(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).
[N.B., This is one of three related cases released by the Court today. The others are New Jersey Manufacturers v. Breen and Grant v. Amica Insurance Co.]
Argued January 6, 1998 -- Decided May 12, 1998
Stein, J., writing for a Unanimous Court.
On October 19, 1990, Kathleen Magnifico was seriously injured in an automobile accident in
Weehawken. She and her husband were passengers in a car driven by Grace DeNichilo. As DeNichilo made
a left turn at an insection, her car was struck by an auto driven by Frank Cameron, who had entered the
intersection against the signal of a traffic officer. Cameron was driving a car owned by Beverly Manning.
The Magnifico's were insured by Rutgers Casualty Insurance Company (Rutgers). DeNichilo was
insured by CSC Insurance. Manning had a State Farm Insurance policy with a liability limit of $25,000.
Magnifico settled with Manning for the limit of her policy ($25,000) and then sought additional “underinsured
motorist” (UIM) benefits from both Rutgers and CSC.
Because of an “other insurance”clause in its policy, Rutgers took the position that its coverage was
“excess” to that of CSC. The CSC policy had a similar clause, so CSC contended that the two carriers should
divide responsibility for any award on a pro rata basis.
In August 1994, Magnifico filed a declaratory judgment action. CSC stipulated that its policy was
primary with respect to Magnifico's UIM claims. After the trial court decided motions for summary judgment,
the Supreme Court decided a case called Aubrey v. Harleysville Insurance. In the light of that case, Rutgers and
CSC moved for reconsideration. The trial court rejected Rutgers' argument regarding the “stacking” of the
policies and also rejected CSC's argument that Aubrey restricted Magnifico to collecting from Rutgers.
On appeal, the Appellate Division rejected Magnifico's attempt to hold CSC to its stipulation, agreed
with Rutgers that Aubrey prevented Magnifico from collecting anything more than the $100,000 UIM limit she
selected, and rejected CSC's contention that Magnifico's recovery should come solely from Rutgers.
The Supreme Court granted the petitions for certification filed by all parties.
HELD: A party seeking underinsured motorist's benefits is not limited to the coverage from her own policy
when another policy to which she has access provides a higher limit of coverage. The anti-stacking statute
(N.J.S.A. 17:28-1.1c), however, limits a claimant's UIM recovery to the highest limit available under any one
of the policies available to that claimant, irrespective of whether any available policy is primary or excess.
1. Under the clear and unambiguous language of the CSC insurance policy, the Magnifico's, as passengers in
the DeNichilo's car, had access to that policy's UIM coverage. The Court overrules two Appellate Division
decisions (Frankel and Calabrese) that were inconsistent with this determination. (pp. 8-12)
2. Applying the plain language of the “other insurance” clause in the Rutgers policy, the Appellate Division
correctly concluded that the CSC policy provided primary coverage and the Rutgers policy only excess coverage.
(pp. 12-13)
3. Reference to the plain and unambiguous language of the CSC policy leads the Court conclude that the
Appellate Division erroneously limited Magnifico's UIM coverage to the $100,000 limit in her Rutgers policy
rather than the $250,000 limit available under the CSC policy. That Magnifico purchased only $100,000 of UIM
coverage on her personal policy does not affect her right to recover the higher limit of UIM coverage to which
she was expressly entitled under the CSC policy. (pp. 13-15)
4. Insurers can modify policy language in an effort to address issues of UIM coverage and liability. (pp.15-16)
5. Magnifico's claim that she should also have access to the UIM coverage under the Rutgers policy because
her damages are greater than the UIM coverage limit under the CSC policy fails in the face of the “anti-stacking” provision of N.J.S.A. 17:28-1.1c. The clear and unmistakable purpose of the anti-stacking provisions
relating to UIM coverage is to limit a claimant's UIM recovery to the highest coverage limit available under
any one of the policies available to that claimant, irrespective of whether any available policy is primary or excess.
Under the facts of this case, Rutgers has no liability either to Magnifico or to CSC. (pp. 16-22)
The judgment of the Appellate Division is AFFIRMED as MODIFIED.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, and
COLEMAN join in JUSTICE STEIN's opinion.
SUPREME COURT OF NEW JERSEY
A-61/62/
63 September Term 1997
KATHLEEN MAGNIFICO and CARL
MAGNIFICO,
Plaintiffs-Appellants
and Cross-Respondents,
v.
