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Pinto v. New Jersey Manufacturers Insurance Co.6/6/2005
Argued October 27, 2004
This insurance appeal involves the application of an underinsured motorist (UIM) step-down clause in an employer's business automobile policy to a case in which an employee has been injured in a covered vehicle in a work-related accident. The step-down provision capped the employer's UIM exposure at the limit provided by the employee's own automobile insurance policy or that of a resident family member, except that the step-down would be inapplicable if the employee qualified as a "named insured" under the employer's policy. Because the Court's earlier opinions have expressed its clear willingness to enforce unambiguous step-down provisions as a matter of contract between insurers and insureds, see Magnifico v. Rutgers Cas. Ins. Co., 153 N.J. 406 (1998), the issue here is one of insurance contract interpretation. Specifically, the question is whether the denomination of a corporate entity as the "named insured" in the employer's policy is so ambiguous as to allow any employee to be characterized as a "named insured" and thus avoid the step-down. The Appellate Division answered that question in the negative. Pinto v. New Jersey Mfrs. Ins. Co., 365 N.J. Super. 378, 381 (2004). We now affirm the thorough and thoughtful opinion by Judge Fall.
I.
On December 22, 1997, plaintiff Raymond Pinto sustained severe personal injuries when the truck he was driving was struck from behind by a vehicle driven by Theresa Trotter. At the time of the accident, Pinto was an employee of R.W. Vogel, Inc. (Vogel), a company owned and controlled by Roger and Anita Vogel, and was driving a truck owned by Holgate Property Associates (Holgate), another company also owned by Roger and Anita. The truck operated by Pinto on the date of the accident was the same truck regularly assigned to him for his work with Vogel. On that day, however, he was assigned to work on a street cleaning job for Environmentally Clean Naturally, Inc. (ECN), a corporation owned by the Vogels' son, Jeffrey. Both Roger and Jeffrey had given Pinto permission to use the truck to perform the street cleaning operation that day.
The truck was insured by Vogel through a business insurance automobile policy issued by New Jersey Manufacturers Insurance Company (NJM). The policy named the two corporate entities of Vogel and Holgate as the "named insureds." No natural person was so listed; however, Roger and Anita were identified as individuals insured for "Drive Other Car" coverage and "Broadened Personal Injury Protection" coverage provided through endorsements.
The policy also included an endorsement providing uninsured motorist (UM)/ underinsured motorist (UIM) coverage with a limit of one million dollars per accident. The UM/UIM endorsement stated that it provided coverage for "all sums the insured is legally entitled to recover as compensatory damages from the owner or driver of an uninsured motor vehicle or an underinsured motor vehicle." The endorsement contained two step-down provisions that lessened the limit of UM/UIM coverage available in certain circumstances for persons who were not "named insureds" under the NJM policy. The first provision applied if:
(1) An insured is not the individual named insured under this policy;
(2) That insured is an individual named insured under one or more other policies providing similar coverage; and
(3) All such other policies have a limit of insurance for similar coverage which is less than the Limit of Insurance for this coverage.
In that case, "the most" the NJM policy "will pay for all damages resulting from any one accident with an uninsured motor vehicle or an underinsured motor vehic
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