On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-1784-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 28, 2011
Before Judges Lihotz, Waugh and St. John.
Plaintiff Timothy F. Long appeals from the summary judgment dismissal of his declaratory judgment action seeking underinsured motorist (UIM) coverage under his personal automobile insurance policy, issued by defendant Mercury Insurance Group. We reverse, concluding the policy's UIM exclusion when read with its other provisions, was sufficiently ambiguous such that the insured would not have clearly understood the limits of the coverage purchased.
The underlying facts are not disputed. On January 15, 2009, plaintiff, acting in the course of his employment, was operating a vehicle owned and insured by his employer, Admiral Nissan (Admiral), when Maureen Porter failed to stop at a stop sign and crossed into his lane of travel. As a result of the ensuing automobile accident, plaintiff suffered a shoulder injury necessitating surgery.
After notifying defendant and Admiral's insurance carrier, plaintiff accepted $15,000 to settle his underlying negligence action. The sum received represented the liability limits of Porter's automobile insurance policy. Plaintiff also recovered $20,000 from Admiral's commercial vehicle insurance carrier. This amount was the difference between the UIM policy limit covering Admiral's commercial vehicle ($35,000) and the sum tendered by Porter ($15,000). Although plaintiff was not a named insured under Admiral's commercial insurance policy, he was nevertheless an insured under the policy and entitled to coverage under its UIM provisions.
Plaintiff next submitted to defendant a $65,000 claim as a named insured under the terms of his personal automobile liability policy. The sum sought represented the difference between his $100,000 UIM policy limits less the $35,000 he had received from Porter and Admiral. Defendant denied the claim and declined to submit the matter to arbitration, relying on an exclusion found among the UIM provisions.
The thirty-eight page personal automobile policy issued to plaintiff by defendant includes various descriptive headings designating separate sections addressing individual coverage issues. Part III begins on page twenty-four and addresses UIM and uninsured motorists (UM) coverage. Part III's "Limits of Liability" provision states: "[t]he amount of coverage is shown on the declarations page[.]" The declaration page details the UIM bodily injury coverage as "$100,000 Each Person, $300,000 Each Accident."
The Part III UIM bolded titles include: "Who is an Insured"; "Deciding Fault and Amount"; and "Limits of Liability." Exclusion 5 is located on page twenty-eight, under the section captioned, "When Coverage Does Not Apply[,]" which lists eighteen provisions when "[t]here is no coverage for property damage or bodily injury[.]" Exclusion 5 states:
When Coverage Does Not Apply
There is no coverage for property damage or bodily injury:
5. For you while occupying a vehicle insured under another policy on which you are an insured.
Plaintiff initiated this declaratory judgment action asserting defendant wrongfully denied coverage of a valid claim. Defendant moved for summary judgment. The motion judge determined the policy exclusion at issue was "narrowly construed, specific, and in no way ambiguous or contrary to public policy." He further found plaintiff's situation fit "squarely within the exclusion" and concluded the contractual provisions precluded plaintiff's ...