SYLLABUS
(This syllabus is not part of the opinion of the Court. It has
been prepared by the Office of the Clerk for the convenience of the
reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not
have been summarized).
Argued October 21, 2003 -- Decided January 22, 2004
VERNIERO, J., writing for a unanimous Court.
The issues before the Court are whether Christine Vassiliu’s survival and wrongful death actions trigger separate “per person” coverage claims under a split limit insurance policy or whether the claims are subject to a single coverage limit and whether the UIM insurers are entitled to a credit for an amount received by Vassiliu in a settlement of claims against third-party tortfeasors.
On June 24, 1995, Hristos Vassiliu was driving his van on Route 553
in Franklin Township, Gloucester County. A vehicle driven by Shaun O’Brien collided with
Hristos Vassiliu’s van, resulting in Hristos’ death. At the time of the accident,
Christine Vassiliu, Hristos’ (decedent’s) wife, was pregnant with the couple’s first child. In
her capacity as Administratrix of decedent’s estate and Administratrix Ad Prosequendum for decedent’s
heirs (collectively, Vassiliu), Vassiliu filed a personal injury complaint, consisting of wrongful death
and survivorship claims against Shaun O’Brien, and products liability claims against the manufacturer
and seller of decedent’s van.
O’Brien was insured under two liability policies. The first policy, issued by New
Hampshire Insurance Company (New Hampshire), was a $35,000 single limit policy. The second
policy, issued by Prudential Property & Casualty Insurance Company (Prudential), was a $15,000
“per person” and $30,000 “per accident” split limit policy. In addition, the decedent
was covered by underinsured motorist (UIM) coverage under policies issued by Prudential and
Selective Insurance Company (Selective). Both of those policies also had split limit coverage
but in larger amounts, $100,000 “per person” and $300,000 “per accident.”
The “per person” provision in Prudential’s policy provides that the amount shown on
the declarations page under “Bodily Injury-Each Person” is the limit of the insurer’s
liability for all damages, “including damages for care and loss of services, arising
out of bodily injury to one person as a result of any one
accident.” Prudential’s UIM provision contains language nearly identical to the “per person” language
in the liability policy. Selective’s UIM provision contains similar language. The UIM policies
also include provisions concerning whether the carriers are entitled to credits or setoffs
for settlements. Prudential’s policy provides that the amount the carrier agrees to pay
will be reduced by any amount recoverable from those responsible for an accident.
Selective’s policy states that the UIM coverage will be reduced by all sums
paid because of bodily injury or property damage by or on behalf of
persons or entities that may be legally responsible.
Just prior to the start of trial, the products liability defendants settled for
$215,000. The matter then proceeded to trial without a jury. O’Brien filed for
bankruptcy during the trial. Thereafter, Vassiliu agreed that O’Brien’s damages would be limited
to the proceeds from his insurance policies and the trial continued at the
permission of the bankruptcy court.
At the conclusion of trial, the court found that O’Brien was one hundred
percent negligent and awarded damages of $175,000 on the survival claim and $1,750,000
for the wrongful death claim, as well as funeral expenses. New Hampshire paid
$35,000, the full amount owed under its liability policy, and Prudential paid $15,000
under its liability policy. Vassiliu sought an additional $15,000 from Prudential’s liability policy,
arguing that the survival and wrongful death actions each qualified for the “per
person” coverage. On the same grounds, Vassiliu filed a declaratory judgment action, seeking
the $100,000 “per person” amount from the UIM policies.
The trial court agreed with Vassiliu, reasoning that wrongful death and survival claims
are treated as separate and discrete actions “affording different damages remedies to different
parties, even though they may arise from the identical occurrence…” Thus, the court
concluded that Vassiliu was entitled to $15,000 for the wrongful death action and
$15,000 for the survival action under the Prudential liability policy. Similarly, Vassiliu was
entitled to $200,000 in UIM coverage, $100,000 for the wrongful death claim and
$100,000 for the survival action. The trial court reduced the UIM amounts by
the amounts obtained under O’Brien’s liability policies. The court denied the insurers’ claim
that they are entitled to set off the $215,000 products liability settlement from
the UIM amount awarded.
