Stember-Young ...