Nelson v Travelers Prop. Cas. Cos.

[*1] Nelson v Travelers Prop. Cas. Cos. 2008 NY Slip Op 50946(U) [19 Misc 3d 1129(A)] Decided on March 27, 2008 Supreme Court, Monroe County Polito, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 27, 2008
Supreme Court, Monroe County

Valerie M. Nelson, Individually, and as Limited Executrix of the Estate of Frank C. Nelson, Deceased, Plaintiff,

against

Travelers Property Casualty Companies, Defendant.



07/12584



APPEARANCES:

RICHARD G. VOGT, P.C.

RICHARD G. VOGT, ESQ., of Counsel

Attorneys for Plaintiff

Office and P.O. Address

228 Plymouth Avenue South

Rochester, NY 14608

BROWN & KELLY, LLP

JOSEPH M. SCHINTTER, ESQ., of Counsel

Attorney for Defendant

1500 Liberty Building

Buffalo, NY 14202

William P. Polito, J.

Defendant opposes and cross moves for a judgment declaring that the Travelers policy covering plaintiff's vehicle which was not involved in the two car accident: 1. affords SUM limits in the amount of $100,000/$300,000; 2. That the amount of $100,000 is the maximum potentially available for the claim of plaintiff against Travelers before any valid offset; 3. That pursuant to the offset provision, the $100,000 SUM is to be reduced by the Mercury Insurance Company's settlement payment to plaintiff of $50,000 on behalf of one of the vehicles involved in the accident; 4. That pursuant to the Priority of Coverage provision, the Nationwide SUM endorsement covering the second vehicle involved in the accident is primary relative to the Travelers' SUM endorsement; 5. Requesting the Court schedule a hearing on notice to Travelers, to determine how the available $225,000 SUM limits for Nationwide should be allocated among the three injured plaintiffs; 6. That pursuant to the Priority of Coverage provision, any payment made pursuant to the Nationwide SUM endorsement should reduce the available SUM limits for Travelers.

Decision:

Plaintiff's motion is denied. Defendant's cross motion is granted. Defendant's positions are correct. Plaintiff is only entitled to $100,000 under the SUM policy with Travelers less the $50,000 already paid by Mercury Insurance Co. The Court declares that any sums received under the Nationwide SUM policy by plaintiff will further reduce any sums to be received by plaintiff from Travelers $50,000 balance.

Facts:

This declaratory judgment action arises out of an automobile accident wherein plaintiff decedent was killed. The insurance company of one of the owner operators has paid plaintiff $50,000. The insurance company insuring the vehicle in which decedent was a passenger has offered its $300,000 to all injured parties with decedent's estate possibly receiving an additional $100,000 thereof.

Plaintiff contends that the $100,000/$300,000 SUM policy issued to decedent is

ambiguous under the SUM limits endorsement entitling plaintiff to $300,000 less the $50,000 already received. Plaintiff further contends that the $100,000 which plaintiff may receive when the other available policy funds are distributed should not be subtracted therefrom since those potential payments have not been received, nor has a determination been made as to the amount decedent will receive. Plaintiff in his later submission also [*2]contends that defendant is not entitled to its set off because the set off provisions are ambiguous, and the disclaimer letter is insufficient to provide the necessary notice.

Law and Rationale:

Plaintiff decedent contends that Paragraph 5 of the SUM endorsement of Traveler's policy states: "SUM LIMITS: The SUM limits payable under this SUM endorsement shall be: (a) the SUM limits stated in the Declarations; or (b) if the bodily injury ends in death, we will provide SUM limits of the higher of the SUM limits stated in the Declarations, or $50,000 for such bodily injury resulting in death sustained by one person as the result of any one accident and, subject to this per person limit, $100,000 for such bodily injury resulting in death sustained by two or more persons as the result of any one accident". The $50,000 under the SUM limits is the mandatory minimum under the law. Plaintiff contends that there can only be one reading of this clause that defendant insurer is obligated to pay the higher amount stated in the SUM limits that is $300,000 ($100,000/$300/000 policy).

The Court's full reading of paragraph 5 in conjunction with the SUM declaration of $100,000/$300,000 finds that paragraph 5 simply and clearly states that plaintiff is entitled to the higher of the amount of the SUM limits declaration of $100,000 per person or $50,000 under the SUM limit in paragraph 5 whichever is greater.

Defendant submits that the SUM endorsement is a prescribed policy form, prepared by the Insurance Department as set forth at 11 NYCRR 60-2.3(f) based upon the statute, Insurance Law Section 3420(f)(2). The SUM limits language in the policy mirrors the SUM limits language promulgated by the Insurance Department (11 NYCRR 60-2.3(5)(b)).

