IFA INSURANCE COMPANY VS HOWARD & MYRNA LEVIN, ET AL

(NOTE: This decision was approved by the court for publication.)
This case can also be found at 306 N.J. Super. 160.

NOT FOR PUBLICATION WITHOUT THE
 
APPROVAL OF THE APPELLATE DIVISION
 

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-800-96T3

IFA INSURANCE COMPANY,

Plaintiff-Appellant/
Cross-Respondent,

v.

HOWARD LEVIN and MYRNA LEVIN,

Defendants-Respondents/
Cross-Appellants,

and

AMGRO INSURANCE COMPANY, as
servicing carrier for the
MARKET TRANSITION FACILITY,

Defendant.
_________________________________

Argued: December 2, 1997 - Decided: December 12, 1997

Before Judges Dreier, Keefe and P.G. Levy.

On appeal from the Superior Court of New Jersey, Law Division, Camden County.

Richard D. Catenacci argued the cause for appellant/cross-respondent (Connell, Foley & Geiser, attorneys; Mr. Catenacci, of counsel; Brendan Judge, on the brief).

Robert T. Szostak argued the cause for respondents/cross-appellants (M. Mark Mendel, attorney; Mr. Szostak, on the brief).

The opinion of the court was delivered by
P.G. LEVY, J.A.D.
In this declaratory judgment action, plaintiff, IFA Insurance Company, appeals from a judgment which directed it to

provide a certain level of uninsured motorists' (UM) coverage on behalf of defendants' son, Daniel Levin, who died in a car accident in Philadelphia, Pennsylvania as the result of the negligence of an uninsured and intoxicated driver. At the time of the accident, the decedent was twenty-seven years old and had just moved out of his parents' home in Cherry Hill, New Jersey to live in a rented house in Philadelphia. He owned his own car, which was registered in New Jersey and which was insured in New Jersey by defendant Amgro as the servicing carrier for the Market Transition Facility (MTF).
When the accident occurred, the decedent was driving his father's car, which was also registered in New Jersey and which was insured by plaintiff. The UM limit of plaintiff's policy was $100,000, whereas the UM limit of Amgro's policy was $15,000.
After a bench trial, the trial judge ruled that defendants were entitled to the maximum UM limit of plaintiff's policy. The trial court based this ruling on the language of N.J.S.A. 17:28-1.1(c) and expressly declined plaintiff's invitation to extend the holding of Aubrey v. Harleysville Ins. Cos., 140 N.J. 397 (1995), which dealt only with underinsured motorists' (UIM) coverage. Plaintiff appeals from this ruling.
The judge also ruled that although the decedent was a New Jersey domiciliary at the time of his death, Pennsylvania law would control the calculation of damages that his parents could recover on behalf of his estate. Plaintiff appeals from that portion of the ruling which held that Pennsylvania law controls; defendants cross-appeal from that portion which held that the decedent was a

New Jersey resident.
N.J.S.A. 17:28-1.1 mandates that insurance companies provide UM coverage to their insureds. Subsection (c), the provision which is at issue here, was added to the statute by L. 1983, c. 362, 1. It provides as follows:
Uninsured and underinsured motorist coverage provided for in this section shall not be increased by stacking the limits of coverage of multiple motor vehicles covered under the same policy of insurance nor shall these coverages be increased by stacking the limits of coverage of multiple policies available to the insured. If the insured had uninsured motorist coverage available under more than one policy, any recovery shall not exceed the higher of the applicable limits of the respective coverages and the recovery shall be prorated between the applicable coverages as the limits of each coverage bear to the total of the limits.

[N.J.S.A. 17:28-1.1(c) (emphasis supplied).]
It was not disputed here that the decedent "had uninsured motorist coverage available under more than one policy." That is, in addition to the coverage provided under his own policy issued by the MTF, Daniel was also covered under the UM endorsement issued by plaintiff to his parents. The trial judge ruled that Daniel was covered under the IFA policy's UM endorsement as a family member residing in his parents' household. However, the more accurate assessment is that he was covered thereunder as a person occupying one of the vehicles insured by the IFA policy. The UM endorsement in the IFA policy defined a "covered person" to mean:
1. You or any family member.