On appeal, the Appellate Division affirmed in part and reversed in part. The
appellate panel agreed with the trial court that the survival and wrongful death
actions each triggered a separate “per person” limit. The appellate panel disagreed in
respect of the set off, concluding that the insurers are entitled to a
credit for the products liability settlement monies. In total, the Appellate Division’s disposition
resulted in $65,000 in coverage ($35,000 under the New Hampshire policy and $30,000
under the Prudential policy. Because the $215,000 settlement exceeded the total UIM coverage
limit, there was no payment awarded.
The Supreme Court granted Prudential’s petition for certification in respect of the “per
person” limit issue and granted Vassiliu’s cross-petition on the issue of the UIM
setoff.
HELD: Because Vassiliu’s survival and wrongful death actions are derivative of and dependent
on the decedent’s injuries, including his death, those actions are subject to a
single “per person” limit in the Prudential liability policy as well as the
two UIM policies. In addition, the UIM carriers are entitled to a credit
for the amount received from the products liability settlement.
1. The “person” referenced in Prudential’s liability policy is the decedent in this
case, not the decedent’s estate or his heirs reflected in Vassiliu’s wrongful death
and survival actions. Because the policy limits liability “for all damages… arising out
of bodily injury to one person,” the total coverage is $15,000, the single
“per person” limit. There is no ambiguity in the policy necessitating a contrary
approach. (P. 10)
2. While Vassiliu’s wrongful death and survival actions are legally distinct, those actions
trigger a single “per person” limit in these circumstances. Where an insurance policy
fixes a maximum recovery for bodily injury to one person, the limitation is
applicable to all claims of damage flowing from such bodily injury. It is
immaterial that a person other than the one who suffered the bodily injuries
may claim some part of the damages. (Pp. 10-12)
3. An insurance contract that provides liability for “all damages…arising out of bodily
injury” includes death as a basis of a claim. The Court does not
accept the notion that the decedent’s death is somehow distinct from his pre-death
bodily injuries for purposes of the “per person” coverage limitation. Courts in other
jurisdictions have reached the same conclusion. (Pp. 12-14)
4. On the setoff issue, the Court affirms the judgment of the Appellate
Division substantially for the reasons expressed in that court’s opinion. Thus, the UIM
carriers are entitled to a credit for the $215,000 products liability settlement. (Pp.
14-15)
5. Because Vassiliu’s claims are subject to a single “per person” limit, Vassiliu
is entitled to $50,000 in liability insurance ($35,000 from the Hampshire policy and
$15,000 from the Prudential policy). Vassiliu would also be entitled to $100,000 total
UIM coverage but the UIM carriers are entitled to a credit for that
entire amount in view of the $215,000 products liability settlement. (Pp. 14-15)
Judgment of the Appellate Division is AFFIRMED IN PART and REVERSED IN PART.
CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ZAZZALI, ALBIN and WALLACE join in
JUSTICE VERNIERO’S opinion.
SUPREME COURT OF NEW JERSEY
A-63/
64 September Term 2002
CHRISTINE R. VASSILIU, individually, as General Administratrix and as Administratrix ad Prosequendum of
the Estate of HRISTOS VASSILIU, Deceased and as Guardian ad Litem for CHRISTINA
R. VASSILIU, a minor,
Plaintiff-Respondent,
v.
DAIMLER CHRYSLER CORPORATION, MT. EPHRAIM DODGE, INC., SHAUN L. O'BRIEN, SCOTT RHODES, JOHN
DOES #1-5, (fictitious names of drivers of vehicles involved in the subject collision);
JOHN DOES #6-10, (fictitious names of owners of vehicles involved in the subject
collision and or employers of any drivers); JOHN DOES #11-20, (fictitious names of
individuals, sole proprietorships, partnerships, corporations or governmental entities involved in the retail sale,
distribution, assembly, installation, design, repair, maintenance, manufacture or wholesale of the subject, product
and/or any of its component parts); JOHN DOES #21-25, (fictitious names of individuals,
sole proprietorships, partnerships, corporations or governmental entities who repaired the product);
JOHN DOES #26-30, (fictitious names of individuals, sole proprietorships, partnerships, corporations or governmental
entities who inspected the product); jointly, severally, or in the alternative,
Defendants.
