PARKER v. USAA CASUALTY INSURANCE COMPANY et al
Filing
34
OPINION. Signed by Judge Renee Marie Bumb on 5/31/2018. (tf, )
[Dkt No. 25, 27]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
ALVIN PARKER,
Plaintiff,
Civil No. 17 – 3214
v.
OPINION
USAA CASUALTY INSURANCE
COMPANY, GOVERNMENT EMPLOYEES
INSURANCE COMPANY a/k/a GEICO
and ABC CORPS(S)(1-100),
Defendants.
APPERANCES:
By:
Teresa Gerlock Hanni, Esq.
Michael Glassman & Associates LLC
Laurel Wood Corporate Center
1103 Laurel Oak Road, Suite 140
Voorhees, New Jersey, 08043
Counsel for Plaintiff
Lindsay L. Andreuzzi, Esq.
Marni Sabrina Berger, Esq.
Post & Schnell PC
Four Penn Center, 13th Floor
1600 JFK Boulevard
Philadelphia, Pennsylvania 19103
Counsel for Defendant USAA Casualty Insurance
Company
Colleen M. Ready, Esq.
Margolis Edelstein
100 Century Parkway
Suite 200
Mount Laurel, New Jersey, 08054
Counsel for Defendant Government Employees
Insurance Company
BUMB, UNITED STATES DISTRICT JUDGE:
This matter comes before the Court upon cross motions for
partial summary judgment filed by co-defendants USAA Casualty
Insurance Company (“USAA”) and Government Employees Insurance
Company (“GEICO”) concerning the allocation of underinsured
motorist coverage (“UIM”) between themselves.
For the reasons
set forth below, the Court will grant GEICO’s motion and deny
USAA’s cross motion. 1
I.
Facts and Procedural History
The instant dispute involves only legal questions
concerning the application and interpretation of the GEICO
insurance policy at issue.
For the purposes of the pending
cross motions, the following facts are undisputed.
Plaintiff Alvin Parker Jr. was injured in an auto accident
on October 20, 2013.
Parker Jr. was driving his mother’s
vehicle when another driver crashed into him.
At the relevant
time, Parker Jr.’s mother had automobile insurance coverage with
Defendant GEICO, and Parker Jr. had automobile insurance
coverage with Defendant USAA.
It is undisputed that under the
terms of the insurance policies, GEICO is the primary insurer,
and USAA is the excess insurer with regard to the accident at
issue.
1
The Court exercises diversity of citizenship subject matter
jurisdiction pursuant to 28 U.S.C. § 1332.
1
The other driver was determined to be at fault, and his
insurance company settled with Parker Jr. for $100,000, which
was the limit of the other driver’s policy.
It is undisputed
that the other driver is an underinsured motorist for the
purposes of this suit.
The GEICO policy provides UIM coverage up to $100,000.
Plaintiff’s USAA policy provides UIM coverage up to $300,000.
This suit was removed to this Court on the basis of
diversity of citizenship on May 5, 2017.
The Complaint asserts
four counts: (1) breach of contract / claim for UIM benefits and
(2) bad faith denial of insurance benefits against USAA; and (3)
breach of contract / claim for UIM benefits and (4) bad faith
denial of insurance benefits against GEICO.
The bad faith counts-- Counts 2 and 4-- were dismissed
without prejudice on May 24, 2017.
GEICO presently moves for summary judgment on the breach of
contract claim against it; and USAA cross moves for summary
judgment on the same claim.
Plaintiff Parker Jr. has filed no
papers in response to either motion.
The parties do not dispute
that Parker Jr. is owed $200,000.00 (in addition to the $100,000
he received from the underinsured motorist’s insurer), and so
the Court presumes that Parker Jr. takes no position as to how
GEICO and USAA allocate between themselves payment of the
$200,000.00.
2
II.
Summary Judgment Standard
Summary judgment shall be granted if “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a).
For the purposes of the instant motions, there are no
disputed material facts.
Therefore, the only question before
the Court on these cross motions for summary judgment is whether
either GEICO or USAA is entitled to judgment as a matter of law.
