holding "an insured's A-0842-20 17 reasonable expectations only matter when the court finds the relevant language ambiguous"
How later courts described this case
- holding "an insured's A-0842-20 17 reasonable expectations only matter when the court finds the relevant language ambiguous"
Written by the judges who cited it.
The opinion
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0842-20
ARTHUR J. BROWN, NANCY G.
LOVERING, Administratrix of the
Estate of WILLIAM LOVERING,
deceased, and as Administratrix Ad
Prosequendum for the Heirs at Law
of WILLIAM LOVERING, and
LINDA ROLICK, Administratrix
of the Estate of JOHN ROLICK,
deceased, and as Administratrix Ad
Prosequendum for the Heirs at Law
of JOHN ROLICK,
Plaintiffs-Appellants,
v.
NEW JERSEY
MANUFACTURERS INSURANCE
COMPANY and GOVERNMENT
EMPLOYEES INSURANCE
COMPANY,
Defendants-Respondents,
and
RIDER INSURANCE,
Defendant.
_______________________________
Argued February 14, 2022 – Decided March 8, 2022
Before Judges Mayer and Natali.
On appeal from the Superior Court of New Jersey, Law
Division, Monmouth County, Docket No. L-2156-18.
Jerry Friedman argued the cause for appellants.
Daniel J. Pomeroy argued the cause for respondent New
Jersey Manufacturers Insurance Company (Pomeroy,
Heller, Ley, DiGasbarro & Noonan, LLC, attorneys;
Daniel J. Pomeroy and Karen E. Heller, on the brief).
Darren C. Kayal argued the cause for respondent
GEICO Indemnity Company (Rudolph & Kayal, PA,
attorneys; Darren C. Kayal, on the brief).
PER CURIAM
This appeal arises from three separate accidents. The accidents involving
plaintiffs William Lovering and John Rolick resulted in their death. The claims
on behalf of Lovering and Rolick were filed by the administrators of their
estates. The third accident involved plaintiff Arthur J. Brown, who survived his
injuries.
Lovering is the only plaintiff with claims against defendant Government
Employees Insurance Company a/k/a GEICO Indemnity Company (GEICO).
Lovering appeals from a July 15, 2019 order partially dismissing his claims
A-0842-20
2
against GEICO. Lovering also appeals from an August 30, 2019 reconsideration
order dismissing his claims against GEICO in their entirety.
All three plaintiffs, Lovering, Rolick, and Brown, have claims against
defendant New Jersey Manufacturers Insurance Company (NJM). Lovering,
Rolick, and Brown appeal from October 14, 2020 orders granting summary
judgment in favor of NJM and denying their motion for summary judgment. We
affirm all orders on appeal.
Plaintiffs were involved in accidents while riding their motorcycles. Each
plaintiff procured insurance for his motorcycle. Each plaintiff obtained a
separate insurance policy for his personal automobiles. Plaintiffs sought to
recover underinsured motorist benefits (UIM) or uninsured motorist benefits
(UM) under their automobile insurance policies for injuries suffered in the
motorcycle accidents despite exclusions contained in their automobile insurance
policies.
We provide a summary of the facts and policy language relevant to the
claims asserted by Brown, Lovering, and Rolick.
A-0842-20
3
Brown
On June 20, 2016, Brown suffered injuries after colliding with a phantom
vehicle while riding his motorcycle. Brown sought UM coverage for his injuries
under his NJM automobile policy.
Brown's obtained separate motorcycle insurance coverage through Rider
Insurance (Rider). Under Rider's motorcycle policy, Brown elected UM/UIM
limits in the amount of $15,000 for each person and $30,000 for each accident.
Brown's NJM automobile policy contained a UM/UIM endorsement,
allowing recovery for personal injuries from operators of uninsured and
underinsured motor vehicles in the amount of $300,000. However, his NJM
policy contained an exclusion at Paragraph A.7 (A.7 exclusion) regarding
UM/UIM coverage.