RUTGERS CASUALTY INSURANCE COMPANY,
COMPUTER SCIENCE CORPORATION d/b/a
CSC INSURANCE COMPANY as servicing
carrier for NEW JERSEY FULL
UNDERWRITERS INSURANCE ASSOCIATION
and THE JOINT UNDERWRITERS
ASSOCIATION,
Defendants-Respondents
and Cross-Appellants.
Argued January 6, 1998 -- Decided May 12, 1998
On certification to the Superior Court,
Appellate Division.
Roy H. Mossi argued the cause for appellants
and cross-respondents (Marcus & Levy,
attorneys).
Robert J. Maloof argued the cause for
respondents and cross-appellants CSC
Insurance Company as servicing carrier for
New Jersey Full Underwriters Insurance
Association and The Joint Underwriters
Association (Hein, Smith, Berezin, Maloof,
Davidson & Jacobs, attorneys; Mr. Maloof and
Carla H. Madnick, on the briefs).
Susan L. Moreinis argued the cause for
respondent and cross-appellant Rutgers
Casualty Insurance Company.
The opinion of the Court was delivered by
STEIN, J.
This appeal, together with New Jersey Manufacturers
Insurance Co. v. Breen, ___ N.J. ___ (1998), and Grant v. Amica
Mutual Insurance Co., ___ N.J. ___ (1998), also decided today,
requires that we resolve issues of underinsured motorist (UIM)
coverage under multiple insurance policies that were anticipated
by our decision in French v. New Jersey School Board Association
Insurance Group,
149 N.J. 478 (1997). Our acknowledgment in
French, id. at 481, that UIM insurance has been characterized as
both a "sleeping giant," Green v. Selective Ins. Co. of Am.,
144 N.J. 344, 349 (1996), and a "legal iceberg," Cynthia M. Craig &
Daniel J. Pomeroy, New Jersey Auto Insurance Law § 26.1 at 355
(1998), provides a context for the issues to be addressed. Our
objective is to reduce the complexity of UIM coverage issues to
manageable proportions by clarifying and simplifying the
applicable legal principles. In the process, we trust that over
time the reasonable expectations of both the insurers that write
that coverage and the insureds that purchase it generally can be
fulfilled.
Kathleen Magnifico sought UIM coverage after being injured
in an automobile accident while she was a passenger in a friend's
car. The host's insurance policy had a UIM limit of $250,000.
Magnifico's personal policy provided $100,000 of UIM coverage.
Both UIM limits exceeded the liability limit carried by the
tortfeasor. Magnifico seeks access to the sum of those two UIM
policies. In an unpublished opinion, the Appellate Division held
that the host policy provided primary UIM coverage and
Magnifico's personal policy provided excess coverage, but that
Magnifico's recovery of UIM benefits could not exceed the limit
of coverage in her own policy, reduced by the amount of her
recovery from the tortfeasor.
At the time of the accident, CSC Insurance Company (CSC), as servicing carrier for the New Jersey Full Underwriters Association and the Joint Underwriters Association, insured DeNichilo's car. That policy provided UIM coverage with a limit of $250,000. Magnifico's automobile policy was with Rutgers Casualty Insurance Company (Rutgers). The Rutgers policy provided UIM coverage with a limit of $100,000. Manning's State Farm Policy had a liability limit of $25,000.
Magnifico settled with Manning for the $25,000 limit of
Manning's liability policy. Magnifico then sought UIM benefits
from both CSC and Rutgers.
Rutgers responded that its coverage, according to the "other
insurance" provision in Magnifico's policy, would be excess to
that of CSC. The Rutgers "other insurance" clause states:
If there is other applicable similar
insurance we will pay only our share of the
loss. Our share is the proportion that our
limit of liability bears to the total of all
applicable limits. However, any insurance we
provide with respect to a vehicle you do not
own shall be excess over any other
collectible insurance.
DeNichilo's policy with CSC contained a nearly identical "other
insurance" provision. CSC contended that the two carriers should
therefore divide the payment of any arbitration award on a pro
rata basis.
In August 1994, Magnifico filed a declaratory judgment
action to determine the obligations of each insurer. Rutgers
cross-claimed and counterclaimed for a declaration that its UIM
coverage was excess. In April 1995, Magnifico moved for summary
judgment declaring CSC to be the primary insurer and the Rutgers
policy to be excess. Rutgers cross-moved for summary judgment.