CHRISTINE R. VASSILIU, as General Administratrix and as Administratrix ad Prosequendum of the
Estate of HRISTOS VASSILIU, Deceased,
Plaintiff-Respondent
and Cross-Appellant,
v.
PRUDENTIAL PROPERTY & CASUALTY INSURANCE COMPANY,
Defendant-Appellant
And Cross-Respondent,
and
SELECTIVE INSURANCE COMPANY,
Defendant-Respondent
and Cross-Respondent,
and
PARKWAY INSURANCE COMPANY,
Defendant.
Argued October 21, 2003 – Decided January 22, 2004
On certification to the Superior Court, Appellate Division, whose opinion is reported at
356 N.J. Super. 447 (2002).
Daniel J. Pomeroy argued the cause for appellant and cross respondent (Mortenson and
Pomeroy, attorneys; Mr. Pomeroy and Karen E. Heller, on the briefs).
Louis J. DeVoto argued the cause for respondent and cross appellant (Ferrara, Rossetti
& DeVoto, attorneys; Mr. DeVoto and Jennifer A. Deiter, on the brief).
Stephen G. Sobocinski argued the cause for respondent and cross respondent (Tucker &
Munyon, attorneys).
Susan Stryker submitted a brief on behalf of amici curiae Alliance of American
Insurers, American Insurance Association, National Association of Independent Insurers and Insurance Council of
New Jersey (Sterns & Weinroth, attorneys; Ms. Stryker and Mitchell A. Livingston, on
the brief).
Kevin Haverty on behalf of amicus curiae The Association of Trial Lawyers of
America-New Jersey relied upon the brief submitted to the Appellate Division (Williams, Cuker
& Berezofsky, attorneys).
JUSTICE VERNIERO delivered the opinion of the Court.
This is an insurance coverage case. Plaintiff commenced a survival action and wrongful
death action arising out of her husband’s death due to an automobile accident.
Specifically, the decedent died of injuries that he had sustained when his van
was struck by another vehicle. The principal question is whether plaintiff’s actions trigger
separate “per person” coverage claims under a split limit insurance policy or whether
the claims are subject to a single limit. A second question is whether
the insurers are entitled to a credit for an amount received by plaintiff
in settlement of claims against the manufacturer and seller of the decedent’s van.
The Appellate Division concluded that, because survival and wrongful death actions legally are
distinct, they each trigger a separate “per person” limit. As for the second
question, the court found that the insurers were entitled to set off an
amount otherwise owed as underinsured motorist coverage with the amount that plaintiff had
received in settlement of claims asserted against two of the non-insurer defendants. Based
on the unambiguous language found in the applicable policies, we reverse the Appellate
Division’s judgment in respect of the “per person” limit question. We affirm that
court’s judgment insofar as the setoff question is concerned.
On June 24, 1995, Hristos Vassiliu was driving his van in a southerly direction on Route 553 in Franklin Township, Gloucester County. At the same time Shaun O’Brien was driving a vehicle in a westerly direction on Route 604, which intersects Route 553. The O’Brien vehicle collided with the Vassiliu vehicle after O’Brien apparently had ignored a red-blinking light and stop sign that controlled the intersection on the side of Route 604. Vassiliu died of his injuries.
At the time of the crash the decedent’s wife was pregnant with the couple’s first child. In her capacity as General Administratrix for the decedent’s estate and as Administratrix Ad Prosequendum for the decedent’s heirs (collectively, plaintiff), the decedent’s wife filed a personal injury complaint consisting of a survival action and a wrongful death action, naming O’Brien as a defendant. Based on a products liability theory of recovery, plaintiff also sued the manufacturer and seller (separate corporate entities) of the decedent’s van.
O’Brien was insured under two liability policies. The first policy was a $35,000 single limit policy issued by New Hampshire Insurance Company (New Hampshire), and the second was a $15,000 “per person” and $30,000 “per accident” split limit policy issued by Prudential Property & Casualty Insurance Company (Prudential). In addition, the decedent was covered by underinsured motorist (UIM) coverage under policies issued by Prudential and Selective Insurance Company (Selective). Those policies also consisted of split limit coverage but in larger amounts, $100,000 “per person” and $300,000 “per accident.”