III. Analysis
GEICO moves for summary judgment arguing that it is
obligated to pay Parker Jr. nothing, because, it asserts, under
the terms of the GEICO policy, GEICO is entitled to a $100,000
credit (i.e., a credit up to the limits of the GEICO policy)
because the underinsured motorist’s insurer paid Parker Jr.
$100,000.
USAA argues, however, that the relevant portions of
the GEICO policy require “pro rata sharing [between GEICO and
USAA] of UIM obligations.”
(Opposition / Moving Brief, Dkt No.
27-2, p. 8)
The relevant portions of the GEICO policy provide:
3
(GEICO’s Ex. D, Dkt No. 25-7) 2
GEICO, in support of its argument that it is entitled to a
credit against its coverage, relies on the policy language which
states, “[t]he amount payable under this coverage will be
reduced by all amounts (a) paid by or for all persons or
organizations liable for the injury.”
According to GEICO,
“[i]nasmuch as the [underinsured motorist’s] liability limits
were $100,000, and the plaintiff received that amount from the
[underinsured motorist’s] carrier, GEICO is entitled to a credit
of $100,000 as against its UIM coverage limits of $100,000,
which means that there is zero UIM coverage available to the
2
GEICO’s policy is consistent with New Jersey law which
provides that “[t]he limits of underinsured motorist coverage
available to an injured person shall be reduced by the amount he
has recovered under all bodily injury liability insurance or
bonds[.]” N.J.S.A. 17:28-1.1(e).
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plaintiff under the GEICO policy.”
(Moving Brief, Dkt No. 25-3,
p. 4)
In opposition, USAA argues that the provision GEICO relies
upon, when read in context, does not apply to this case.
According to USAA, that subsection “is limited to the factual
scenario where there are two or more vehicles insured under the
GEICO policy and potential intra-policy stacking is at issue.”
(Opposition / Moving Brief, Dkt No. 27-2, p. 4)
The applicable
provision of the policy, USAA asserts, is the earlier appearing
provision which states, “[i]f the insured has other insurance
against a loss covered by the Uninsured Motorists provisions of
this policy, we will not be liable for more than our pro rata
share of the total coverage available.” 3
In reply, GEICO disagrees with USAA’s assertion that
coverage reduction only occurs when two or more vehicles are
insured under the same GEICO policy.
GEICO observes that the
entire paragraph addresses more than just intra-policy stacking;
it also addresses stacking of separate policies, and in both
situations the policy states that stacking is not allowed-i.e., an insured cannot increase the coverage available under
3
USAA alternatively argues that, because GEICO and USAA dispute
the applicable provisions, the policy must be ambiguous.
(Opposition / Moving Brief, Dkt No. 27-2, p. 12) As explained
infra, the provision USAA relies upon is clearly inapplicable
and therefore there is no ambiguity in the policy.
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the policy by any sort of stacking.
p. 2)
(Reply Brief, Dkt No. 28,
Thus, GEICO asserts, in similar fashion, coverage under
the GEICO policy is reduced by all amounts paid by or for all
persons liable for the injury.
According to GEICO, “this
coverage” means UIM coverage, not, as USAA asserts, coverage
when intra-policy stacking is at issue.
(Id.)
The fundamental flaw in USAA’s argument is that the clause
USAA relies upon refers to the Uninsured Motorist provisions of
the GEICO policy, whereas this case does not involve an
uninsured motorist, but rather an underinsured motorist.
is not an inconsequential distinction.
This
Both the GEICO policy
itself and New Jersey statute distinguish between uninsured
motorist coverage and underinsured motorist coverage.
Section IV of the GEICO policy-- the section in which the
above-excerpted provisions appear-- is entitled
“UNINSURED/UNDERINSURED MOTORISTS COVERAGE.”
23 of 45)
(Dkt No. 25-7, p.
Appearing immediately beneath this heading is the
“DEFINITIONS” section, which separately defines “underinsured
motor vehicle” and “uninsured motor vehicle.”