It agreed that the CSC policy was primary, but argued that the
anti-stacking provision of N.J.S.A. 17:28-1.1c prevented
Magnifico from collecting anything beyond the $250,000 available
under the CSC policy.
Prior to oral argument on the summary judgment motions, and
prior to this Court's decision in Aubrey v. Harleysville
Insurance Cos.,
140 N.J. 397 (1995), CSC stipulated that its
policy was primary with respect to Magnifico's UIM claims. At
oral argument the trial court acknowledged that stipulation and
also denied Rutgers' cross-motion for summary judgment on its
anti-stacking argument. Inadvertently, the Law Division judge
never signed an order memorializing his rulings.
After this Court issued its decision in Aubrey Rutgers moved
for reconsideration, asking the court to consider the effect of
Aubrey and urging the court to revisit the anti-stacking
question. Rutgers argued that, based on Aubrey, Magnifico was
entitled to UIM recovery only up to the $100,000 UIM limit
established by her personal policy. Further, Rutgers contended
that Magnifico could recover the $100,000 only from CSC because
Aubrey did not disturb the "other insurance" provisions that made
CSC primary in Magnifico's case. Therefore, Rutgers argued,
Magnifico could collect nothing under the Rutgers policy because
the $100,000 limit she chose was less than the $250,000 cap on
the CSC policy.
CSC also moved for reconsideration based on an alternative
interpretation of Aubrey. CSC agreed with Rutgers' position that
Magnifico should be limited to the $100,000 limit she chose, but
it also read Aubrey to mean that Magnifico could collect only
from Rutgers because that was the insurer she chose.
The trial court reiterated its rejection of Rutgers' anti-stacking argument, and rejected CSC's position that Aubrey
restricted Magnifico to collecting from Rutgers. The court
agreed with Rutgers that Magnifico was entitled only to $75,000
in UIM benefits (the $100,000 limit she chose, less the $25,000
she received from Manning's insurer). Because Magnifico was not
entitled to more than the $250,000 limit on the CSC policy, the
court also agreed that the Rutgers excess policy was not exposed.
On appeal, Magnifico argued that CSC should be bound to its
stipulation that it was the primary carrier, and that the trial
court incorrectly interpreted Aubrey and unduly limited her
access to UIM coverage. CSC cross-appealed, arguing that the
trial court incorrectly held CSC liable to Magnifico as the
primary carrier. Rutgers conditionally cross-appealed on the
anti-stacking issue: if the Appellate Division were to hold that
Magnifico could collect more than $100,000, Rutgers sought
reversal of the ruling that it was to provide excess coverage.
The Appellate Division rejected Magnifico's attempt to hold
CSC to its stipulation, finding that CSC stipulated only that
its coverage was primary, not that the full $250,000 of UIM
benefits would be available to Magnifico. The panel agreed with
Rutgers' position that Aubrey prevented Magnifico from collecting
anything more than the $100,000 UIM limit that she selected,
reduced by the amount of her recovery from the tortfeasor.
Rejecting CSC's contention, the panel held that Magnifico's
recovery of UIM benefits would be from CSC rather than Rutgers,
reasoning that our decision in Aubrey did not affect the rule
that policy language should determine questions of priority
between two applicable policies.
We granted Magnifico's petition for certification as well as
the cross-petitions of CSC and Rutgers.
149 N.J. 407, 408
(1997).
Magnifico's petition and the cross-petitions assert
essentially the same positions advanced by the parties in the
Appellate Division. The principal legal issues before us are the
total amount of UIM coverage to which Magnifico is entitled,
whether the anti-stacking provision of N.J.S.A. 17:28-1.1c limits
that available coverage, and the respective liability of CSC and
Rutgers for payment of Magnifico's UIM benefits. Relevant but
distinctly collateral to those issues is Magnifico's contention
that CSC is estopped from challenging its stipulation before the
Law Division that its policy provides primary UIM coverage to
Magnifico. Magnifico's other collateral argument is that the Law
Division's May 25, 1995 rulings that the CSC policy was primary
and that both the CSC and Rutgers policies must contribute to the
payment of her UIM benefits were "final" rulings not subject to
reconsideration or modification.