The Court of Appeals, in dicta, has interpreted that where the $300,000 per accident limit in a $100,000/$300,000 policy is subject to the per person limit, the company is required only to pay the lower amount or the $100,000 per person. (Mostow v. State Farm Insurance, 88 NY2d 321, (1996)).

However, even if this Court were to find that plaintiff's strained reading of paragraph 5 of the SUM endorsement was ambiguous, such ambiguity must be resolved consistent with the other provisions, including the "Limit of Liability" clause, which clearly and unambiguously limits the amount any one person can receive to $100,000 under the SUM $100,000/$300,000 endorsement. The policy states, "The applicable limit shown for "each person" is the most we will pay for all damages suffered for bodily injury by one insured in any one accident. Subject to the limit for "each person", the [*3]applicable limit shown for "each accident" is most we will pay for all damages for bodily injury suffered by all insureds in any one accident". (Polict page 3, No.6). Where there is an ambiguity the language must be interpreted so as to be consistent with and give effect to all its clauses. (Excess Insurance Co. V. Factory Mutual, 3 NY3d 577, 582, (2004)).

Plaintiff in his later submission, has all but abandoned his position that the per person limit of $100,000 is inapplicable. Instead, and contrary to his earlier submissions, plaintiff's counsel now asserts that defendants are not entitled to a set off because the SUM endorsement in the policy was ambiguous and did not provide the actual set off in the declarations page, and the disclaimer letter was untimely, ambiguous and failed to specifically reference the sections permitting the set offs.

Plaintiff's reliance on Hager v. Allstate Insurance, is misguided and distinguishable. (166 Misc 2d 905, 907 (Sup. Ct., Orange County, 1995); aff'd 199 AD2d 383; app.den. 83 NY2d 757). In Hager, at 907, the declarations page did not make specific references to reductions under the SUM policy, but did under other types of coverage, such as collision and comprehensive. The Court determined that since the offset provision was not stated under the sum provisions, no offset was intended. (Id). However, unlike that situation, here the policy declarations page makes specific reference under "D. Supplementary Uninsured/Underinsured Motorists $100,000 each person, $300,000 each accident, See Endorsement A31042, See Important Message". The reference to Endorsement A31042 (6,7,8) specifically sets forth the set off provision, non stacking and priority of coverage. Since this language is clear and unambiguous and referenced under the SUM endorsement on the declarations page, it is valid and enforceable. (See Stolarz v. New Jersey Manufacturers Ins, 81 NY2d 219, (1993)).

Plaintiff's reliance on the Jonathan Dachs, Esq. Article "Uninsured Motorist (UM) Underinsured Motorist (UIM) and Supplementary Uninsured Motorist (SUM) Coverage in New York—Pre and Post Regulation 35-D" does not support his position regarding the set off provisions. Instead, the article through its analysis of several cases supports defendant's position that the offset provisions under the policy here would be valid and applicable. (Id at 485 f,g) citing several similar cases including Stolarz where the set off provisions were upheld. (Zurich v. Wilburn, 212 AD2d 620, 2nd Dept., 1995); Nationwide v. Hunley, 210 AD2d 947, (4th Dept., 1994); Nationwide v. Davis, 195 AD2d 561, (2nd Dept., 1993); Nationwide v. Winn, 215 AD2d 958, (3rd Dept., 1995)).

Plaintiff's remaining contention that the disclaimer letter was untimely and ambiguous, because as counsel claims, the specifically numbered set off provisions under the policy were not set forth, is without merit. The 4th Department decided in a prior [*4]case, that " the failure to disclaim timely, does not preclude defendant insurer from raising the defense of coverage'" (Waskiewicz v. NY Central Mutual, 252 AD2d 944, (4th Dept., 1998)).

Accordingly, defendant is entitled to the initial set off of $50,000 already paid to plaintiff and a set off of any amounts received under the Nationwide policy.

This shall constitute the decision and order of the Court. The signing of this decision and order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the provisions of that rule regarding entry, filing and notice of entry. However, the filing of the underlying motion papers upon which this motion was made is hereby dispensed with pursuant to CPLR 2220. Attorney for the defendant is directed to enter this Decision/Order without notice and to serve all attorneys of record with a copy of this decision with notice of entry.

SO ORDERED.

Dated this 27th day of March, 2008 at Rochester, New York.

______________________________

HON. WILLIAM P. POLITO

JUSTICE SUPREME COURT