Court Opinion

ID: 4700829
Source: CourtListenerOpinion
Date Created: 2021-07-02 14:10:36.528042+00
Date Added: 2024-06-11T08:06:13.485377
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-1637-19

YVONNE ZABALA-LUGO,

          Plaintiff-Appellant,

v.

STILLWATER PROPERTY &
CASUALTY INSURANCE
COMPANY,1

     Defendant-Respondent.
__________________________

                   Submitted January 4, 2021 – Decided July 2, 2021

                   Before Judges Currier and DeAlmeida.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Bergen County, Docket No. L-6956-18.

                   Blume, Forte, Fried, Zerres & Molinari, PC, attorneys
                   for appellant (Jeffrey J. Zenna, on the brief).

                   Traub Lieberman Strauss & Shrewsberry, LLP,
                   attorneys for respondent (Gregory S. Pennington, on
                   the brief).

1
     Improperly pled as Stillwater Insurance Group.
PER CURIAM

      Plaintiff Yvonne Zabala-Lugo appeals from the November 21, 2019 order

of the Law Division granting summary judgment in favor of defendant,

Stillwater Property & Casualty Insurance Company (Stillwater), finding that the

umbrella insurance policy purchased by Zabala-Lugo from Stillwater was

unambiguous in its exclusion of underinsured motorist (UIM) coverage. We

affirm.

                                      I.

      The following facts are derived from the record. Zabala-Lugo purchased

an insurance policy from Skylands Insurance Association (Skylands) that served

as her primary home and auto insurance policy, including UIM coverage.

      Zabala-Lugo also purchased an umbrella liability policy from Stillwater.

The declaration coverage page of the Stillwater policy contains a schedule of

the underlying insurance coverage Stillwater required Zabala-Lugo to maintain

during the term of the Stillwater policy. With respect to UIM coverage, the

required coverage column is blank, Stillwater's coverage is described as

"[a]vailable in states where required by law[,]" and the required underlying

coverage limit is described as "[l]imit must be the same as that [c]arried for

[a]utomobile [l]iability." New Jersey does not require UIM coverage. The

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Stillwater policy also contains a "summary of current coverages," that does not

include UIM coverage.

      In addition, the policy's coverage form provides as follows:

            Coverages

            A.     Insuring Agreement

            We will pay damages, in excess of the "retained limit,"2
            for:

            1.   "Bodily injury" or "property damage" for which
            an "insured" becomes legally liable due to an
            "occurrence" to which this insurance applies . . . .

                   ....

            III.   Exclusions

            A.    The coverages provided by this policy do not
            apply to:

                   ....

            13. "Bodily injury" or "personal injury" to you or a
            "family member".

            This exclusion also applies to any claim made or suit
            brought:

2
   The Stillwater policy defines "retained limit" as "[t]he total limits of any
'underlying insurance' and other insurance that applies to an 'occurrence' or
offense which . . . [a]re available to an 'insured; or [w]ould have been available
except for the bankruptcy or insolvency of an insurer providing 'underlying
insurance'; or . . . [t]he deductible" of the underlying insurance if covered by the
Stillwater policy and not by any available underlying coverage.
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            a.    To repay; or

            b.    Share damages with;

            another person who may be obligated to pay damages
            because of "bodily injury" or "personal injury" to you
            or a "family member" . . . .

                  ....

            C.    We do not provide:

            1.    Automobile no-fault or any other similar
            coverage under this policy; or

            2.    Uninsured Motorists Coverage, Underinsured
            Motorists Coverage, or any other similar coverage
            unless this policy is endorsed to provide such coverage.

There is no endorsement in the policy providing UIM coverage.

      In 2014, Zabala-Lugo was a passenger in a car driven by Jasmine Lugo

when the vehicle was involved in an accident. According to Zabala-Lugo, the

driver of her vehicle struck a phantom car that had swerved into her lane to avoid

hitting a pedestrian. After the initial impact, the vehicle in which Zabala-Lugo

was a passenger was struck from behind by a car driven by Betsey Tavares.

      Zabala-Lugo discovered that Tavares's insurance policy did not provide

bodily injury liability insurance. Zabala-Lugo thereafter notified Stillwater that

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she intended to file an UIM claim under her policy. Stillwater informed Zabala-

Lugo that her policy did not provide UIM coverage.

      Zabala-Lugo later contacted Stillwater to notify the company that

Skylands had offered $100,000 to settle her UIM claim under her underlying

policy and that she intended to file an UIM claim under her Stillwater policy.