45)
(Id. at p. 24 of
Further removing all doubt that “underinsured” does not
mean “uninsured,” and vice versa, the definition of
“underinsured motor vehicle” expressly “does not include an
uninsured motor vehicle,” and the definition of “uninsured motor
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vehicle” expressly “does not include an underinsured vehicle.”
(Id.)
Likewise, N.J.S.A. 17:28-1.1 separately defines
“underinsured motorist coverage,” 17:28-1.1(1), and “uninsured
motor vehicle,” 17:28-1.1(1), and further states that
“‘[u]ninsured motor vehicle’ shall not include . . . an
underinsured motor vehicle.’”
Id., see also, Prudential Prop. &
Cas. Ins. Co. v. Johnson, 238 N.J. Super. 1, 7 (App. Div. 1989)
(“Johnson also suggests that we should interpret the UIM statute
and the UM statute similarly.
He bases his argument on earlier
cases that dealt only with UM coverage. . . . Johnson’s reliance
on these cases, however, is clearly misplaced.
The UM coverage
statute does not require an offset for payments made under
liability coverage, whereas the UIM statute compels such an
offset.”).
Thus, to accept USAA’s argument would be to read
“uninsured” to mean “underinsured,”-- two distinct statutory
terms of art-- in contravention of the plain language of the
GEICO policy.
This the Court cannot, and will not, do.
Moreover, New Jersey case law concerning set-offs against
UIM coverage supports GEICO’s position.
See Filippatos v.
Selective Insurance Company of America, 241 N.J. Super. 236, 238
(App. Div. 1990) (“The available limit of plaintiff’s $500,000
UIM coverage must be reduced to $350,000 by the $150,000 he has
recovered under the tortfeasor’s liability insurance.”);
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accord., Gambino v. State Farm Ins. Co., 348 N.J. Super. 204,
209 (App. Div. 2002) (discussing with approval, and applying
Filippatos); see also Ball v. Reese, 2018 WL 220771 (App. Div.
May 15, 2018) (holding that the trial court did not err “in
applying a credit against an injured plaintiff’s underinsured
motorist (‘UIM’) coverage.”); Maleta v. N.J. Manufacturers Ins.
Co., 2007 WL 1703443 at *2 (“As a final matter, we note that
even if $100,000 in UIM coverage were available to Maleta
pursuant to NJM’s coverage provisions, Fahmy’s $100,000
liability coverage would be set off against it, reducing
Maleta’s recovery to zero.”); Krohn v. New Jersey Full Ins.
Underwriters Ass’n, 316 N.J. Super. 477, 485 (App. Div. 1998)
(“The Association contends that the settlement amount should
have been credited against plaintiff’s UIM policy limit, rather
than being deducted from the jury’s damage award.
We agree.”);
Wert v. Picciano, 189 N.J. Super. 178, 184 (Law. Div. 1982)
(“Therefore in this case the court holds that plaintiffs’
recovery shall be limited to the difference between the face
amount of the UIM endorsement of $25,000 and the $15,000 payment
made by Safeco on behalf of the insured tortfeasor, or
$10,000.”); see generally, French v. New Jersey Sch. Bd. Ass’n
Ins. Grp., 149 N.J. 478, 491 (1997) (“Other insurance clauses
originated in property insurance to protect insurers from being
required to pay double recoveries, and were later used by
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insurers in automobile policies to decrease or abolish duplicate
coverage various insurers were required to supply when multiple
policies applied to a claim.”).
Accordingly, the Court holds that GEICO is entitled to a
$100,000 credit towards its UIM coverage limit, thereby
exhausting the coverage limits.
Summary judgment will be
granted to GEICO as to Plaintiff’s claim for UIM benefits, and
USAA’s cross motion will be denied.
IV.
Conclusion
For the forgoing reasons, GEICO’s motion for summary
judgment as to Plaintiff’s breach of contract / claim for UIM
benefits against GEICO will be granted, and USAA’s cross motion
for summary judgment as to that claim will be denied.
An
appropriate Order shall issue.
May 31, 2018
__s/ Renée Marie_Bumb_______
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE
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