Opinion ID: 2298588
Heading Depth: 1
Heading Rank: 2

Heading: The Lundy Claim

Text: Doris Lundy was injured in an automobile accident with an uninsured motorist on October 29, 1977 while she was a passenger in a 1973 Plymouth. Her husband, Peter, owned the automobile and was the operator of the car at the time of the accident. The automobile was insured by Aetna Casualty and Surety Co. (Aetna) under a policy dated January 14, 1977. That policy also covered two other vehicles owned by Mr. Lundy, a 1972 Chevrolet Van and a 1972 Volkswagen. The Lundy policy was never produced as evidence, although the declaration sheet was attached to the plaintiff's complaint. The face sheet reveals that all three vehicles had uninsured motorist coverage. Neither the limit of liability nor the premium charged for uninsured motorist coverage is disclosed on the declaration sheet. Apparently the uninsured motorist coverage is included in the bodily injury coverage. [4] The limits of liability for bodily injury were $15,000 each person, $30,000 each occurrence. Mrs. Lundy submitted her claim to an arbitrator apparently in accordance with the policy provisions. The arbitrator awarded $22,500 representing the full value of Mrs. Lundy's damages under the uninsured motorist coverage. However, the arbitrator made no decision with respect to the amount of coverage. Aetna offered to pay only $15,000. Mrs. Lundy filed suit to confirm the award of $22,500 and to compel Aetna to pay the additional $7,500. On defendant's motion for summary judgment the trial court vacated that part of the award in excess of $15,000. The Appellate Division affirmed. We granted certification. 91 N.J. 207 (1982). The principles expressed in the Isom matter are equally applicable to this case. The judgment is reversed and the cause remanded to the trial court for further proceedings consistent with this opinion. CLIFFORD, J., dissenting. The Court concludes that the uninsured motorist statute, N.J.S.A. 17:28-1.1, and the provisions of the Allstate insurance policy in question compel intra-policy stacking or pyramiding of uninsured motorist (UM) coverage. What this means is that those who fall within the definition of an insured under a single automobile liability policy covering several vehicles  three, in each of these cases  can recover under the UM coverage of each car and thereby multiply the limits of liability for the UM coverage by the number of automobiles designated in the policy. Here is where that result takes us: Let us take, as a starting point, a fleet, or several vehicles, policy issued to a single insured. If we desire to carry this to a point of absurdity, let us say that the policyholder is a city, owning a thousand automobiles, with an uninsured motorist coverage of $50,000. If we said that the risk, in any one collision, then would be the cumulative total, or stacked coverage, in any one incident the company's exposure would be 50 million dollars as to each vehicle  an absurdity, which no company could possibly afford to insure. [Appelman, 8C Insurance Law and Practice, § 5101 at 44 (footnote omitted).] [1] Because any reading of the statute and the insurance policy that yields such a result does not make much sense to me, I view it with a suspicion that has ripened into full-blown disagreement with the Court, wherefore I dissent.