RICHARD J. McLAUGHLIN v. NEW JERSEY MANUFACTURERS INSURANCE COMPANY

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1542-04T11542-04T1

RICHARD J. McLAUGHLIN,

Plaintiff-Appellant,

v.

NEW JERSEY MANUFACTURERS

INSURANCE COMPANY,

Defendant-Respondent.

_____________________________

 

Argued November 28, 2005 - Decided January 20, 2006

Before Judges Lintner and Gilroy.

On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. BUR-L-587-04.

Daniel C. Linn argued the cause for appellant (Aversa & Linn, attorneys; Mr. Linn, on the brief).

Stacy L. Moore, Jr., argued the cause for respondent (Parker McCay, attorneys; Mr. Moore, on the brief).

Daniel E. Rosner, attorneys for amicus curiae Association of Trial Lawyers-NJ (Adam M. Smallow and Mr. Rosner, on the brief).

PER CURIAM

Plaintiff, Richard J. McLaughlin, appeals from two orders entered in the Law Division on October 8, 2004, granting summary judgment to defendant, New Jersey Manufacturers Insurance Company (NJM), and denying plaintiff's cross-motion for summary judgment. For reasons expressed, we affirm.

We briefly state the procedural history and undisputed facts. On August 3, 2000, plaintiff was the owner and operator of an automobile insured by NJM when he was involved in an automobile accident with an automobile operated by Exor Natal. Natal pulled out from a cut-through in a roadway and collided with plaintiff's motor vehicle. At the time of the accident, Thomas Little was a passenger in the vehicle driven by Natal, and owned by Thomas Little's wife, Felicia. On the date of the accident, plaintiff's automobile insurance policy provided first-party single limit underinsured motorist (UIM) benefits in the amount of $100,000. The Little vehicle was insured by NJM for liability insurance with a single-limit policy in the amount of $300,000. Natal owned his own motor vehicle that was insured for liability coverage with a single-limit policy in the amount of $100,000 by Selective Insurance Company. As a result of the accident, Thomas Little died, and McLaughlin suffered personal injuries.

Plaintiff, and the executrix of the Estate of Thomas Little, instituted personal injury and wrongful death/survival actions against different defendants for compensatory damages. The two actions were consolidated, and by order of May 16, 2002, the $400,000 in automobile insurance liability funds covering Natal for the accident, were deposited with the court. Because the parties to the two actions were not able to agree on allocation of the liability funds between them, they agreed to submit the matter to binding arbitration for determination of both liability and damages.

On April 30, 2003, the arbitrator determined that Natal was solely responsible for the accident, and awarded compensatory damages to the Estate of Little in the amount of $2,000,000 and compensatory damages to plaintiff in the amount of $200,000. The arbitrator made a pro-rata distribution of the $400,000 deposited liability insurance funds between the two claimants by allocating $360,000 to the Estate of Little and $40,000 to plaintiff. The amounts actually distributed to the parties under a consent order entered on June 27, 2003, were $363,640 to the Estate of Little, and $36,360 to plaintiff. Plaintiff made a claim for UIM benefits under his NJM policy seeking the balance of the determined damages, less the third-party amount he received from Natal, or, $63,640. NJM denied the claim, after which plaintiff filed the present declaratory judgment action. On September 7, 2004, NJM filed its motion for summary judgment for dismissal of the complaint arguing that because the Natal vehicle had $400,000 liability insurance coverage available to the operator, and that amount is greater than plaintiff's UIM limit of $100,000, that the Natal vehicle was not underinsured at the time of the accident. On September 27, 2004, plaintiff cross-moved for summary judgment contending that the tortfeasor's vehicle was underinsured because the amount of the tortfeasor's coverage that was actually made available to plaintiff was less than the amount of plaintiff's UIM coverage. On October 8, 2004, Judge Wellerson issued a written tentative decision determining that the tortfeasor's vehicle was not underinsured as that term is defined in N.J.S.A. 17:28-1.1e(1). Confirmatory orders granting NJM's motion for summary judgment, dismissing plaintiff's complaint, and denying plaintiff's cross-motion for summary judgment were entered by the court the same date, and this appeal followed.

A trial court will grant summary judgment to the moving party "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c); see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). "An issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact." R. 4:46-2(c).