In view of our ultimate disposition affirming the Appellate
Division's determination that the CSC policy is primary and the
Rutgers policy excess, infra at ___ (slip op. at 12-13), we are
satisfied that Magnifico's estoppel argument is moot and we
decline to address it.
We are unpersuaded by Magnifico's contention that the Law
Division's ruling on May 25, 1995, that Magnifico was entitled to
UIM benefits from both insurers was a "final ruling" not subject
to modification by the Law Division judge. We note that Rule
4:49-2 permits a party to move for reconsideration of an order if
the reconsideration motion is served "no later than 10 days after
service of the judgment or order upon all parties by the party
obtaining it." Magnifico contends that the Law Division judge's
failure to sign an order memorializing that ruling precludes
reconsideration, but the comment to Rule 4:49-2 states: "It is,
of course, only a signed order which triggers the running of the
time period. The failure of entry of an order permits either
party simply to renew the original application at anytime if not
otherwise time barred." Pressler, Current N.J. Court Rules,
comment on R. 4:49-2 (1998). We are fully in accord with the
Appellate Division's conclusion that the Law Division's ruling
remained subject to reconsideration and modification. See Hamm
v. City of Clifton,
229 N.J. Super. 423, 428 (App. Div. 1988).
We first address CSC's contention that despite the unambiguous language of its policy providing UIM benefits to occupants of the DeNichilo vehicle, Magnifico nevertheless may recover UIM benefits only under her personal policy with Rutgers. In support of that contention CSC relies on Frankel v. Motor Club
of America Insurance Co.,
298 N.J. Super. 250 (App. Div. 1996),
Calabrese v. Selective Insurance Co. of America,
297 N.J. Super. 423 (App. Div. 1997), and Aetna Casualty & Surety Co. v.
Prudential Property & Casualty Insurance Co.,
296 N.J. Super. 116
(App. Div. 1996). In Frankel, supra, the plaintiff was a
passenger in an automobile owned by Albert Di Battista and was
injured in a collision with another vehicle. 298 N.J. Super. at
251. She settled her claim against the tortfeasor for the
$15,000 limit of his liability policy, and sought UIM coverage
both from her own carrier and from Di Battista's carrier. Ibid.
Her insurer, Motor Club of America Insurance Company (Motor
Club), provided UIM coverage of $50,000 and Di Battista's
carrier, Harleysville Insurance Company (Harleysville), provided
$100,000 of UIM coverage. Ibid. The Law Division, applying its
interpretation of Aubrey, concluded that Frankel could recover
UIM benefits only from her own carrier. Ibid. Affirming the Law
Division, the Appellate Division acknowledged that Frankel was an
"occupant" of Di Battista's automobile and that under the literal
wording of Di Battista's policy its coverage was primary. Id. at
251-52. Nevertheless, the Appellate Division concluded that
Aubrey had the effect of limiting Frankel's recourse to UIM
coverage only to her personal liability policy, requiring Motor
Club but not Harleysville to provide her with coverage. Id. at
254.
In Calabrese, supra, Rosemary Rocchio was injured while
operating her daughter Marianne's motor vehicle. 297 N.J. Super.
at 427. After settling with the tortfeasor's carrier for the
policy limits, Rocchio sought UIM benefits under both her own
automobile policy as well as under the policy insuring her
daughter's vehicle. Id. at 427-28. Her husband, who asserted a
per quod claim, also sought recovery under both UIM policies.
Id. at 433. Citing this court's opinion in Aubrey, supra, the
Appellate Division panel questioned whether Aubrey would permit
the Rocchios to recover UIM benefits under their daughter's
policy:
While Mrs. Rocchio was, of course, occupying
the vehicle of Marianne, and appears to be
covered by the language of that policy, we
question whether recovery under that policy
is permitted under the holding of our Supreme
Court in Aubrey, supra, 140 N.J. at 403-05.
At the very least, Aubrey compels the
conclusion that Rosemary and Anthony
Rocchio's policy must be viewed as the
primary coverage.