NJM denied UM benefits to Brown citing the exclusion. The A.7
exclusion contained the following limitation on UM/UIM coverage:
A. We do not provide coverage under this endorsement
for property damages or bodily injury sustained by any
insured:
....
7. While occupying any vehicle insured by another
motor vehicle policy in which you or a family member
are a named insured.
A-0842-20
4
However, this exclusion ("A.7") does not affect
UM/UIM coverage for minimum limits required by
New Jersey law for liability coverage as set forth in
N.J.S.A. 39:6A-3.
In a July 20, 2011 cover letter, NJM provided Brown with a two-page
document entitled "Summary of Important Changes to Your New Jersey
Personal Auto Policy" (Summary). The Summary expressly identified changes
pertaining to UM/UIM coverage. Each renewal of Brown's NJM policy after
2011 contained the A.7 exclusion.
Lovering
On November 10, 2013, while riding his motorcycle, Lovering suffered
injuries resulting from an accident involving another motorist, Anthony
Davoulas. Lovering died from his injuries. Davoulas had an automobile
insurance policy from USAA General Indemnity Company (USAA) with a
$15,000 per person coverage limit. USAA paid $15,000 to Lovering's estate in
settlement of the claims against Davoulas.
Lovering obtained separate motorcycle insurance coverage from Foremost
Insurance Company (Foremost). Under the Foremost motorcycle policy,
Lovering elected UM/UIM limits of $15,000 per person and $30,000 per
accident.
A-0842-20
5
On the date of the motorcycle accident, Lovering also had a personal
automobile insurance policy with GEICO. His GEICO automobile policy had a
UIM limit of $100,000 per person. GEICO denied UIM benefits to Lovering
under Section IV, Exclusion 5 (Exclusion 5) of its policy. Exclusion 5 stated:
Section IV does not apply:
5. To bodily injury sustained by an insured while
occupying a motor vehicle owned by an insured and not
described in the Declarations and not covered by the
Bodily Injury and Property Damage liability coverages
of this policy.
Lovering also sought UIM coverage under an NJM automobile policy
issued to his daughter, Rachel Prendeville. Prendeville was a resident member
of Lovering's household on the date of his accident. Prendeville's NJM
automobile policy contained a UM/UIM endorsement limiting recovery for
personal injuries to $100,000 per person. Her NJM policy also contained the
A.7 exclusion as well as a provision reducing UM/UIM limits for any UIM claim
on behalf of a "family member" of the named insured who was the named
insured on his or her own policy. NJM denied UIM benefits to Lovering relying
on these exclusions.
A-0842-20
6
Rolick
On April 12, 2017, Rolick, while riding his motorcycle, collided with a
car driven by Christian Merrill. Rolick died from injuries suffered in that
accident. Merrill had an automobile insurance policy issued by GEICO with a
$15,000 coverage limit. GEICO paid $15,000 to Rolick's estate in settlement of
the claims against Merrill.
Rolick had separate motorcycle insurance coverage from GEICO. Under
the GEICO motorcycle policy, Rolick elected a UM/UIM limit of $15,000 per
person and $30,000 per accident.
Rolick had a personal automobile insurance policy with NJM and sought
UIM coverage under that policy. Rolick's NJM policy had a UM/UIM limit of
$100,000 per accident. Rolick's policy contained the A.7 exclusion. However,
because Rolick renewed his NJM policy in 2017, the A.7 exclusion in his policy
differed slightly from the A.7 language in the Brown and Prendeville NJM
policies. In 2017, Rolick's NJM policy stated the A.7 exclusion did "not affect
the UM/UIM coverage up to the following coverage limits: $15,000 per
person/$30,000 per accident for bodily injury claims, and $5,000 for property
damage claims." NJM denied Rolick's claim for UIM benefits under the A.7
exclusion.
