On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-1571-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 17, 2011 -
Before Judges A. A. Rodriguez and Fasciale.
Defendant Palisades Safety & Insurance (Palisades) appeals from a December 3, 2010 order denying its summary judgment motion, and a December 9, 2010 order requiring that it provide primary underinsured motorist coverage (UIM) to plaintiff. Palisades argues principally that the motion judge erred by (1) reforming an automobile policy issued by co-defendant Selective Auto Insurance Company of New Jersey (Selective), and (2) misconstruing the "Other Insurance" provision contained within the policy issued by Palisades. We disagree and affirm.
On February 17, 2009, plaintiff operated an automobile owned by his wife and sustained injuries in an accident with a truck operated by Antonio Arbaiza (Arbaiza) and owned by Vemar Foods Company (Vemar). Progressive Insurance (Progressive) issued a commercial liability policy to Vemar with coverage in the amount of $100,000 combined single limit (CSL). Plaintiff settled his personal injury claims against Arbaiza and Vemar subject to Longworth*fn1 approval.
Plaintiff then pursued UIM benefits from two insurance companies: (1) Palisades, which issued an automobile insurance policy to plaintiff containing UIM benefits in the amount of $500,000;*fn2 and (2) Selective, which issued an automobile insurance policy to plaintiff's son (the son), with whom plaintiff lived at the time of the accident. Although Selective and the son intended that the Selective policy include UIM benefits in the amount of $300,000, the declaration page omitted any mention of that coverage.
On April 24, 2008, the son applied for automobile insurance with Selective (the application). It is undisputed that the son applied for uninsured motorist (UM) coverage and UIM coverage with a combined single limit of $300,000 per accident, and paid premiums for UIM and UM coverage. Selective discovered that it did not include UIM coverage on the declarations page for the son and other insureds, and issued a letter dated April 30, 2010 to all affected policyholders. The letter stated:
If you had a new personal automobile policy issued by Selective and your coverage first began between October 1, 2007 through August 10, 2008, a computer programming error may have affected your Selective UM/UIM coverage. Due to the programming error your policy did not include a specific form that should have been enclosed with a new policy. And, that form was not listed on your declarations page that accompanied your policy. This form is New Jersey Uninsured and Underinsured Motorists Coverage, form [PP 0480 (09/05)].
The letter enclosed the form and also advised policyholders that "Selective is going to apply the terms of form [PP 0480 (09/05)] that may apply to you if you had a UM/UIM claim that arose under an affected policy beginning on October 1, 2007 through August 10, 2008."
Plaintiff filed a complaint to compel Palisades and Selective to participate in a UIM arbitration.*fn3 Selective then filed a third-party complaint against the son and sought to reform the Selective policy to include the omitted UIM benefits. The parties then filed three motions: (1) Selective filed a motion for summary judgment seeking to reform its policy with the son, based on mutual mistake;*fn4 (2) Palisades cross-moved for summary judgment seeking a declaration that Selective be responsible for a prorata share of any UIM benefits due plaintiff; and (3) plaintiff moved to compel Palisades and Selective to participate in UIM arbitration.
The motion judge conducted oral argument on the cross-motions for summary judgment. On December 3, 2010, the judge granted Selective's motion, reformed the Selective policy to afford UIM coverage to the son in the amount of $300,000, and denied the cross-motion filed by Palisades. He construed the "Other Insurance" provision in the policy issued by Palisades and ordered that Palisades' policy provided primary coverage and the Selective UIM policy provided excess coverage. On December 9, 2010, the judge granted plaintiff's motion and compelled Palisades, as the primary carrier, to participate in the UIM arbitration.
On appeal, Palisades argues that the judge erred by (1) permitting Selective to reform its policy to include terms and conditions to its UIM coverage that did not exist when the accident occurred; and (2) concluding that the Palisades policy provided primary coverage rather than prorata coverage.
When reviewing a grant of summary judgment, we employ the same legal standards used by the motion judge. Spring Creek Holding Co. v. Shinnihon U.S.A. Co., 399 N.J. Super. 158, 180 (App. Div.), certif. denied, 196 N.J. 85 (2008). First, we determine whether the moving party has demonstrated that there were no genuine disputes as to material facts, and then we decide whether the motion judge's application of the law was correct. Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J. Super. 224, 230-31 (App. Div.), certif. denied, 189 N.J. 104 (2006). In so doing, we view the evidence in the light most favorable to the non-moving party and analyze whether the moving party was entitled to judgment as a matter of law. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523, 529 (1995). We accord no ...