In Aetna, supra, the UIM claimant was John Proffitt whose friend, an employee of One Stop Auto Center (One Stop), allowed Proffitt to drive a vehicle owned by One Stop in order to perform a personal favor for the employee. 296 N.J. Super. at 117-18. While driving the One Stop vehicle, Proffitt was injured in an accident with another vehicle whose insurer tendered the entire limits of its policy. Id. at 118. Proffitt then sought UIM coverage from both Aetna, One Stop's carrier, and Prudential Property and Casualty Company, Proffitt's own carrier. Ibid. The Appellate Division panel concluded that Proffitt could recover UIM benefits only from the Prudential policy, noting that
his use of the One Stop vehicle was "fleeting in time and purely
fortuitous," and that he was not a named insured under the Aetna
policy. Id. at 122. Applying Aubrey, the panel held that
"Proffitt's expectation of insurance coverage must be deemed to
be limited to the UIM coverage that he purchased from
Prudential." Ibid.
In French, supra, we explained that Aubrey has been
incorrectly understood to limit claimants only to the UIM
coverage provided by their personal automobile policies:
[W]e note the problem that Aubrey has
apparently been interpreted by some courts as
establishing the UIM policy purchased by the
injured person as not only the policy of
"comparison" (for the purpose of gauging
whether a UIM claim exists in the first
place) but also as the only UIM policy that
the injured person has resort to once that
threshold test is met. That is simply too
broad a reading. Indeed, other portions of
the statute and the standard uninsured/
underinsured motorist endorsement approved by
the Commissioner of Insurance plainly
envision one potentially being able to secure
benefits under more than one UIM endorsement.
[149 N.J. at 486.]
We acknowledged in French that the statutory reference to
"underinsured motorist coverage afforded under the motor vehicle
insurance policy held by the person seeking that recovery" in
N.J.S.A. 17:28-1.1e should be understood to "include a policy
provided for the claimant by an employer even if coverage under
the personal policy of the employee were not triggered." Id. at
489. Moreover, we emphasized that once a claimant satisfies the
threshold for UIM coverage
the statute contemplates that the insured is
free to pursue UIM benefits under other
policies under which he or she may be
insured--whether under his or her personal
policy, as the occupant of an employer's
vehicle, the permissive occupant of a motor
vehicle owned by any other insured person, or
as the resident in the household of a
relative possessing his or her own UIM
insurance. Each of those UIM policies is
opened up to the insured once the threshold
test is met.
[149 N.J. at 495 (emphasis added).]
Accordingly, we reject CSC's contention that Magnifico's UIM
recovery is restricted to the coverage provided by her Rutgers
policy. Consistent with French, the CSC policy, including its
UIM coverage, that insured occupants of DeNichilo's automobile,
was a policy "held" by Magnifico, a permissive occupant of
DeNichilo's automobile, and was available to provide her with UIM
coverage. Frankel, supra, 298 N.J. Super. at 254, and Calabrese,
supra, 297 N.J. Super. at 433, are overruled to the extent that
they are inconsistent with that conclusion.
In French, we also emphasized the significance of the clear
language of applicable insurance policies in resolving cases of
UIM coverage, 149 N.J. at 493-95, and noted that "[p]olicy
drafters have either anticipated or can anticipate most of the
recurring problems in this area." Id. at 494. The plain
language of the Rutgers "other insurance" clause states,
referring to Ms. Magnifico, that "any insurance we provide with
respect to a vehicle you do not own shall be excess over any
other collectible insurance." (Emphasis added.) Applying the
clear policy language, the Appellate Division correctly concluded
that the CSC policy provides primary coverage and the Rutgers
policy excess coverage. Former Presiding Judge Michels aptly
articulated the rationale for that holding in Royal Insurance Co.
v. Rutgers Casualty Insurance Co.,
271 N.J. Super. 409, 419-20
(App. Div. 1994):
[W]e recognize that underinsured motorist
coverage has been characterized by some
courts as being "personal to an insured"
. . . . However, this characterization
of underinsured motorist coverage cannot
overcome the clear and unambiguous language
of a policy and render the policy's "excess"
clause void and unenforceable. It is
fundamental that in the absence of a
statutory prohibition to the contrary, an
insurance company has a right to impose
whatever conditions it desires prior to
assuming its obligations, including providing
whether its policy shall be primary to or
excess over other collectible insurance, and
how it will contribute with such other
insurance. Such qualifying provisions should
be construed in a common sense and logical
fashion in accordance with the language used.
Thus, while the Rutgers underinsured motorist
coverage may be characterized as "personal"
coverage, it was not the primary coverage
under the circumstances of this case. Ms.