A-0842-20
7
In a March 3, 2011 cover letter, NJM provided the Summary to Rolick,
noting the limitation in UM/UIM coverage consistent with the statutory
minimums under N.J.S.A. 39:6A-3. While the specific dollar limits in the A.7
exclusion first appeared in 2017 renewal of Rolick's NJM automobile policy, he
did not receive a cover letter or Summary from NJM in 2017 regarding changes
to the policy.
NJM and GEICO denied plaintiffs' requests for UM/UIM coverage based
on the exclusions contained in their respective automobile policies. NJM denied
coverage because plaintiffs occupied a vehicle insured under a different policy
on the dates of the motorcycle accidents. GEICO denied coverage because its
insured, Lovering, occupied a motorcycle own by him but not described on the
declaration page of his GEICO automobile policy.
After being denied coverage by NJM and GEICO, plaintiffs filed a
complaint demanding UM/UIM coverage under their personal automobile
policies for damages resulting from the motorcycle accidents.
In lieu of filing an answer, GEICO filed a motion to dismiss Lovering's
claims. In a July 15, 2019 order, the motion judge partially granted GEICO's
motion. Relying on Katchen v. Government Emplyees Insurance Company, 457
N.J. Super. 600 (App. Div. 2019), dismissed on appeal, 241 N.J. 354 (2020), the
A-0842-20
8
judge dismissed Lovering's UIM claims against GEICO, finding Exclusion 5
enforceable because the exclusion was lawful and unambiguous.
However, the judge denied GEICO's request to dismiss Lovering's claims
in their entirety based on his argument GEICO failed to provide adequate notice
of a change in the policy's provisions. Because GEICO did not submit papers
in response to Lovering's argument on that issue, the judge concluded there were
unresolved fact issues and denied that part of GEICO's dismissal motion.
GEICO moved for reconsideration. In an August 30, 2019 order, the judge
reconsidered her prior decision and dismissed Lovering's remaining claims
against GEICO.
On reconsideration, Lovering conceded there were no material disputed
facts precluding the judge's review of the issue as a matter of law. However,
Lovering requested the judge grant the motion "without prejudice , to permit the
case to be revived if there should be a change in the law, specifically as to
Katchen v. [Gov't Emps. Ins. Co.], 457 N.J. Super. 600 (App. Div. 2019) due to
the present[] grant of certification by the New Jersey Supreme Court in that
matter."1 The judge declined Lovering's request, finding no "legal authority
1
On March 10, 2020, well after the motion judge granted GEICO's dismissal
motion, the New Jersey Supreme Court dismissed the Katchen appeal with
prejudice. See 241 N.J. 354 (2020).
A-0842-20
9
that would permit a motion for summary judgment to be granted without
prejudice . . . ."
Following the exchange of discovery, plaintiffs filed a motion for
summary judgment against NJM. NJM opposed the motion and filed a cross-
motion for summary judgment. On June 5, 2020, the judge heard counsel's
arguments and reserved decision.
In an October 14, 2020 order and attached twenty-five-page written
statement of reasons, the motion judge denied plaintiffs' motion and granted
NJM's cross-motion. The judge concluded there were no disputed facts
precluding consideration of the summary judgment motions.
The judge determined "exclusion A.7 as contained in the 2011 policy
amendment [was] clear and unambiguous." While the judge noted,
NJM could have in 2011 drafted the policy to
specifically state that, or define, the minimum legal
policy limits as $15,000/$30,000 as they did in the 2017
change – the court cannot say that as a matter of law
they were required to, or that the policy language used
in 2011, which did not contain the specific minimum
policy limit amounts, was unclear or ambiguous.
In rejected plaintiffs' arguments, the judge held "the word 'minimum' did
not need to be defined in the policy by providing the specific policy limits; the
purchaser is clearly warned that the policy excludes coverage, aside from
A-0842-20
10
providing the minimum in UM/UIM coverage allowed by law." Because the
judge found the language of the A.7 exclusion was clear and unambiguous, she
enforced the exclusion and held Lovering and Rolick were "not entitled to [UIM]
coverage under the terms of this exclusion." As to Brown's UM claim, the judge
held he was "entitled to coverage in the minimum amount required by law, which
is $15,000" and NJM "share[d] responsibility, on a pro rata basis, with the other
existing $15,000/$30,000 UIM policy."