The “per person” provision in Prudential’s liability policy provides:
Amount – Bodily Injury: Each Person
The amount shown on the Declarations Page under “Bodily Injury – Each Person” is
the limit of our liability under this part for all damages, including damages
for care or loss of services, arising out of bodily injury to one
person as a result of any one accident.
As for Prudential’s UIM provision, there is language nearly identical to the “per
person” language in the insurer’s liability policy. Selective’s UIM provision contains similar language.
(Although, as will be seen below, that language refers solely to “Uninsured Motorists
Coverage,” the policy states elsewhere that it includes UIM coverage.) Selective’s policy provides,
in relevant part:
LIMIT OF LIABILITY
The limit of Bodily Injury Liability shown in the Schedule or in the
Declarations for each person for Uninsured Motorists Coverage is our maximum limit of
liability for all damages, including damages for care, loss [of] services or death,
arising out of “bodily injury” sustained by any one person in any one
accident.
The policies also include provisions concerning whether the UIM carriers are entitled to
credits or setoffs for settlements. Prudential’s policy provides that “[t]he amount we agree
to pay under this part will be reduced by any amount recoverable from
persons responsible for [an] accident[.]” In the same vein, Selective’s policy states that
“the limit of liability [for UIM coverage] shall be reduced by all sums
. . . [p]aid because of the ‘bodily injury’ or ‘property damage’ by
or on behalf of persons or organizations who may be legally responsible.”
Around the time of jury selection the products liability defendants settled for $215,000
without admitting liability. The matter then proceeded without a jury. During the trial
O’Brien filed for bankruptcy. Plaintiff eventually agreed that O’Brien’s damages would be limited
to the proceeds from that defendant’s insurance policies, and the bankruptcy court permitted
the trial to proceed.
The trial resulted in a finding that O’Brien was one hundred percent negligent.
The court awarded damages in the amount of $175,000 for the survival action
and $1,750,000 for the wrongful death action, in addition to funeral expenses. New
Hampshire ultimately paid $35,000, the full amount due under its liability policy, and
Prudential paid $15,000 from its liability policy. As noted, plaintiff also received $215,000
from the products liability settlement.
Plaintiff also sought an additional $15,000 from the Prudential liability policy, arguing that
the survival and wrongful death actions each qualified for the “per person” coverage.
On the same grounds, plaintiff filed a declaratory judgment action seeking the $100,000
“per person” amount from Prudential’s and Selective’s UIM policies. The parties do not
question the trial court’s determination that, in this case, “[t]he limits of multiple
available UIM policies are not stacked. Instead, any recovery is prorated between the
applicable UIM policies in the same proportion as the limits of each bears
to the total of the limits of all available UIM policies.” Vassiliu v.
Daimler Chrysler Corp.,
356 N.J. Super. 546, 549 n.1 (Law Div. 2000) (citing
N.J.S.A. 17:28-1.1c).
The trial court agreed with plaintiff in all respects. It reasoned that “wrongful
death actions and survival actions are treated as separate and discrete actions affording
different damages remedies to different parties, even though they may arise from the
identical occurrence – the death of a family member from injuries sustained in a
vehicular accident.” Id. at 548. The court further explained that
since the coverage limits of the Prudential liability insurance policy at issue in
this case are $15,000/$30,000, a total of $30,000 is available: $15,000 for the
wrongful death action, and $15,000 for the survival action. Similarly, since the coverage
limits of the Prudential and Selective UIM policies at issue are each $100,000/$300,000,
a total of $200,000 in UIM coverage is available: $100,000 for the wrongful
death action, and $100,000 for the survival action.
[Id. at 548-49.]
The trial court reduced the UIM amount by the amounts obtained under O’Brien’s
liability policies, id. at 549, a reduction that the parties also do not
challenge. The court denied, however, the insurers’ claim that they are entitled to
set off the $215,000 products liability settlement from the UIM amount. Id. at
563.
The Appellate Division affirmed in part and reversed in part in a reported
decision. Vassiliu v. Daimler Chrysler Corp.,
356 N.J. Super. 447 (2002). The panel
agreed with the trial court that the survival and wrongful death actions “each
triggered a separate per person limit.” Id. at 455. It disagreed, however, with
the trial court’s decision in respect of the setoff question. After considering the
circumstances of the litigation, the nature of UIM coverage, the carriers’ policy language
pertaining to settlements, and relevant case law, the Appellate Division concluded that the
insurers are entitled to a credit for the products liability settlement monies. Id.
at 455-60.