2. Any other person occupying your covered auto.

3. Any person for damages that person is entitled to recover because of bodily injury to which this coverages applies sustained by a person described in 1. or 2. above.

[Emphasis supplied.]
According to the policy's general definitions, a "family member" means a person related to the insured by blood, marriage or adoption who is a resident of the insured's household. Rather than engage in an extended discussion of whether Daniel, age twenty-seven, was indeed a resident of his parents' household at the time of the accident, we find (and it was stipulated at oral argument) that he was covered by virtue of being an occupant of the vehicle.
Plaintiff maintains that UM coverage is personal to the insured and the amount of coverage is determined by the terms of the insured's personal auto policy instead of the policy covering a non-owned vehicle occupied by the insured at the time of an accident. The authority for this proposition is Aubrey v. Harleysville Ins. Cos., supra. We consider Aubrey inapposite here because of the innate difference between UM coverage and UIM coverage. Moreover, Aubrey has been limited by our Supreme Court in French v. New Jersey School Board Ass'n. Ins. Group, 149 N.J. 478, 492 (1997)("no public policy or statute prevents an insurance company from providing greater coverage to an insured person than is provided under the personal insurance of that insured."); see also Barnett v. Prudential Property and Cas. Ins. Co., 304 N.J. Super. 573 (App. Div. 1997); General Acc. Ins. Co. v. CNA Ins. Co., 303 N.J. Super. 161, 163 (App. Div. 1997). Furthermore, Aubrey has repeatedly been held to be prospective in operation.

See N.J. Mfgrs. Ins. Co. v. Breen, 297 N.J. Super. 503, 513-515 (App. Div.), certif. granted, 149 N.J. 408 (1997), and its progeny.
Since Daniel is a "covered person" under plaintiff's policy, we look next to the policy provisions concerning arbitration of the amount of damages, first raised in defendant's motion to dismiss the declaratory judgment action for lack of subject matter jurisdiction. The policy provides, in pertinent part:
If we and a covered person do not agree:
1. Whether that person is legally entitled to recover damages under this endorsement; or
2. As to the amount of damages;
either party may make a written demand for arbitration.

Referring to similar language, we held in Bocelli v. Hanover Metro Ins. Co., 219 N.J. Super. 6 (App. Div. 1987), that the contract language in the UM clause "render[ed] arbitrable all issues related to the liability of the carrier, including issues of coverage, and not just issues related to the liability of the uninsured motorist and the amount of damages." Id. at 10 (emphasis supplied). The court's role is limited to determining whether the claimant is a "covered person," and all other disputed issues are to be sent to arbitration. (Of course, the court may opt to send everything to arbitration.) We opined that this course of action was supported, if not mandated, by the Supreme Court's holding in Ohio Cas. Ins. Co. v. Benson, 87 N.J. 191, 199 (1981), that arbitration clauses had to be construed broadly to create "a speedy and inexpensive method for settling disputes" in insurance cases. Bocelli, 219 N.J. Super. at 11.
Here, it is admitted that Daniel was a "covered person" as defined by the policy. If that had been disputed, the motion judge could have properly decided that issue or sent it to arbitration. However, deviating from the rule in Bocelli, the judge decided issues related to the amount of coverage, delving into questions of choice of law and fact sensitive issues like Daniel's place of residence. Those matters must be left for arbitration when demanded, as here, by either insurer or insured.See footnote 1
Thus, we reverse the order determining that the law of Pennsylvania on damages in wrongful death and survival actions shall be applied to the UM arbitration, that the defendant's claim has a $100,000 limit and shall be prorated between the two policies, and that Daniel was a New Jersey domiciliary at the time of the accident, because these determinations must be decided by the arbitrators, not the court. While the court's rulings may be instructive, they are not binding on the arbitrators, and by reversing, we intend no expression of our views on the subject. We also reverse the order denying defendants' motion for partial summary judgment because defendants were correct: as a covered person, Daniel's and all derivative claims for damages are to be decided by arbitration.

Reversed and remanded for arbitration. We do not retain jurisdiction.

Footnote: 1Defendants originally moved to dismiss the declaratory judgment action for lack of subject matter jurisdiction, arguing that determination of the applicable policy and the attendant amount of coverage was a question of damages, rather than whether the claimant was covered, that should be decided by arbitration. That motion was not granted. - -