The judge also rejected plaintiffs' claim that NJM failed to provide
adequate notice of the 2011 policy change incorporating the A.7 exclusion. The
judge held Brown and Rolick 2 received "the notice of important changes packet,
[which] included a two-page document entitled 'Summary of Important Changes'
. . . ." She noted the exclusions in the Summary were highlighted by use of a
slightly larger and bold font. Additionally, the judge found the NJM renewal
policies issued to Brown and Rolick were sent with a cover letter, stating:
Inside this packet is your renewal policy which includes
your ID cards, Declarations page, coverage information
and bill. Also enclosed is a Summary of Important
Changes, which outlines several new or revised policy
provisions being introduced with this renewal. Please
read it carefully.
2
Because the NJM policy relied upon by Lovering was issued to his daughter,
the judge found "no argument as to insufficient notice as to plaintiff Lovering."
A-0842-20
11
The judge noted the Summary received by Brown and Rolick stated the
following regarding UM/UIM coverage:
CLARIFICATIONS OF COVERAGE
....
2. We have clarified that the exclusions for recovery of
damages such as pain and suffering or inconvenience
resulting from a loss with an uninsured motor vehicle,
unless the injured party has a legal right to such
recovery under the No-Fault Law, also applies to an
underinsured motor vehicle.
RESTRICTIONS OF COVERAGE
1. We have added an exclusion which limits coverage
to the minimum liability limits required by New Jersey
Law for you or a family member while occupying any
vehicle insured under another motor vehicle policy in
which either you or the family member is a named
insured.
The judge determined NJM's Summary "was issued in a manner designed
to fit the language of Skeete [v. Dorvius, 368 N.J. Super. 311 (App. Div. 2004),
aff'd, 184 N.J. 5 (2005)] mandating that the insurer not simply bury changes in
a lengthy insurance policy, but rather advise the insured by way of a separate,
not-too-lengthy notice of policy changes." The judge concluded NJM's failure
to state the actual dollar limits in Summary "did not render the policy provision
unclear and ambiguous" and found no legal basis to support plaintiffs' claim the
A-0842-20
12
Summary "had to use the specific dollar amounts rather than the 'minimum
liability limits' language." She held neither "the manner in which the policy
holder was informed of the change, or the content of the notice of change, was
unclear or ambiguous."
Regarding the change in the 2017 policy language, the issue applied to
Rolick only because the accidents involving Brown and Lovering predated
NJM's inclusion of the dollar limits in the A.7 exclusion. The judge determined
a policyholder upon renewal of an NJM policy in 2017 would not receive notice
of a change because the insured would find the change by reading the actual
policy language. The judge concluded NJM's 2017 change to the A.7 exclusion
"was not a new restriction or reduction in coverage. Insertion by NJM of the
dollar figures for the minimum policy limits did not restrict or reduce coverage
available to the insured from that which was available under the 2011
amendment." Thus, she found "no notice of the change in policy language,
either in the declaration page, a Summary of Important Changes, or otherwise,
was required."
On appeal, plaintiffs raise two main arguments in support of their
contention the judge erred in denying their motion for summary judgment.
Plaintiffs argue the UM/UIM provisions in the NJM and GEICO policies were
A-0842-20
13
unlawful and ambiguous and thus unenforceable. They also claim NJM failed
to provide adequate notice of the A.7 exclusion. We disagree.
Because GEICO obtained a dismissal of plaintiffs' claims in lieu of filing
an answer and NJM obtained a summary judgment dismissal of plaintiffs'
claims, we cite the different standards of review for the various orders on appeal.
We review de novo a trial court's determination on a motion to dismiss
under Rule 4:6-2(e) for failure to state a claim upon which relief can be granted.
See Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, PC,
237 N.J. 91, 108 (2019). In considering a Rule 4:6-2(e) motion, the court
"examine[s] the legal sufficiency of the facts alleged on the face of the
complaint," Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746
(1989), limiting its review to "the pleadings themselves," Roa v. Roa, 200 N.J.
555, 562 (2010). "If the court considers evidence beyond the pleadings in a Rule
4:6-2(e) motion, that motion becomes a motion for summary judgment, and the
court applies the standard of Rule 4:46." Dimitrakopoulos, 237 N.J. at 107.
We review the trial court's grant or denial of a motion for summary
judgment de novo, applying the same legal standard as the trial court. Conley
v. Guerrero, 228 N.J. 339, 346 (2017). A motion for summary judgment must
be granted "if the pleadings, depositions, answers to interrogatories and
A-0842-20
14
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). The inquiry
focuses on whether the evidence presented, when viewed in the light most
favorable to the non-moving party, is "sufficient to permit a rational factfinder
to resolve the alleged disputed issue in favor of the non-moving party." Brill v.
Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); see also Rozenblit v.
Lyles, 245 N.J. 105, 121 (2021).
We begin with plaintiffs' argument the motion judge erred in dismissing
the claims against GEICO. Lovering contends Exclusion 5 is unlawful and
ambiguous because it conflicts with N.J.S.A. 17:28-1.1 by "excluding UM
coverage in the same provision in which it excludes UIM coverage." He further
argues Exclusion 5 conflicts with the insured's "reasonable expectation" to
receive UM/UIM coverage because the exclusion is not identified on the policy's
declaration page and UIM coverage "is linked to the injured person, not to the
covered vehicle." We are unpersuaded by Lovering's arguments.
Lovering's arguments were addressed and rejected in Katchen. His
counsel recognized our decision in Katchen was binding on the trial court
because he requested a without prejudice dismissal of the claims against GEICO
A-0842-20
15
pending the New Jersey Supreme Court's review of a petition for certification
filed in Katchen. Because the outcome in Katchen did not support his
arguments, Lovering relies on dicta in the dissenting opinion rather than the
majority's holding in that case. 3
Lovering is correct N.J.S.A. 17:28-1.1 requires UM coverage for New
Jersey drivers. However, Lovering's case involves a UIM claim. As we
concluded in Katchen, "[w]hether the clause is ambiguous as to the UM benefits
has no bearing on whether the clause is ambiguous in regard to UIM benefits."
Katchen, 457 N.J. Super. at 606.
In Katchen, we held the exact same language of Exclusion 5 clearly and
unambiguously "exclude[d] UIM coverage when an insured suffers injuries in a
'motor vehicle' owned by the insured but not covered by the policy." Id. at 606.
We explained, "[a]ny ordinary reasonable person understands a motorcycle is a
type of motor vehicle." Ibid. N.J.S.A. 39:1-1 defines a motor vehicle to include
"all vehicles propelled otherwise than by muscular power, excepting such
vehicles as run only upon rails or tracks and motorized bicycles." Under the
3
Dissenting opinions are not binding authority. See In re Civil Commitment of
W.X.C., 204 N.J. 179, 194-95 (2010).
A-0842-20
16
ordinary meaning as well as the statutory definition, a motorcycle is a motor
vehicle.
Exclusionary clauses are presumptively valid if they are "specific, plain,
clear, prominent and not contrary to public policy." Princeton Ins. Co. v.
Chunmuang, 151 N.J. 80, 95 (1997) (quoting Doto v. Russo, 140 N.J. 544, 559
(1995)). Courts "should not engage in a strained construction to support the
imposition of liability." Longobardi v. Chubb Ins. Co. of N.J., 121 N.J. 530,
537 (1990).
Here, Exclusion 5 limiting UIM coverage is plain, clear, and
unambiguous. There is no UIM coverage available to Lovering under GEICO's
policy because Lovering's motorcycle was not listed on the declaration page.