Davidson was operating a non-owned automobile
and therefore, by a straightforward
application of the terms of the policies, the
Rutgers policy was excess over the primary
coverage provided by the Royal policy.
Reference to the plain and unambiguous language of the CSC policy also leads us to conclude that the Appellate Division improperly limited Magnifico's UIM coverage to the $100,000 limit in her Rutgers policy rather than the $250,000 limit available
under the CSC policy. As we observed in French, supra, "no
public policy or statute prevents an insurance company from
providing greater coverage to an uninsured person than is
provided under the personal insurance of that insured." 149 N.J.
at 492. We note that an offer of the availability of UM/UIM
coverage, which may for some covered persons exceed the coverage
available under their personal policies, is required to be
included in the New Jersey Auto Insurance Buyers Guide (Guide),
the content of which is prescribed by the Commissioner of
Insurance pursuant to N.J.S.A. 39:6A-23. The Guide's description
of Uninsured/Underinsured Motorist Coverage reads as follows:
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. This coverage does not
benefit the uninsured driver. It will provide
benefits to you, your passengers or relatives
living with you if a motorist without insurance
is legally liable for injuries to these persons
or for damage to your car or its contents.
There are other motorists who have auto
insurance coverage but with very low limits.
When you buy uninsured motorist coverage
above the minimum limits required by law, 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.
Although the reference to coverage benefitting "your passengers
or relatives living with you" is contained in a paragraph
describing uninsured motorist coverage, a reasonable
interpretation of the Guide would suggest that those categories
of beneficiaries were also to receive the benefit of UIM coverage
purchased by the insured.
The CSC policy insuring DeNichilo's automobile, for which
DeNichilo paid premiums, provided $250,000 in UIM coverage and
that coverage expressly applied to passengers such as Magnifico.
Presumably, when CSC calculated the applicable premium it took
into account the relatively high UIM limit the policy provided
and that the UIM coverage also was available to authorized
occupants of the vehicle. That Magnifico purchased only $100,000
of UIM coverage under her personal policy does not affect her
right to recover the higher limit of UIM coverage to which she
was expressly entitled under the CSC policy. That conclusion is
reinforced by French's reinterpretation of the statutory phrase
"the policy held by the person seeking . . . recovery" to refer
to "the UIM policy actually purchased by or purchased for the
benefit of the prospective UIM claimant." French, supra, 149
N.J. at 485.
We also observe, as we did in French, supra, 149 N.J. at
494, that insurers can modify policy language in an effort to
address issues of UIM coverage and liability. The standard form
of the 1996 insurance agreement on file with the Department of
Insurance provides that if an insured is not a named insured
under the policy in question but is a named insured under her own
policy, then the limit of liability under the subject policy will
not exceed the highest applicable limit of liability coverage
under the named insured's policy. If included in the CSC policy,
that language apparently would limit Magnifico's recovery under
that policy to the amount of UIM coverage provided by the Rutgers
policy.
We next address Magnifico's contention that because her
damages exceed the available UIM coverage under the CSC policy,
she also is entitled to recover any additional damages from her
personal policy issued by Rutgers. In framing the issue,
Magnifico asserts that no question of policy "stacking" is
implicated because the "other insurance" provision of the Rutgers
policy establishes that that policy provides only excess coverage
over CSC's primary coverage. Magnifico's argument implies that
the anti-stacking provision of N.J.S.A. 17:28-1.1c does not
preclude an insured from obtaining increased coverage by
resorting to an available excess policy if the primary policy
coverage is inadequate. We note that claimants in out-of-state
cases have unsuccessfully advanced essentially the same
contention in an effort to avoid the application of anti-stacking
language contained in the UIM coverage provisions of automobile
liability policies. See Hammer v. State Farm Mut. Auto. Ins.
