EDYTHE E. TORTORELLO et al. v. HARLEYSVILLE INSURANCE COMPANY

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5822-03T55822-03T5

EDYTHE E. TORTORELLO and

MARK TORTORELLO, her husband,

Plaintiff-Appellants,

v.

HARLEYSVILLE INSURANCE COMPANY,

Defendant-Respondents.

________________________________________________________

 

Submitted October 25, 2005 - Decided April 11, 2006

Before Judges Lefelt, Hoens and R. B. Coleman.

On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, L-2039-03.

Lars S. Hyberg argued the cause for appellants (McAllister, Hyberg, White & Cohen, attorneys; Mr. Hyberg, on the brief).

Patricia L. Dee argued the cause for respondent (Capehart & Scatchard, attorneys; Ms. Dee, of counsel and on the brief; Robert A. Hicken, on the brief).

PER CURIAM

Plaintiffs Edythe and Mark Tortorello appeal from an order of the Law Division granting summary judgment in favor of defendant Harleysville Insurance Company (Harleysville) pursuant to a "step-down" provision contained in a business automobile insurance policy issued to Dependable Safe and Lock, Inc. (Dependable), a company partially owned by Mr. Tortorello. The court ruled that the policy, which provided underinsured motorist (UIM) coverage of $1,000,000, was not available to Mrs. Tortorello. We affirm.

Mrs. Tortorello was involved in an automobile accident on March 22, 1999 in which she sustained serious personal injuries. She was driving her personal vehicle when that vehicle was struck by the vehicle of a non-party. The non-party had an insurance policy limit of $50,000, that was exhausted. The Tortorellos had a family automobile insurance policy with UIM benefits of $100,000 that had also been exhausted.

Prior to the accident, defendant Harleysville had also issued a business automobile policy that provided $1,000,000 in UM/UIM coverage. That policy listed the business, Dependable Safe and Lock, Inc., and the two owners, Mark Tortorello and Rodney Mahan, as the sole "named insureds." Mrs. Tortorello was not a named insured under the Harleysville policy and was not named in the declaration sheet. As a "family member" of a named insured she was, however, an insured under the policy.

Harleysville does not dispute that plaintiff Edythe Tortorello is an "insured" under the provisions of its policy. It, nevertheless, denied coverage, relying upon the step-down provision of the UIM endorsement. That provision limits the recovery available when an insured is not listed as a named insured under the terms of the policy. The limiting provision states:

D. Limit of Insurance

1. Regardless of the number of covered "autos", "insureds", premiums paid, claims made or vehicles involved in the "accident", the Limit of Insurance shown in the Schedule or Declarations for Uninsured Motorists Coverage and Underinsured Motorists Coverage is the most we will pay for all damages resulting from any one "accident" with an "uninsured motor vehicle" or an "underinsured motor vehicle".

a. However, subject to our maximum Limit of Insurance for this coverage, if:

(1) An "insured" is not the individual named insured under this policy;

(2) That "insured" is an individual named insured under one or more other policies providing similar coverage; and

(3) All such other policies have a limit of insurance for similar coverage which is less than the Limit of Insurance for this coverage;

then the most we will pay for all damages resulting from any one "accident" with an "uninsured motor vehicle" or an "underinsured motor vehicle" shall not exceed the highest applicable limit of insurance under any coverage form or policy providing coverage to that "insured" as an individual named insured.

Stated simply, this "step-down" provision operates to limit UIM coverage to the maximum amount of coverage an insured, other than an individually named insured, has available under any policy of insurance in which he or she is an individually named insured. Thus, Harleysville contended and the motion judge ruled the maximum amount recoverable by plaintiffs under the Harleysville policy would be the difference between the tortfeasor's $50,000 policy limit and $100,000 limit of the Tortorellos' own personal UIM coverage. Since the primary UIM carrier had already tendered its $100,000 less the tortfeasor's policy limit, plaintiffs have recovered the maximum allowed by the step-down provision of the Harleysville policy.

Plaintiffs argue in this appeal that (1) the coverage selection form provided by defendant referred to coverage for the family, thereby creating an inherent ambiguity and a reasonable expectation of coverage; (2) that the step-down provision is unenforceable and (3) that the trial court erred by relying on the cases cited by defendant that are inapplicable. While certain of these arguments may have appeared to be viable at the time they were raised below and in the briefs filed on this appeal, they are no longer so. While this appeal was pending, our Supreme Court rendered its opinions in Pinto v. New Jersey Mfrs. Ins. Co., 183 N.J. 405 (2005) and Murawski v. CNA Ins. Co., 183 N.J. 423 (2005).

In those companion cases, the Court held that a commercial auto insurance policy containing language that designates a business entity as the only individually named insured, and which does not designate any human agent, is not ambiguous. Pinto, supra, 183 N.J. at 417; Murawski, supra, 183 N.J. at 426. In such an instance, no reasonable expectation of coverage arises except by virtue of the policy language itself. The Court also held that step-down clauses are enforceable though they place a cap on an employer's UIM exposure at the limit provided by any policy or coverage in which an injured employee or other insured is an individually named insured. By those standards, the step-down clause in this matter was properly enforced by the grant of summary judgment in Harleysville's favor. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Plaintiff's other arguments do not warrant discussion in a written opinion. R. 2:11-3(e)(2).

 
Affirmed.

(continued)

(continued)

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A-5822-03T5

April 11, 2006