SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO . A - 1969
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MANUEL SANCHEZ and YOLANDA SANCHEZ , Plaintiff s - Appellant s/ Cross - Respondents ,

v.
NEW JERSEY TURNPIKE AUTHORITY, PORFIRIO I. RAMON and MARIA E. RAMON, Defendant s - Respondent s, and
NEW JERSEY MANUFACTURERS INSURANCE, Defendant
- Respondent/ Cross - Appellant.

______________________________

Argued October 17, 2017

– Decided Before Judges Reisner and Hoffman.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L - 8597
- 12. Thomas De Seno argued the cause for appellant s /cross

- respondent s.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court . " A lthough 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.

November 16, 20172 A - 1969
- 15T3 Gage Andretta argued the cause for respondent New Jersey Turnpike Authority (Chiesa Shahinian & Giantomasi, PC , attorneys; Bruce Ettman, on the brief). John A. Camassa argued the cause for res pondent/cross

- appellant New Jersey Manufacturers Insurance Company (Camassa Law Firm, PC, attorneys; Mr. Camassa, of counsel; Christopher M. Brady, on the briefs).
PER CURIAM Plaintiffs Manuel and Yolanda Sanchez appeal from an order
dated December 4, 20 15, denying their motion for reconsideration of a September 24, 2015 order , which in effect determined that New Jersey Manufacturers Insurance Company (NJM) did not owe plaintiffs underinsured motorist (UIM) coverage for an automobile accident . NJM filed a protective cross

- appeal from an October 23, 2015 order denying its motion for a new trial on damages , claiming errors in the jury instructions.
On plaintiffs' appeal, w e vacate the September 24, 2015 and December 4, 2015 orders , and we remand the matter to the trial

court for a plenary hearing to decide material factual disputes concerning the coverage issue. NJM failed to perfect the cross

appeal by providing us with all of the pertinent trial transcripts. Without the entire trial record , includ ing the testimony of the damages experts, we cannot determine whether any alleged charging3 A - 1969
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errors had a clear capacity to produce an unjust result . See R. 2:10
- 2. Accordingly, we dismiss the cross
- appeal.

I In 2011, Manuel Sanchez , 1 a State Trooper, was injured in an auto accident while he was on duty, driving a vehicle owned and insured by the New Jersey Turnpike Authority (the Authority). The other driver, Porfirio Ramon, had a $15,000 auto insurance policy. After settling with Ra mon for the $15,000 policy limit, plaintiffs sought UIM coverage from the Authority and from Manuel's personal auto insurance policy issue by NJM . There was no dispute that the NJM policy provided $300,000 in UIM coverage. A dispute arose as
to whether t he Authority provided $15,000 or $2 million in UIM
coverage. The dispute was based on the following unusual set of facts. The Authority was self

- insured, but had procured an excess policy from Chartis Claims, Inc. 2 for amounts over $2 million . Endorsement No. 23 of that policy , which was titled

1 Manuel's wife Yolanda sought per quod damages. We refer to Mr. and Mrs. Sanchez collectively as plaintiffs. For clarity, and intending no disrespect, we refer to them individually by their first names.

2 The Chartis policy indicates that coverage was being provided by "National Union Fire Insurance Company of Pittsburgh, Pa." However, the parties have referred to the insurer as "Chartis" and we will do so as well.4 A - 1969
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"Uninsured/Underinsured Motorists Coverage Endorsement," could be construed to mean that Chartis was providing UIM coverage for occupants of the Authority's vehicles on an excess basis , and that
the Autho rity was self

- insured for $2 million in UIM coverage. The endorsement included the following sentence: "Uninsured/Underinsured Motorists Retained Limit $2,000,000
INSURING AGREEMENT." The Authority's position was that the Chartis policy only covered thir d
- party claims, not UIM claims. The Authority contended that Endorsement No. 23 , including the retained limit language concerning UIM coverage , was insurance company boilerplate, which was not applicable to the type of coverage the Authority had purchased from Chartis and should not have been included in the policy. While the UIM litigation was pending , plaintiffs filed a motion to amend the complaint to add Chartis as a defendant. The assigned motion judge (the first judge) did not decide whether the
Ch artis policy in fact provided UIM coverage or what amount of UIM coverage the Authority provided . Rather, he reasoned that, even if the Chartis policy included UIM coverage, plaintiffs failed to demonstrate that their damages exceeded $2 million , so as to trigger any "umbrella coverage" the Chartis policy provided. Accordingly, the judge denied the motion because the amendment
would have been "futile."5 A - 1969
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It appears from the record that the language in the Chartis
endorsement had created issues in other auto accident cases involving the Authority , concerning the level of the Authority's underlying UIM coverage . At his deposition, the Authority's deputy executive director , John O'Hern, testified that the Authority's
self
- insur ed retention limit for UIM coverage was $15,000, but he testified that there was no written documentation setting that coverage limit. O'Hern testified to his understanding that UIM coverage of $15,000 per individual and $30,000 per accident was statutori ly required. O'Hern also testified to his understanding that the Authority never had UIM excess coverage from Chartis and
Endorsement No . 23 was "a mistake." He noted that section O of the exclusions section of the basic Chartis policy stated that the
po licy did not apply to the insured's UIM obligation. O'Hern acknowledged evidence that in two prior cases involving injured State Troopers, the Authority had settled UIM claims for considerably more than $15,000. He testified that in both of those cases, the Authority's initial litigation position had been that its UIM limits were $15,000/30,000. The minutes of the Commission meeting concerning one of the settlements indicate that the pl aintiff in that case claimed that he suffered a traumatic brain injur y. However, at his deposition, O'Hern also recalled a more recent case in which the Authority had litigated6 A - 1969
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its obligation to provide UIM coverage and had obtained a Law Division decision holding that its UIM coverage was limited to $15,000. According to O'Hern , that decision arose from a court hearing in which he testified.
On February 15, 2012, the Authority's acting director of law authored a memo indicating that the Authority's limit had always been $15,000, but that the Chartis policy language had c reated an issue on that point. H e recommended that the Authority's Board of Commissioners raise the UIM self
- insured limit to $250,000 to adequately protect the Authority's employees . H e also recommended asking Chartis to delete the controversial language from its policy . On February 28, 2012, t he Commissioners approved that recommendation, voting to change the Authority's UIM self