In total, the Appellate Division’s disposition resulted in $65,000 in coverage ($35,000 under
the New Hampshire policy and $30,000 under the Prudential liability policy). Because the
$215,000 settlement exceeded the total UIM coverage, the available UIM coverage amounted to
zero dollars under the Appellate Division’s analysis. We granted Prudential’s petition for certification
(which Selective joined) concerning the “per person” limit issue, and granted plaintiff’s cross
petition regarding the UIM setoff question.
175 N.J. 547 (2003).
“[T]he words of an insurance policy are to be given their plain, ordinary meaning. In the absence of any ambiguity, courts should not write for the insured a better policy of insurance than the one purchased.” Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001) (internal citation and quotation marks omitted). Consistent with that basic tenet, we conclude that the “person” referenced in Prudential’s liability policy is the decedent in this case, not the decedent’s estate or his heirs as reflected in plaintiff’s survival and wrongful death actions. Because the policy limits liability “for all damages . . . arising out of bodily injury to one person,” the total coverage is $15,000, the single “per person” limit. We discern no ambiguity in the policy that would warrant a contrary result.
We find no fault in the analysis of the courts below in respect of their conclusion that plaintiff’s wrongful death and survivor actions legally are distinct. In Galante v. May, a different panel of the Appellate Division explained:
Actions under both the New Jersey Wrongful Death Act and the New Jersey Survivor Act arise from the death of a party, but “they serve different purposes and are designed to provide a remedy to different parties.” Smith v. Whitaker, 160 N.J. 221, 231 (1999). Recovery under the Wrongful Death Act compensates the survivors of the decedent for “the pecuniary losses they suffered because of the tortious conduct of others.” Ibid. (quoting Alexander v. Whitman, 114 F.3d 1392, 1398 (3d Cir. 1997)). The Survivor Act preserves for the decedent’s estate “any personal cause of action that decedent would have had if he or she had survived.” Id. at 233. Thus, the Wrongful Death Act benefits the heirs of the decedent, while the Survivor Act provides a remedy to a decedent’s executor or administrator.
[
364 N.J. Super. 284, 288 (2003).]
Notwithstanding the distinct nature of those claims, the Galante panel concluded, as we
do here, that a wrongful death action and survivor action trigger a single
“per person” limit in these circumstances. Id. at 293. In so holding, the
court cited the general rule that “under [insurance] policies fixing a maximum recovery
for bodily injury to one person, the limitation is applicable to all claims
of damage flowing from such bodily injury, and it is therefore, immaterial that
some part of the damages may be claimed by a person other than
the one suffering the bodily injuries.” Id. at 289 (internal citation and quotation
marks omitted) (alteration in original); see also DeFelice v. Beall,
274 N.J. Super. 592, 594 (App. Div.) (holding that claims of decedent’s dependents were subject to
“per person” limit in automobile insurance policy because claims were “derivative and dependent
upon the direct injury to the decedent”), certif. denied,
138 N.J. 268 (1994).
We hold that, because plaintiff’s survival and wrongful death actions are derivative of
and dependent on the decedent’s injuries, including his unfortunate death, those actions are
subject to a single “per person” limit in the Prudential liability policy. Given
the similar wording of the two UIM policies, we reach the same conclusion
in respect of those policies. We acknowledge that the Galante court distinguished its
holding from the Appellate Division’s opinion in this case by noting that, unlike
the policy in Galante, here Prudential’s policy does not explicitly list “death” when
describing the type of damages subject to the $15,000 limit. 364 N.J. Super.
at 290-91. (In contrast, Selective’s UIM provision specifically includes “death” so that presumably
the Galante court would not have distinguished its holding insofar as the Selective
policy is concerned.)