The only vehicle listed on the declaration page in the GEICO policy was
Lovering's personal automobile. Thus, damages suffered in Lovering's
motorcycle accident are excluded from coverage under GEICO's policy.
Because the language Exclusion 5 is clear and unambiguous, we need not
reach Lovering's argument that the exclusion violated his reasonable expectation
of coverage. See Katchen, 457 N.J. Super. at 607 (holding "an insured's
A-0842-20
17
reasonable expectations only matter when the court finds the relevant language
ambiguous").4
We next consider plaintiffs' contention the judge erred in granting
summary judgment to NJM because the UIM exclusion was unlawful and
ambiguous and NJM failed to provide adequate notice of the UIM exclusion.
We disagree.
When determining whether an insurance provision is ambiguous, we start
with the plain meaning of the contractual language. Oxford Realty Grp. Cedar
v. Travelers Excess & Surplus Lines Co., 229 N.J. 196, 207 (2017). If the
language is clear, "that is the end of the inquiry." Ibid. (quoting Chubb Custom
Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008)). In such a case,
a court should not "engage in a strained construction to support the imposition
of liability." Longobardi, 121 N.J. at 537. Absent an ambiguity, courts must
interpret insurance policies pursuant to the "plain, ordinary meaning" of the
words used. Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001). Where the
terms of an insurance policy "are clear, courts should interpret the policy as
written and avoid writing a better insurance policy than the one purchased."
4
We address Lovering's lack of adequate notice of the exclusion in our
discussion, supra, regarding the lack of adequate notice claims asserted by
Brown and Rolick.
A-0842-20
18
Villa v. Short, 195 N.J. 15, 23 (2008) (quoting President v. Jenkins, 180 N.J.
550, 562 (2004)).
The mere fact that litigants offer two conflicting interpretations of policy
language does not make policy language ambiguous. Fed. Ins. Co. v. Campbell
Soup Co., 381 N.J. Super. 190, 195 (App. Div. 2005). "A genuine ambiguity
arises only when 'the phrasing of the policy is so confusing that the average
policy holder cannot make out the boundaries of coverage.'" Ibid. (quoting
Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 247 (1979)).
Plaintiffs assert NJM's A.7 exclusion is ambiguous. Specifically,
plaintiffs argue the exclusion "utilizes confusing language and fails to advise
the policyholder to what limits the coverage steps-down." Plaintiffs contend the
exclusion is "insufficient to inform the insured as to the actual numerical amount
of the diminished UM/UIM coverage" and is beyond "the grasp" of the average
policyholder. According to plaintiffs, NJM could, and should, have employed
simpler language by including the dollar amounts in the A.7 exclusion as it did
in 2017.
Plaintiffs and NJM cite unpublished opinions in their merits briefs. As a
general proposition, we do not rely on unpublished Appellate Division decisions
because they are not binding and lack legal precedent. See R. 1:36-3. Moreover,
A-0842-20
19
we need not rely on the unpublished opinions cited by the parties because there
are published decisions supporting affirmance of the challenged orders.
We disagree with plaintiffs' assertion that the A.7 exclusion is ambiguous
because it cites N.J.S.A. 39:6A-3 rather than specific dollar amounts. Courts
will go beyond the "literal text" and interpret a policy according to the insured's
understanding where the text "appears overly technical or contains hidden
pitfalls," "cannot be understood without employing subtle or legalistic
distinctions," "is obscured by fine print," or "requires strenuous study to
comprehend." Zacarias, 168 N.J. at 601.
Here, an NJM policyholder should understand the boundaries of coverage
based on the clear and unambiguous language in the policy and the Summary.
The fact the policy references a statute does not render the policy overly
technical. N.J.S.A. 39:6A-3 provides the minimum coverage amounts required
under New Jersey law and should be understood by a policyholder. The A.7
exclusion is listed under a heading denoting a "limit of liability" such that an
average policyholder would have understood the exclusion if he or she read the
provision.
