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Hetal Shah and Dhaval H. Shah v. Geico Insurance Company

August 9, 2011

HETAL SHAH AND DHAVAL H. SHAH, PLAINTIFFS-APPELLANTS,
v.
GEICO INSURANCE COMPANY, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-50-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Telephonically argued - January 13, 2011

Before Judges Fuentes, Gilroy and Nugent.

This is a declaratory judgment action. Plaintiffs Hetal Shah and Dhaval Shah, her husband, appeal from the December 18, 2009 order that granted defendant Government Employees Insurance Company's, incorrectly designated in the complaint as Geico Insurance Company, motion for summary judgment. We affirm.

I.

On December 27, 2007, plaintiffs filed a complaint against defendant seeking an "order declaring that Geico insurance company is contractually obligated to provide [underinsured motorists (UIM)] coverage for Plaintiffs['] claim arising out of the accident of July 1, 2007 that resulted in significant personal injury to Hetal Shah." In December 2008, defendant filed a motion for summary judgment. On January 23, 2009, the court entered an order supported by a statement of reasons denying the motion. Specifically, the court determined that "the limitation [on coverage] did not appear on the declaration page and that defendant may have had an obligation to plaintiff to provide information [it] had regarding other household members goes to the issue of [plaintiffs'] reasonable expectations and should be left to the [factfinder]." On March 6, 2009, the court entered an order denying defendant's motion for reconsideration.

In September 2009, plaintiffs filed a motion seeking to confirm UIM coverage. On October 23, 2009, the court entered an order supported by an oral decision denying the motion. In ruling, the court candidly acknowledged that it had erroneously denied defendant's motion for reconsideration of the January 23, 2009 order denying summary judgment, finding that the terms of the insurance policy had created an ambiguity. The court concluded that upon re-reading the insurance policy, its terms and provisions were clear and unambiguous; and thus, "entirely enforceable." However, because defendant had not filed a cross-motion for affirmative relief, the court determined that it would not "be fair or appropriate to go to the next step and . . . vacate the order denying [defendant's] motion for summary judgment." Having stated that, the court invited the parties to file motions seeking any relief deemed appropriate.

In November 2009, defendant filed a motion seeking to vacate the orders of January 23, and March 6, 2009, and for summary judgment dismissing plaintiffs' complaint. On December 18, 2009, the court entered an order supported by an oral decision granting the motion.

II.

Viewed most favorably to plaintiffs, see R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), the motion record discloses the following. On July 1, 2007, Hetal Shah was injured while a passenger in a 2004 Honda Pilot motor vehicle owned by her brother-in-law Viral Shah and operated by her father-in-law Harish Shah. The vehicle was insured by defendant for third-party liability coverage in the amounts of $100,000 per person and $300,000 per accident. Harish Shah owned a 2002 Toyota Corolla automobile that was insured by defendant under a separate policy for third-party liability coverage in the same amounts as Viral Shah's policy. Plaintiffs owned a 2007 Toyota Rav-4 automobile that was insured by defendant under a third policy of insurance. That policy designated plaintiffs as the named insureds and provided third-party liability coverage, and first-party uninsured motorist (UM) and UIM coverages in the amounts of $300,000 per person and $300,000 per accident. At the time the three policies were issued, and at the time of the accident, all of the aforesaid individuals, along with Viral Shah's and Harish Shah's wives, resided in the same residence in Parsippany.

The accident occurred when Harish Shah's motor vehicle struck a second motor vehicle. Following the accident, Hetal Shah settled her personal injury claim with Harish Shah for $100,000. After so doing, plaintiffs demanded $200,000 in UIM benefits from defendant. Defendant denied the claim on the basis that Hetal Shah was injured while a passenger in a motor vehicle owned by Viral Shah, a relative of the same household as plaintiffs.

Dhaval Shah had purchased plaintiffs' automobile insurance policy from defendant via the Internet. This was the first time he had purchased an automobile insurance policy. The policy's UM/UIM coverage section provides, in relevant part, that "we 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." The policy also contains exclusions from coverage. Exclusion No. 2 states UM/UIM coverage does not apply "to bodily injury sustained by you or your relatives while occupying, or through being struck by, an uninsured motor vehicle or underinsured motor vehicle owned by you or your relatives." Exclusion No. 5 bars claims for bodily injuries "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."

Under the definitions contained in the UM/UIM section of the policy, "insured" is defined as: "a. you and your spouse if a resident of the same household, b. your relative if a resident of your household." "Underinsured motor vehicle" is defined in the policy to exclude "any vehicle or equipment: 1. [o]wned by or furnished or available for the regular use of you or any relative." "Relative" is defined as "a person related to you who resides in your household."

On December 18, 2009, the trial court granted defendant's motion to vacate the January 23 and March 6, 2009 orders and to grant summary judgment dismissing the complaint. The court found that UIM Exclusions Nos. 2 and 5 applied based on the policy's definitions of "underinsured motor vehicle," "insured," and "relative," because Hetal Shah resided in the same household as Viral Shah, her brother-in-law and owner of the vehicle involved in the accident.

The court rejected plaintiffs' argument that ambiguities and discrepancies existed between the insurance policy and the declarations page, such that the reasonable expectations doctrine applied. The court concluded after reviewing the declarations page and the policy that the policy's terms and provisions were "clear and unambiguous." The court also determined that defendant did not have a duty to affirmatively explain the ...


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