We are not, however, persuaded by that asserted distinction. By its explicit terms,
the Prudential “per person” limit applies “for all damages, including damages for care
or loss of services, arising out of bodily injury to one person as
a result of any one accident.” (Emphasis added.) As just noted, unlike the
language before the Galante court and the language in Selective’s UIM policy, the
language in the Prudential policy does not state, “for all damages, including damages
for care or loss of services or death, arising out of bodily injury
to one person as a result of any one accident.” Yet, the lack
of an expressed reference to “death” in the relevant phrase, which is set
off by the word “including,” does not mean that death is excluded as
a consequence of bodily injury. Rather, “the word ‘includes’ is usually a term
of enlargement, and not of limitation. . . . It, therefore, conveys the
conclusion that there are other items includable, though not specifically enumerated[.]” 2A Norman
Singer, Sutherland Statutory Construction § 47:07 at 231 (6th ed. 2000) (internal quotation marks
and footnote omitted); accord Fraser v. Robin Dee Day Camp,
44 N.J. 480,
485 (1965).
More broadly, common sense convinces us that an insurance contract that speaks to
liability for “all damages . . . arising out of bodily injury” includes
death, the ultimate harm a person might suffer, as a basis of a
claim. See Jaquez v. National Cont’l Ins. Co.,
178 N.J. 88, 100 (2003)
(applying “simple common sense” in support of holding regarding lack of coverage under
initial-permission rule in automobile insurance case). From that perspective, we do not accept
the notion that the decedent’s death somehow is distinct from his pre-death bodily
injuries for purposes of the “per person” coverage limitation.
Lastly, courts in other jurisdictions that have considered similar split limit policy language
also have concluded that only a single “per person” limit applies when there
are survivor and wrongful death claims arising out of the injury and death
of a single person. E.g., McKinney v. Allstate Ins. Co.,
722 N.E.2d 1125,
1128-29 (Ill. 1999) (holding that similar language was “not ambiguous and clearly limit[ed]
all claims arising out of [person’s] death to a single [per person] limit”);
Geico Gen. Ins. Co. v. Arnold,
730 So.2d 782, 785 (Fla. Dist.
Ct. App. 1999) (concluding that “plain and unambiguous terms” of policy limited insurer’s
total liability for all damages due to bodily injuries sustained by decedent to
“per person” limit); Cradoct v. Employers Cas. Co.,
733 S.W.2d 301 (Tex. App.
1987) (explaining that phrase “per person” applied to person injured in accident, not
other persons suffering loss because of that injury).
The remaining issue is whether the insurers are entitled to set off the UIM coverage amount with the amount plaintiff had received as a result of the products liability settlement. As already mentioned, in concluding that the carriers were entitled to such a credit, the Appellate Division considered the circumstances of the litigation, the nature of UIM coverage, the policy language pertaining to settlements, and relevant case law. Vassiliu, supra, 356 N.J. Super. at 455-60. We cannot improve on the Appellate Division’s meticulous analysis in that regard, and we affirm its judgment on the setoff question substantially for the reasons expressed in that court’s opinion.
In sum, plaintiff’s claims are subject to a single “per person” limit as provided in the unambiguous policies before us. Thus, in addition to the $215,000 settlement amount, plaintiff is entitled to $50,000 in liability insurance (the $35,000 amount due under the New Hampshire policy and one payment of $15,000 due under the Prudential policy). Under our construction, plaintiff also would be entitled to $100,000 in total UIM coverage (representing coverage for one person), prior to any setoff adjustment. However, the UIM carriers are entitled to a credit for that entire amount in view of the $215,000 products liability settlement.
The Appellate Division’s judgment is reversed in part, affirmed in part.
CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ZAZZALI, ALBIN, and WALLACE join in JUSTICE VERNIERO’s opinion.
SUPREME COURT OF NEW JERSEY
NO. A-63/64 SEPTEMBER TERM 2002
ON CERTIFICATION TO Appellate Division, Superior Court
CHRISTINE R. VASSILIU, etc.,
Plaintiff-Respondent,
v.
DAIMLER CHRYSLER CORPORATION,
et al.,
Defendants.
CHRISTINE R. VASSILIU, etc.,
Plaintiff-Respondent
and Cross-Appellant,
v.
PRUDENTIAL PROPERTY &
CASUALTY INSURANCE COMPANY,
Defendant-Appellant
and Cross-Respondent.
DECIDED January 22, 2004
Chief Justice Poritz PRESIDING
OPINION BY Justice Verniero
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY
CHECKLIST