SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-4149-93T2
DENISE A. HESSER,
Plaintiff-Respondent,
-v-
HARLEYSVILLE-GARDEN STATE
INSURANCE CO.,
Defendant-Appellant.
_________________________________________________________________
Argued September 27, 1995 - Decided January 31, 1996
Before Judges Skillman, Levy and Eichen.
On appeal from the Superior Court,
Law Division, Camden County.
J. Robert McGroarty argued the cause for
appellant (Mr. McGroarty, on the brief).
Warren W. Faulk argued the cause for
respondent; (Brown & Connery, attorneys; Mr.
Faulk, on the brief).
The opinion of the court was delivered by
P. G. LEVY, J.A.D.
In this matter we consider whether plaintiff's automobile
insurance policy or N.J.S.A. 17:28-1.1, or both, provided $75,000
uninsured motorist coverage plus $75,000 underinsured motorist
coverage for her injuries from an accident involving both uninsured
and underinsured vehicles, under a liability policy declaring
$75,000 to be its "maximum limit of liability for all damages
resulting from any one accident." Plaintiff was granted a
declaratory judgment, providing the total of both coverages
available regardless of the limit. We disagree and therefore
reverse.
Plaintiff was a passenger in a car owned and operated by
Linda Freund which collided with an automobile owned and driven by
Carmen Sylvester. Freund was insured by Keystone Insurance
Companies with liability coverage limits of $15,000 per person and
$30,000 per accident, while Sylvester was uninsured. Each
passenger (three in the Freund vehicle and one in Sylvester's) was
seriously injured, and Keystone agreed to tender its $30,000 policy
limit, subject to the passengers' agreement to equitably distribute
those proceeds.
Defendant Harleysville Garden State Insurance Co.
(Harleysville) issued a personal auto policy to plaintiff. She was
seriously hurt, with injuries to her brain, skull and face.
Plaintiff notified defendant that she sought $75,000 for her claim
against Sylvester under the policy's uninsured motorist (UM)
coverage as well as $75,000 for her claim against Freund under the
underinsured motorist (UIM) coverage. Harleysville agreed to pay
$75,000 to settle plaintiff's UM claim but denied any availability
of UIM coverage because its total liability under the policy was
limited to $75,000 for any one accident.
The various coverages selected when the Harleysville
policy was purchased are summarily stated on the declarations page
simply as:
Coverages Limits of Liability
LIABILITY $75,000 EA ACCDNT
UNINSURED MOTORIST $75,000 EA ACCDNT
Part C of the policy is the endorsement for Uninsured Motorists
Coverage - New Jersey. While both the declaration of coverage and
the endorsement use only the term "uninsured motorist," the policy
also includes coverage for underinsured motorists in this
endorsement. The "schedule" listing the vehicles to be insured
with their attendant limits of liability and premiums is headed (in
bold type) by the words: " UNINSURED MOTORISTS COVERAGE (Includes
Underinsured Motorists Coverage). The "insuring agreement" begins
by stating:
We will pay compensatory damages which an
insured is legally entitled to recover from
the owner or operator of an uninsured motor
vehicle or underinsured motor vehicle ....
Part C also contains the limits of the insurer's liability.
The limit of liability shown in the Schedule
or in the Declarations for this coverage is
our maximum limit of liability for all damages
resulting from any one accident. This is the
most we will pay regardless of the number of:
....
4. Vehicles involved in the accident.
....
(emphasis added)
Along with the policy, Harleysville supplied the mandated Buyer's Guide in compliance with N.J.A.C. 11:3-15.6, presumably read by plaintiff. The Buyer's Guide explains the difference
between UM and UIM coverage and that benefits are paid up to the
coverage limit selected by the policyholder, explicitly stating the
statutory minimum and maximum limits. In pertinent part it states:
Despite New Jersey law, which requires
auto insurance, many cars are not covered by
insurance. Some motorists break the law.
Many other motorists are residents of other
states which do not require auto insurance by
law.
Because these motorists can cause
accidents, you are required to buy uninsured
motorist coverage.
....
There are other motorists who have auto
insurance coverage but with very low limits.
When you buy uninsured motorist coverage, you
are also provided coverage to protect you from
those motorists who are underinsured. If you
are in an accident caused by such a motorist,
underinsured motorist coverage will pay
damages up to the difference between your
underinsured motorist coverage limit and the
other driver's liability coverage limit.
You must by law purchase uninsured
motorist coverage which will pay, for each
accident, at least the following amounts:
. $15,000 for any one person's injuries;
. $30,000 when more than one person is injured;
. $5,000 for property damage.
....
You can buy higher uninsured/underinsured
motorist coverage limits, but only as high as
the liability coverages you have purchased.
Most companies sell up to $250,000/$500,000/
$100,000 coverage or a combined single limit
of $500,000.