Co.,
950 F. Supp. 192, 194-95 (W.D. Ky. 1996); Federated Am.
Ins. Co. v. Erickson,
838 P.2d 693, 694-95 (Wash. Ct. App. 1992);
Doyle v. State Farm Ins. Co.,
811 P.2d 968, 970-71 (Wash. Ct.
App.), review denied,
822 P.2d 288 (Wash. 1991).
Analytically, Magnifico's contention is not inconsistent
with the reasoning underlying this Court's invalidation of an
uninsured motorist "excess-escape" clause in Motor Club of
America Insurance Co. v. Phillips,
66 N.J. 277 (1974). There,
the claimant sustained injuries as a passenger in a vehicle that
collided with an uninsured automobile. Id. at 280. After
collecting the $10,000 policy limit under the host vehicle's
uninsured motorist endorsement, he sought access to the $10,000
uninsured motorist coverage under his personal policy issued by
Motor Club of America Insurance Company (Motor Club). Id. at
281. The Motor Club policy contained a standard "excess-escape"
clause:
With respect to bodily injury to an
insured while occupying a highway vehicle not
owned by the named insured, this insurance
shall apply only as excess insurance over any
other similar insurance available to such
insured and applicable to such vehicle as
primary insurance and this insurance shall
then apply only in the amount by which the
limit of liability for this coverage exceeds
the applicable limit of liability of such
other insurance.
Because the UM coverage under the Motor Club and the host vehicle policies were identical, the "excess-escape" clause barred recovery under the Motor Club policy. Ibid. We invalidated the excess-escape clause on the ground that it was inconsistent with the legislative mandate that required every automobile insurance
policy to provide coverage for payment of damages for bodily
injuries sustained in an accident caused by uninsured motorists,
noting that the Legislature had not seen fit to limit to only one
policy the recourse of an injured claimant for whom UM coverage
was available from more than one policy. Id. at 292. We also
noted that enforcement of the "excess-escape" clause would
eliminate the availability of UM coverage paid for by the insured
merely because equivalent coverage was also available from
another policy. Id. at 292-93.
Nevertheless, apparently in response to Motor Club and Lundy
v. Aetna Casualty & Surety Co.,
92 N.J. 550, 560 (1983), in which
we held that an insured under a single automobile policy covering
several vehicles can recover under each car's UM coverage, the
Legislature amended N.J.S.A. 17:28-1.1, L. 1983, c. 362, to add a
specific anti-stacking provision applicable to both UM and UIM
coverage:
c. Uninsured and underinsured motorist
coverage provided for in this section shall
not be increased by stacking the limits of
coverage of multiple motor vehicles covered
under the same policy of insurance nor shall
these coverages be increased by stacking the
limits of coverage of multiple policies
available to the insured. If the insured had
uninsured motorist coverage available under
more than one policy, any recovery shall not
exceed the higher of the applicable limits of
the respective coverages and the recovery
shall be prorated between the applicable
coverages as the limits of each coverage bear
to the total of the limits.See footnote 1
Our case law generally has acknowledged that "the 'anti-stacking' amendment to N.J.S.A. 17:28-1.1 effectively overruled Motor Club." French, supra, 149 N.J. at 491; Christy v. City of Newark, 102 N.J. 598, 611 (1986); Mondelli v. State Farm Mut. Auto. Ins. Co., 102 N.J. 167, 173 (1986).
The cases construing the anti-stacking amendment primarily have concerned uninsured motorist coverage, and have focused on the extent to which personal policies providing that coverage may be required to supplement an insured's recovery under the host automobile's UM coverage if the aggregate recovery is less than the maximum coverage under any available policy. See Ransom v. Cigna Ins. Co., 300 N.J. Super. 444, 449-54 (App. Div. 1997); Schaser v. State Farm Ins. Co., 255 N.J. Super. 169, 173-77 (Law Div. 1992), aff'd o.b., 267 N.J. Super. 510 (App. Div. 1993); Cuevas v. Allstate Ins. Co., 234 N.J. Super. 461, 464-65 (Law Div. 1988). We entertain no doubt, however, that the first sentence of the anti-stacking amendment unambiguously resolves the issue of the availability of Magnifico's Rutgers UIM coverage. The statute states clearly that "underinsured motorist coverage . . . shall not be increased . . . by stacking the limits of coverage of multiple policies available to the insured," N.J.S.A. 17:28-1.1c, and recognizes no exception if one of the multiple policies available to the insured provides excess
rather than primary coverage. In our view, the clear and
unmistakable purpose of the anti-stacking amendment's provisions
relating to UIM coverage is to limit a claimant's UIM recovery to
the highest coverage limit available under any one of the
policies available to that claimant, irrespective of whether any
available policy is primary or excess.