Moreover, NJM's A.7 exclusion contains no fine print and is clearly
labeled as an exclusion to UM/UIM coverage. The A.7 exclusion expressly
A-0842-20
20
provides there is no UM or UIM coverage for an insured who is injured while
occupying a vehicle insured under another insurance policy in which NJM's
named insured, the spouse of the named insured, or a family member is a named
insured. Nothing in A.7 exclusion requires strenuous study by the policyholder
to understand the meaning of the provision. Because nothing in the A.7
exclusion requires a policyholder to employ subtle or legalistic determinations,
plaintiffs should have understood the plain meaning of the policy and the
limitations on liability for UM/UIM claims.
We also disagree with plaintiffs' contention the term "minimum limits" in
the A.7 exclusion is ambiguous. Inclusion of the phrase "minimum limits" has
not been deemed ambiguous simply because the dollar amounts are not included.
See Morrison v. American Intern. Ins. Co. of Am., 381 N.J. Super. 532, 538
(App. Div. 2005). In Morrison, we stated the policy was not ambiguous because
the challenged provision "refers to a statute rather than to a specific monetary
amount" defining the minimum limits of coverage. Ibid. We held the policy
language did not create an ambiguity because "it simply and clearly states that
the insurer's liability as to any insured who is not a named insured or resident
family member is the minimum amount contained in the specifically identified
statute." Id. at 541. Prior to our decision in Morrison, our Supreme Court found
A-0842-20
21
a clause limiting coverage to the "amount by which the compulsory o r financial
responsibility law limits exceed the limit of [the customer's liability] insurance"
to be valid. Aubrey v. Harleysville Ins. Cos., 140 N.J. 397, 401 (1995),
As did the motion judge, we disagree NJM's 2017 change to the language
in the A.7 exclusion supports a conclusion the exclusion's prior language was
ambiguous. NJM merely took language from the statute and printed the
minimum dollar amounts from the statute in its policy. The additional language
to the A.7 exclusion in 2017 did not alter NJM's coverage limitation.
We also reject plaintiffs' claim the absence of the A.7 exclusion in NJM's
declaration page rendered NJM's policy unenforceable. In Zacarias, the Court
acknowledged the declaration page is the one section of an insurance policy an
insured is most likely to read. 168 N.J. at 603-04. While the Court encouraged
insurers to find a way to "incorporate as much information as may be reasonably
included in the declarations sheet," it did not create a per se rule that exclusions
must be reflected on the declaration page. Ibid. The Court recognized such "[a]
rule of construction forcing insurers to avoid all cross-referencing in policies
would require them to reprint the entire definition section on each page of the
policy." Id. at 603. The Court concluded adopting such a construction would
not result in insurance contracts that are easier to read and digest but would
A-0842-20
22
achieve the opposite result, rendering insurance contracts lengthier, and
generating policies that are more technical, cumbersome, and difficult to
understand. Ibid.
If NJM included every exclusion in its declaration page, NJM would be
required to reprint dozens of pages of policy language on the declaration page.
Reprinting all exclusions on the declaration page would be untenable and
counterproductive to providing insureds with a policy that is understandable,
clear, and unambiguous.
We next consider plaintiffs' argument that NJM failed to provide adequate
notice of the A.7 exclusion. Brown and Rolick claim NJM "failed to provide
adequate notice which fairly conveyed the initial addition of Exclusion A.7 with
the minimum limits language." Rolick also argues NJM failed to provide any
notice of its 2017 change to the A.7 exclusion by including the specific dollar
limits of the coverage. We disagree.
In Skeete v. Dorvius, 184 N.J. 5, 9 (2005), our Supreme Court reviewed
notice of a step-down provision similar to the A.7 exclusion in NJM's policy.5
5
A "step-down" provision is a clause in an insurance policy that "provides
different levels of coverage to different insureds based on their status or the
existence of other insurance." Seabridge v. Disc. Auto, Inc., 393 N.J. Super.
327, 330 (App. Div. 2007). The A.7 exclusion is a step-down provision.
