NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 16, 2013
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-2564-11.
David J. Dickinson argued the cause for appellant (McDermott & McGee, L.L.P., attorneys; Gabrielle J. Pribula, on the brief).
Charles W. Atkinson, III argued the cause for respondents (Biancamano & DiStefano, P.C., attorneys; Lawrence F. Citro, of counsel; Mr. Atkinson, on the brief).
Before Judges Reisner, Harris, and Hayden.
MARGARET M. HAYDEN, J.A.D.
This case arises from an insurance coverage dispute between plaintiff, Allstate New Jersey Insurance Co. (Allstate), and defendants Old Republic Insurance Co. (Old Republic), Penske Truck Leasing Co., L.P. (Penske), and Meir Dorfman (Dorfman) (collectively defendants). Allstate appeals the June 15, 2012 Law Division order denying its motion to compel arbitration and granting defendants' motion for summary judgment and dismissal of the complaint. For the reasons that follow, we affirm.
The record reveals the following facts, which are basically undisputed. On March 23, 2009, Dorfman, a New York resident, rented a twenty-six-foot-long truck for one day from Penske, a registered interstate motor carrier. Penske maintained motor vehicle liability insurance with a policy limit of one million dollars through Old Republic, a Maryland-based company. The Old Republic insurance policy contained a step-down provision for leased vehicles, which provided liability coverage as to "[b]oth lessees and rentees of covered autos as insureds, but only to the extent and for the limits of liability agreed to under contractual agreement with [Penske]."
Dorfman leased the Penske truck in Upper Saddle River and returned it to the same location within twenty-four hours. Dorfman obtained only the limited liability coverage provided by Penske in the rental agreement, which was then $15, 000 per injury and $30, 000 per occurrence ($15, 000/$30, 000) in coverage. He declined to purchase supplemental liability coverage and did not have any personal automotive insurance.
Unfortunately, during that day, Dorfman was involved in an accident in Lakewood, New Jersey with a car driven by Carmen L. Quinones. Quinones had two passengers at the time of the accident, and all three were injured in the accident. Quinones had motor vehicle insurance through Allstate, which paid Personal Injury Protection (PIP) Benefits to all three occupants of the insured vehicle. Defendants settled the claims of the three injured people for a total of $30, 000.
Allstate unsuccessfully sought reimbursement of its PIP payout from Old Republic. On March 21, 2011, Allstate filed a complaint against defendants for PIP reimbursement and demanded arbitration pursuant to N.J.S.A. 39:6A-9.1. After discovery, Allstate filed a motion to compel arbitration, and defendants cross-moved for summary judgment.
Defendants argued they did not have to arbitrate because Old Republic's $15, 000/$30, 000 policy limits had already been exhausted in the settlement payments. Allstate countered that the $15, 000/$30, 000 provision in the rental agreement and the Old Republic policy were inapplicable because Penske was an interstate motor carrier subject only to federal regulation requiring a minimum of $750, 000 in coverage. Allstate argued that it did not matter that Dorfman was not engaged in interstate commerce at the time of the accident. Defendants, on the other hand, argued that the federal law did not apply as Dorfman's trip was a personal local one, not a for-hire interstate trip covered by the Motor Carrier Act of 1980 (MCA). Pub. L. No. 96-296, ...