Although Magnifico contends that that interpretation of the
anti-stacking amendment renders worthless her Rutgers UIM
coverage for purposes of this occurrence, we note that in various
other circumstances her personal UIM coverage could provide
substantial benefits. For example, if the host car's UIM
coverage had been $50,000 rather than $250,000, Magnifico's
recovery under the host policy would have been $25,000 ($50,000
less the $25,000 recovered from the tortfeasor's insurer), and
her Rutgers policy would be required to pay the remaining
$50,000. Similarly, if the host car's UIM coverage were less
than the tortfeasor's liability coverage, the host car's policy
would provide no UIM benefit; the Rutgers policy would be
primary, not excess, and would pay the $100,000 policy limit less
the $25,000 paid by the tortfeasor's insurer. Those examples
demonstrate that the unavailability of Magnifico's personal UIM
coverage in this circumstance, because of the plain language of
the anti-stacking amendment, does not imply that that coverage
would be unavailable under different conditions.
Our conclusion that the anti-stacking amendment bars
Magnifico's access to recovery under the UIM coverage afforded by
her Rutgers policy is consistent with the Appellate Division's
recent decision in Granger v. Ohio Casualty Insurance Co.,
306 N.J. Super. 469 (1997). In Granger, the plaintiff was driving an
automobile owned by his employer and sustained injuries in a
collision caused by another vehicle. Id. at 472. The plaintiff
settled his claim with the tortfeasor who carried $20,000 in
liability coverage. Ibid. He then sought UIM coverage from his
employer's carrier, Ohio Casualty Insurance Company (Ohio), which
provided $500,000 in UIM coverage, as well as from Liberty Mutual
Insurance Group (Liberty), his personal carrier under a policy
that provided $100,000 in UIM coverage. Arbitrators awarded the
plaintiff $600,000 in damages, but did not determine the
allocation of responsibility between Ohio and Liberty. Ibid.
The "other insurance" clause in the Liberty policy was identical
to the "other insurance" clause in Magnifico's Rutgers policy,
providing that the Liberty policy was "excess" if the injury
occurred in a vehicle not owned by the plaintiff. Reversing the
trial court's determination that the plaintiff could have access
to both policies, the Appellate Division held that under the
anti-stacking amendment the plaintiff's recovery could not
"exceed the amount of the highest UIM coverage available to him."
Id. at 474. The court added that "[t]o hold otherwise would be
to render the anti-stacking provision meaningless in these
circumstances." Ibid.
We note that the language of the "other insurance" clause
in Magnifico's personal policy could more precisely incorporate
the express provisions of the anti-stacking statute to emphasize
the unavailability of that policy when a host automobile's higher
UIM policy limit has provided benefits to the insured that exceed
the UIM limits under her personal policy. Finally, in view of
our determination that the Rutgers policy provides only excess
coverage, and that plaintiff's UIM recovery is limited to the
$250,000 in coverage provided by the CSC policy reduced by the
recovery from the tortfeasor's insurer, Rutgers has no liability
either to Magnifico or to CSC. See Royal Ins. Co., supra, 271
N.J. Super. at 416-20.
We modify the judgment of the Appellate Division to
recognize the availability to Magnifico of the $250,000 of UIM
coverage provided by the CSC policy, reduced by the $25,000
recovery from the tortfeasor's insurer. As modified, we affirm
the judgment of the Appellate Division.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN,
GARIBALDI, and COLEMAN join in JUSTICE STEIN's opinion.
NO. A-61/62/63 SEPTEMBER TERM 1997
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
KATHLEEN MAGNIFICO and CARL MAGNIFICO,
Plaintiffs-Appellants
and Cross-Respondents,
v.
RUTGERS CASUALTY INSURANCE COMPANY, COMPUTER SCIENCE
CORPORATION d/b/a CSC INSURANCE COMPANY as servicing carrier
for NEW JERSEY FULL UNDERWRITERS INSURANCE ASSOCIATION
and THE JOINT UNDERWRITERS ASSOCIATION,
Defendants-Respondents
and Cross-Appellants.
DECIDED May 12, 1998
Chief Justice Poritz PRESIDING
OPINION BY Justice Stein
CONCURRING OPINION BY
DISSENTING OPINION BY
Footnote: 1 We note that in French we inaccurately characterized N.J.S.A. 17:28-1.1c as requiring proration of applicable coverages in cases where a claimant has more than one policy
available to him or her. 149 N.J. at 495. That provision mandates proration only when multiple UM coverages are available to the claimant.