A-0842-20
23
There, the Court declined to hold every change to an insurance policy must be
included on the declaration page. Ibid. Under the circumstances in Skeete, the
Court found the notice regarding the added step-down "insufficient because of
its presentation as part of an essentially undifferentiated passel of two hundred
documents." Ibid. The Court provided examples of notice to an insured that
would be acceptable, stating "had the insurer sent the cover letter with [a] three
page notice outlining the changes separately, thus giving the insured a chance to
digest the changes before drowning her in a sea of paper, the outcome might
well have been different." Ibid.
Here, NJM provided Brown and Rolick with adequate notice of the change
to their automobile policies. NJM sent Brown and Rolick a cover letter,
informing them, in bold letters, that one of the enclosed documents, entitled "a
Summary of Important Changes, . . . outlines new or revised policy provisions
introduced with this renewal." NJM further advised Brown and Rolick to
contact the company with "any questions or concerns about [their] coverage
. . . . " The Summary consisted of two pages and clearly and unambiguously
alerted plaintiffs to important changes to their insurance policy. It was
incumbent upon plaintiffs to read the policy upon receipt of the Summary
identifying important policy changes. We are satisfied NJM did exactly as the
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Skeete Court suggested to ensure policyholders received adequate notice of
important policy changes.
Brown and Rolick also claim they lacked adequate notice because the
word "minimum" does not appear in N.J.S.A. 39:6A-3. In addition, they argue
the statute does not include the terms "UM" or "UIM," and thus failed to provide
notice of NJM's changes in UM/UIM coverage. N.J.S.A. 39:6A-3 provides
every owner of an automobile registered or principally garaged in New Jersey
shall maintain insurance coverage
at least in: a. an amount or limit of $15,000.00,
exclusive of interest and costs, on account of injury to,
or death of, one person, in any one accident; and b. an
amount or limit, subject to such limit for any one person
so injured or killed, of $30,000.00, exclusive of interest
and costs, on account of injury to or death of, more than
one person, in any one accident; and c. an amount or
limit of $5,000.00, exclusive of interest and costs, for
damage to property in any one accident.
[N.J.S.A. 39:6A-3.]
We are satisfied the statute specifies the minimum, or "limit," of coverage
for automobile liability insurance for New Jersey drivers by using the term "at
least." No technical knowledge or legal research was required for an NJM
policyholder to identify the words "at least" meant the minimum insurance
coverage required under New Jersey law.
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Additionally, the Summary uses the same heading, "Part B – Uninsured
Motorists Coverage" as delineated in NJM's policy regarding the UM/UIM
exclusion. We discern no reason for the statute, N.J.S.A. 39:6A-3, to use the
terms UM/UIM because NJM defined those terms in its policy and clearly
limited a policyholder's UM/UIM recovery.
We also reject Rolick's separate claim NJM failed to provide adequate
notice of its 2017 amendment to the A.7 exclusion. Insurance companies are
required to provide notice of changes when offering renewal policies where
"there have been changes in the restrictions, conditions or limitations of the
policy." Bauman v. Royal Indem. Co., 36 N.J. 12, 25 (1961). In such cases, the
insurance company must "fairly call[] the insured's attention to a reduction in
the policy coverage." Id. at 23; see also Skeete, 184 N.J. at 9.
Here, Rolick's 2017 NJM policy renewal did not change the restrictions,
conditions, or limits of coverage. Rather, NJM merely reworded the A.7
exclusion to add the specific dollar amounts consistent with N.J.S.A. 39:6A-3.
NJM need not notify Rolick of any changes in 2017 because there was no change
in the coverage afforded.
After reviewing the record and governing case law, we are satisfied the
judge correctly concluded the exclusions in plaintiffs' insurance policies were
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clear and unambiguous and plaintiffs had adequate notice of the changes to their
insurance policies related to UM/UIM coverage.
To the extent we have not addressed plaintiffs' remaining arguments, we
find the arguments without sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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