N.J.S.A. 17:28-1.1(a) requires each auto liability policy to insure against uninsured motorists (or hit and run drivers) to at least the extent of $15,000/$30,000/$5,000. Underinsured
coverage is not mandated, but N.J.S.A. 17:28-1.1(b) requires all
auto insurers to provide UM and UIM coverage, "as an option," up to
at least $250,000/$500,000/$100,000, "except that the limits for
uninsured and underinsured motorist coverage shall not exceed the
insured's motor vehicle liability policy limits for bodily injury
and property damage, respectively." Rates for UM and UIM coverage
for the same limits are to be uniform statewide. N.J.S.A. 17:28-1.1(d) provides that UM is subject to the policy terms including
"nonduplication of coverage." N.J.S.A. 17:28-1.1(e) includes in
the definition of UIM that UIM shall not apply to an uninsured
motor vehicle, and in the definition of UM that UM shall not apply
to an underinsured motor vehicle.
The coverage descriptions in N.J.S.A. 17:28-1.1, in the
Buyer's Guide and in the Harleysville policy each deal with the
total indemnification to be expected if the insured is harmed in an
accident with other drivers having less coverage than the insured.
UM is the worst case scenario -- it involves a tortfeasor whose
coverage is 100" less than the insured's policy limit. The UM/UIM
policy limits are calculated from the personal injury and property
damage coverage selected by the insured. The risk, for which the
premium is assessed, is that the insured will be damaged by a
tortfeasor or tortfeasors with less coverage than the insured chose
to protect his or her own liability.
We view this dispute as a pure question of contractual
interpretation.
Our function in construing these policies of
insurance, as with any other contract, is to
search broadly for the probable common intent
of the parties in an effort to find a
reasonable meaning in keeping with the
express general purposes of the policies. ...
In this pursuit, we cannot emphasize too
strongly that when an insurance policy is
clear and unambiguous ... the court is bound
to enforce the policy as it is written. It is
not the function of the court to make a better
contract for the parties than they themselves
have seen fit to enter into or to alter it for
the benefit of one party and to the detriment
of the other.
[Royal Ins. Co. v. Rutgers Cas. Ins. Co.,
271 N.J. Super. 409, 416 (App. Div.
1994)(citations omitted).]
Therefore, consideration of the entire Harleysville insurance
policy, as well as the Buyer's Guide and the statute, leads us to
conclude the parties intended the insured electing UM/UIM coverage
be indemnified for all property damage and bodily injury up to
$75,000 for any one accident. While the Harleysville policy
protects against injury and damage caused by either an uninsured or
underinsured driver, or both, the cumulative limit of that
protection is $75,000.
In Downy v. City of Elizabeth,
273 N.J. Super. 335, 337
(App. Div. 1994), we noted that while an insured may obtain UM/UIM
coverage up to $250,000/$500,000, it is subject to the stipulation
that the UM and UIM coverage opted for not exceed the insured's
liability limits. Holding that UIM coverage is not mandated for
a municipal self-insurer, we "recognize[d] that UIM coverage is
grounded in considerations of fundamental fairness" and "[t]here is
surely an essential justice in affording motorists the opportunity
to purchase for themselves the same amount of protection they
purchase for others." But justice is not done by requiring an
insurance company to provide double the amount the motorist
purchased for herself.
The trial judge based her decision on Coniglario v.
Hanover Ins. Co.,
233 N.J. Super. 627 (Law Div. 1989). Insofar as
Coniglario determined that an insured was eligible to recover both
UM and UIM claims when injured in an accident involving both an
uninsured and an underinsured vehicle, we agree. However, to the
extent that Coniglario implies that the total UM and UIM benefits
can exceed the overall limitation of liability stated in the
policy, we overrule that decision. Whenever there are two or more
tortfeasors with a Harleysville type policy, it would be anomalous
to allow a claimant to recover $150,000 from a combination of
uninsured and underinsured tortfeasors while limiting recovery to
$75,000 if all the tortfeasors happened to be uninsured or all were
underinsured. Neither the contracting parties nor the Legislature
could have intended such a result.
The clear intention of the Harleysville limits of
liability is that no more than $75,000 will be paid for injuries
inflicted by the insured to others, and no more than $75,000 will
be paid to the insured as indemnification for damages caused by a
tortfeasor arising out of any one accident. Therefore the
declaratory judgment should have been entered limiting defendants'
liability to no more than $75,000.
The parties raise another point which the judge
considered and decided but did not include in the order granting
summary judgment. Defendant sought a setoff of all payments made
for personal injury protection (PIP) coverage, and plaintiff
countered that any setoff should be limited to UM and UIM claims
for PIP elements, such as medical expenses, to simply prevent
double recovery. At the conclusion of the argument, the judge
expressed an opinion that to a certain extent, a setoff would not
be allowed. This determination is not part of the order appealed
herein and therefore we will not consider it, because appeals are
taken from judgments and not from opinions. See Hughes v. Eisner,
8 N.J. 228, 229 (1951).
Reversed.