- insured retention limit to $250,000 and authorizing the executive director

to as k Chartis to remove Endorsement No. 23 from its policy . 3 According to O'Hern, the Authority's current umbrella policy does not contain a provision for UIM coverage. Despite k nowing that there was an issue over the Authority's
self
- insured limit , plaintif fs settled with the Authority for $67,000. The settlement agreement recited that it was without prejudice to the Authority's position that at the time of the

3 The memo and the Commission minutes refer to Endorsement No. "24" but we conclude this is a typographic error.7 A - 1969
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accident, it only provided $15,000 in UIM coverage, regardless of the terms of any existing exces s policy. Plaintiffs then proceeded to trial against NJM , before a second judge . Shortly before the trial, NJM filed a motion ask ing the trial court to declare that the Authority's UIM coverage was $2 million, and that NJM's policy was excess to the cove rage provided by the Authority . Instead of deciding the coverage issue, the second judge declined to entertain the motion and proceeded with the trial. The jury returned a verdict of $250,000 in damages for Manuel and $50,000 in per quod damages for Yola nda. After the trial, the second judge determined that t he Authority's UIM self

insured retention limit was $2 million and that , pursuant to the language of the NJM policy, NJM's coverage was excess to that provided by the Authority. In effect, that determination vitiated the $300,000 jury verdict against NJM.

II On this appeal, plaintiffs contend that the language in the Chartis policy was incorrect, and that the language of an excess policy cannot legally determine the insured public entity's underlying coverage limit . The Authority supports plaintiffs' position. The Authority argues, in the alternative, that it had no obligation to provide any UIM coverage and did not include such8 A - 1969
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coverage in its self

- insured retention, or th at its UIM obligation was limited to $15,000. Ordinarily, the interpretation of an insurance policy is a contract question that presents solely a legal issue. See Powell v. Alemaz, Inc. , 335 N.J. Super. 33, 37 (App. Div. 2000) . However, in this case, wh ere the Authority was self

- insured, the issue is not so simple. After reviewing the record, we conclude that there is a material factual issue concerning the Authority's UIM coverage at the time of the 2011 accident. The Chartis policy only provides

cove rage that is excess to underlying existing coverage. It neither provides primary coverage nor creates any underlying
coverage. See Arico v. Twp. of Brick , 281 N.J. Super. 471, 475 (App. Div.) , certif. denied , 142 N.J. 515 (1995) . Language in the Chartis policy concerning the Authority's amount of underlying UIM coverage might constitute some evidence of that coverage. However, the Chartis policy language cannot not create such underlying coverage if it does not otherwise exist.
There are factual issues concerning how the contested langua ge came to appear in the Chartis policy; whether the Authority negotiated or paid for any UIM or UM coverage from
Chart is; or whether Endorsement No. 23, or at least the included language about the retenti on amount, was simply boilerplate that Chartis included in error. We understand the first judge's9 A - 1969
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reasoning in denying plaintiff's motion to add Chartis as a party, however, Chartis may have records or employees that can shed light on the coverage issue. If Chartis will not voluntarily produce its information on remand , it may be added as a party for discovery purposes only. The record also presents factual issues concerning the Authority's policies and its past conduct with respect to providi ng
UIM coverage to persons driving the Authority's vehicles . It is difficult to comprehend how a public agency such as the Authority could have no contemporaneous records defining its self
- insured

UIM coverage. Because there is no statutory requirement for UIM coverage, i t is also unclear whether or how the Authority could provide $2 million in UIM coverage , without a public vote of its Commissioners authorizing that coverage . 4 See N.J.S.A. 17:28
- 1.1 (requiring auto insurance policies to include UM, but not UIM , coverage) ; Downey v. City of Elizabeth , 273 N.J. Super. 335, 338
- 39 (App. Div. 1994) (self
- insured public entity need not provide UIM coverage) . It is further unclear why the Authority settled UIM claims for amounts so far in excess of what it claimed w as its

4 NJM's appendix contains the minutes of a July 27, 2010 Commission vote authorizing the renewal of the Chartis umbrella policy, but the resolution only refers generally to auto liability excess coverage and makes no mention of authorizing any underlying UIM coverage.10 A - 1969
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self
- insured limit of $15,000 . The parties should have the opportunity to present and cro ss - examine witnesses on the factual issue s and the trial court should have the opportunity to gauge their credibility . In response to our questions at oral argument , the Auth ority's counsel conceded that an evidentiary hearing was required, while
counsel for NJM and plaintiff s insisted that their respective positions should prevail without a hearing. In fairness to the second judge, we acknowledge that none of the parties specifically asked for a hearing in the trial court. However, in view of the amount of money at stake here, and the disputed factual and credibility issues , we conclude that a plenary hearing is requir ed. 5 Accordingly, we vacate the Septe mber 24, 2015 and December 4, 2 0 15 orders, and we remand for further proceedings consistent with this opinion. We do not retain jurisdiction. Dismissed in part, vacated in part and remanded.

5 In light of our disposition of the appeal, we do not address the parties' additional arguments.