TT&H Attorney Mark Sander Wins Dismissal of UM Claim Based Upon the Policy’s Non-Duplication Provision and the Plaintiff’s Prior Recovery of Liability Coverage

Attorney Mark Sander recently won what appears to be an issue of first impression in New Jersey, obtaining the dismissal of a UM claim brought against USAA.  The claim was brought by Plaintiff, Laura Fei, who sustained serious bodily injuries as a passenger in a two-vehicle automobile accident.  USAA insured the host vehicle, providing both liability coverage and UM coverage in the amount of $100,000/$300,000.  The other vehicle was uninsured.  Following the accident, USAA settled Plaintiff’s personal injury claims against its insured, paying the full $100,000 liability limit to Plaintiff Fei. Plaintiff then brought an action seeking recovery under the UM provisions of the USAA policy.

Winning summary judgment for USAA, Mark argued that the UM claim was barred by the policy’s non-duplication of payment provision.  Noting that the Plaintiff had already recovered the maximum amount of liability coverage available to her under the policy, Mark argued that the non-duplication of coverage provision barred Plaintiff’s UM claim.  He was able to convince the Court that the issue was not controlled by a 1979 New Jersey Supreme Court decision, Ciecka v. Transamerica Ins. Group, which did invalidate the host driver’s insurance policy’s non-duplication provision, and made available to the plaintiff therein both the host driver’s liability coverage and the host driver’s UM coverage.  Mark argued that Ciecka was decided before various legislative amendments made in 1984, which served to eliminate stacking of UM benefits, while also allowing certain other limitations on UM coverage, including the non-duplication of coverage, as expressly provided at 17:28-1.1(d).  The Court agreed, finding that, pursuant to a non-duplication provision, a plaintiff’s UM recovery could properly be reduced or denied due to a prior payment under the policy’s liability coverage.  The Court thus granted Mark’s Motion for summary judgment.

Notably, the decision appears to be one of first impression.  Although New Jersey Courts had recognized that the statutory amendments eliminated UM stacking, only one reported decision made mention of the legislature’s permission of certain other limitations on UM coverage pursuant to policy terms, including the non-duplication of coverage.  However, even that Court did so only as to the non-duplication of UM and UIM coverages.  In addition, no reported decisions had found that the Supreme Court’s holding in Ciecka was overruled by the legislature’s 1984 amendments and, seemingly, many insurers had assumed that decision still controlled.  That assumption is now undermined by the Court’s decision in Fei.

Questions about this case can be directed to Mark Sander at (856) 334-0415 ext. 8915 or msander@tthlaw.com.