On appeal, "the propriety of the trial court's order is a legal, not a factual, question." Pressler, Current N.J. Court Rules, comment 3.2.1 on R. 2:10-2 (2006). "We employ the same standard that governs trial courts in reviewing summary judgment orders." Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

The question presented on appeal concerns the interpretation of N.J.S.A. 17:28-1.1e(1), when there are multiple claimants whose total damages exceed the amount of liability insurance coverage available to a tortfeasor. The statute defines an underinsured motor vehicle as one for which:

[T]he sum of the limits of liability under all bodily injury and property damage liability bonds and insurance policies available to a person against whom recovery is sought for bodily injury or property damage is, at the time of the accident, less than the applicable limits for underinsured motorist coverage afforded under the motor vehicle insurance policy held by the person seeking that recovery.

[N.J.S.A. 17:28-1.1e(1).]

Plaintiff argues that the motion judge erred by misconstruing the word "available" in the statute because the judge failed to determine that the vehicle operated by Natal (tortfeasor) was "underinsured" as to the plaintiff, one of several victims in the accident. Plaintiff contends that the sum of the limits of liability insurance covering the tortfeasor was reduced by the payment of claims of other victims, thereby making the amounts of insurance "available" for actual payment to plaintiff lower than his personal UIM coverage.

Plaintiff acknowledges that his requested interpretation runs counter to other cases previously decided by this court where there were multiple claimants whose total damages exceeded the amount of insurance coverage available under a tortfeasor's liability coverage. See David v. Gov't Employees Ins. Co., 360 N.J. Super. 127, 149-51 (App. Div.), certif. denied, 178 N.J. 251 (2003); Tyler v. N.J. Auto. Full Ins. Underwriting Ass'n, 228 N.J. Super. 463 (App. Div. 1988). Notwithstanding, plaintiff requests that this court ignore prior precedents and construe the statutory definition more expansively. Plaintiff "contends that when the word `available' is used as part of the statutory definition of `underinsurance[,]' that word refers to the portion of the tortfeasor's liability insurance that is actually `available' or applicable to the particular claim of [the] insured." We reject the invitation because to do so would require this court to ignore principles of statutory interpretation.

In construing a statute, the function of a court is to determine the intent of the Legislature and "generally, the best indicator of that intent is the statutory language." DiProspero v. Penn, 183 N.J. 477, 492 (2005). "A clear and unambiguous statute is not open to construction or interpretation, and to do so in a case where not required is to do violence to the doctrine of the separation of powers." Watt v. Mayor of Franklin, 21 N.J. 274, 277 (1956). "Such a statute is clear in its meaning and no one need look beyond the literal dictates of the words and phrases used for the true intent and purpose in its creation." Ibid. It is not the function of a court to "presume that the Legislature intended something other than that expressed by way of the plain language." O'Connell v. State, 171 N.J. 484, 488 (2002).

We determine that the statute is clear and unambiguous and requires no other interpretation than as written. A "tortfeasor is 'underinsured' only when all the liability coverage insuring his or her purportedly underinsured vehicle is less than the UIM benefits `held' by the UIM claimant." French v. N.J. Sch. Bd. Ass'n Ins. Group, 149 N.J. 478, 483 (1997) (emphasis in original). It is only if this threshold analysis of French is met should there be a determination as to whether the damages exceed the amount received from the settling tortfeasor. Id. At 483.

We conclude that the prior opinions of this court in David and Tyler are consistent with the aforementioned principles of statutory construction, and we decline to interpret the statute more liberally or expansively as requested by plaintiff. Given the Court's approval of Tyler, see French, supra, 149 N.J. at 483, and the prior interpretations of the statute by this court that have been accepted by the insurance industry, we determine that it would be inappropriate for this court to disturb what is otherwise a well-settled interpretation of a statute.

Plaintiff also argues that the motion judge erred by failing to apply the doctrine of reasonable expectations of the plaintiff-insured, that he could make a recovery under the UIM provision of his policy for the unpaid balance of his claim when the tortfeasor's available liability limits were exhausted due to a pro-rata distribution between multiple victims from an accident. Because we find the definition of an underinsured motor vehicle in N.J.S.A. 17:28-1.1e(1) to be clear and unambiguous, we reject plaintiff's argument premised on the doctrine of "reasonable expectations." Courts apply the doctrine of "reasonable expectations" when interpreting ambiguities in insurance contracts. See Meier v. N.J. Life Ins. Co., 101 N.J. 597, 612-13 (1986), "Application of this doctrine leads to a basic tenet of insurance law that in interpreting insurance contracts any ambiguities should be construed against the insurer and in favor of the insured."). Such is not the case here.

 
Affirmed.

(continued)

(continued)

9

A-1542-04T1

January 20, 2006