November 30, 2012
MIREILLE CHERY, PLAINTIFF-APPELLANT,
NEW JERSEY INDEMNITY INSURANCE COMPANY, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-821-11.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: November 15, 2012 -
Before Judges Axelrad and Haas.
The facts are undisputed. Plaintiff Mireille Chery was injured in a hit-and-run motor vehicle accident. She sought compensation through an uninsured (UM) claim against defendant New Jersey Indemnity Insurance Company. The policy provided UM coverage for personal injury of $15,000 per person and $30,000 per accident. The policy regarding arbitration provides:
A decision agreed to by two of the arbitrators shall be binding unless the arbitration award exceeds the minimum limit for liability specified by the Financial Responsibility Law of New Jersey. If the arbitration award exceeds that limit, either party may demand the right to a trial by jury on all issues. This demand must be made within 60 days of the arbitrators' decision. If this demand is not made, the amount of damages agreed to [by] the arbitrators will be binding.
A UM arbitration was conducted before three arbitrators, who awarded plaintiff $17,500. Defendant timely rejected the award and demanded a jury trial. Plaintiff filed a complaint to confirm the arbitration award and a motion for summary judgment. Plaintiff argued that because the mandatory minimum liability limit specified by the Financial Responsibility Law of New Jersey, N.J.S.A. l7:28-1.1a(1), and the actual liability of defendant's policy are the same, $15,000, the contract provision does not permit defendant to appeal the award or demand a trial de novo. In other words, defendant's liability is capped at $15,000, the minimum limit for liability under law and the coverage under the contract and, as a result, the award should be molded to $15,000.
Following oral argument, by order of December 23, 2011, Judge Paul Innes denied plaintiff's motion for summary judgment and dismissed plaintiff's complaint. In an accompanying oral decision on the record, the judge explained he was rejecting plaintiff's argument because it "ignores the clear language of the insurance policy." Judge Innes articulated his reasoning as follows:
That policy states that either party has the right to demand a trial on all issues if the award from the arbitrator exceeds the $15,000 limit specified by the Financial Responsibility Law.
The words of an insurance policy are to be given their ordinary meaning and a court should not engage in a strained construction. Longobardi v. Chubb Ins. Co., 121 N.J. 530 (l990). In this case, the policy language permits either party to demand a trial on all issues if the arbitration award exceeds $15,000. It's undisputed here that the arbitrator's award was $17,500.
Under the circumstances, the court finds that the language of the policy [is] clear and unambiguous and that therefore the defendant had the right to demand a jury trial after the arbitrator's decision.
The cases cited by the plaintiff in support of plaintiff's application do not support the plaintiff's argument here. Those facts and those cases are significantly different than the facts in this case. D'Antonio v. State Farm, 262 N.J. Super. 247 (App. Div. l993) involved a UIM [underinsured motorist] arbitration. The plaintiff had settled with the tortfeasor for a liability limit of $25,000. At the UIM arbitration, the arbitrators awarded the plaintiff the gross sum of $40,000. The parties had agreed that the $25,000 recovered from the tortfeasor would be credited against the $40,000 gross sum and State Farm would only be liable for the $15,000 in UIM benefits. The plaintiff attempted to reject the award on the basis the gross award of $40,000 exceeded $15,000. The court correctly pointed out that the UIM arbitration was conducted to determine the carrier's liability for UIM payments. It held that the insurance contract permitted a trial to be demanded only if the arbitration had awarded UIM benefits exceeding the mandatory minimum liability limit. The carrier's liability did not exceed that amount. . . . .*fn1
Based upon these clear decisions . . . and the clear language of the policy, the court finds that plaintiff is not entitled to summary judgment.
Plaintiff appealed. On appeal, plaintiff renews the arguments made to Judge Innes. She additionally argues that when the arbitration clause is read with the limit of liability section of the policy, because UM cases are "first-party contract claims" against the insurer, defendant is bound by the arbitration award as molded by the policy limits. See Taddei v. State Farm Indem. Co., 401 N.J. Super. 449, 464 (App. Div. 2008).
We are not persuaded by plaintiff's arguments and affirm substantially for the reasons expressed by Judge Innes. Plaintiff purchased UM coverage with a potential per person limit of $15,000, and expressly contracted to be bound by an arbitration award unless it exceeds $15,000. The policy contains no provision, express or implied, that this plain language was inapplicable where the UM limit of the policy and the minimum limit for liability specified by the Financial Responsibility Law were the same. Plaintiff cannot write a better insurance policy for herself than she purchased. See Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960).
A trial on all issues could result in an award of less than $15,000, even an award of zero, given her selection of the limitation of liability threshold. Based on the unambiguous language of the policy, as the arbitration award exceeded $15,000, defendant was legally entitled to reject it just as it would have been precluded to do so under the express terms of the policy had the arbitration award been $15,000 or less. Implicitly, in D'Antonio, had the arbitrators made a gross award of $42,500, the amount of UIM benefits would have been $17,500 ($42,500 - $25,000), thus either party could have rejected the award.