She also requested that Stillwater waive its subrogation rights.

      On May 25, 2018, Stillwater denied Zabala-Lugo's claim because her

policy did not include UIM coverage. Stillwater further advised that because

Zabala-Lugo did not have UIM coverage she did not need to request its consent

to accept the Skylands settlement.

      Zabala-Lugo subsequently filed a complaint in the Law Division seeking

a declaratory judgment that her Stillwater policy included UIM coverage.

Stillwater subsequently moved for summary judgment.

      On November 21, 2019, the trial court issued a written opinion and order

granting Stillwater's motion and dismissing Zabala-Lugo's complaint. The court

found that the Stillwater policy unambiguously stated it did not provide UIM

coverage and that Zabala-Lugo could have no reasonable expectation of having

obtained such coverage.        The court rejected Zabala-Lugo's "strained

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interpretation" of the Stillwater policy and her argument that public policy

required the court to read UIM coverage into the Stillwater policy.

      This appeal followed.     Zabala-Lugo argues that the trial court erred

because the Stillwater policy is ambiguous and should be read in her favor. In

addition, she argues the trial court erred when it rejected her public policy

argument.

                                        II.

      We review the trial court's decision granting summary judgment de novo,

using "the same standard that governs trial courts in reviewing summary

judgment orders." Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super.

162, 167 (App. Div. 1998). Rule 4:46-2(c) provides that a court should grant

summary judgment when "the pleadings, depositions, answers to interrogatories

and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact challenged and that the moving party is

entitled to a judgment or order as a matter of law." "Thus, the movant must

show that there does not exist a 'genuine issue' as to a material fact and not

simply one 'of an insubstantial nature'; a non-movant will be unsuccessful

'merely by pointing to any fact in dispute.'" Prudential, 307 N.J. Super. at 167

(quoting Brill v. Guardian Life Ins. Co., 142 N.J. 520, 529-30 (1995)). Our

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review is "based on our consideration of the evidence in the light most favorable

to the parties opposing summary judgment." Brill, 142 N.J. at 523.

      The trial court's interpretation of an insurance contract is a question of

law, which we review de novo. Polarome Int'l, Inc. v. Greenwich Ins. Co., 404

N.J. Super. 241, 260 (App. Div. 2008). The "trial court's interpretation of the

law and the legal consequences that flow from the established facts are not

entitled to any special deference." Id. at 259-260 (quoting Manalapan Realty,

L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).

      Insurance policies are subject to special rules of interpretation, as they are

contracts of adhesion. Longobardi v. Chubb Ins. Co., 121 N.J. 530, 537 (1990).

Such "policies should be construed liberally in [the insured's] favor to the end

that coverage is afforded 'to the full extent that any fair interpretation wil l

allow.'" Ibid. (quoting Kievit v. Loyal Protective Life Ins. Co., 34 N.J. 475, 482

(1961)). However, "the words of an insurance policy should be given their

ordinary meaning." Ibid. "[I]n the absence of an ambiguity, a court should not

'engage in a strained construction to support the imposition of liability' or write

a better policy for the insured than the one purchased." Oxford Realty Group

Cedar v. Travelers Excess & Surplus Lines Co., 229 N.J. 196, 207 (2017)

(quoting Progressive Cas. Ins. Co. v. Hurley, 166 N.J. 260, 272-73 (2001)).

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      An insured will be charged with what the average insured person would

understand from reading the policy. Morrison v. American Int'l Ins. Co. of Am.,

381 N.J. Super. 532, 542-43 (App. Div. 2005). If the language is ambiguous,

the "insured's reasonable expectations are brought to bear on misleading terms

and conditions of insurance contracts and genuine ambiguities are resolved

against the insurer." Id. at 537. However, an insurance policy is not per se

ambiguous because its sections are separately presented, including the

declarations page, definitions, exclusions, and endorsements.        Zacarias v.

Allstate Ins. Co., 168 N.J. 590, 603 (2001). In addition, "[e]xclusionary clauses

are presumptively valid and are enforced if they are specific, plain, clear,

prominent, and not contrary to public policy.        If the words used in an

exclusionary clause are clear and unambiguous, a court should not engage in a

strained construction to support the imposition of liability."     Flomerfelt v.

Cardiello, 202 N.J. 432, 441-42 (2010) (internal quotations omitted).

      We agree with the trial court's conclusion that the Stillwater policy is

unambiguous in its exclusion of UIM coverage. Several provisions of the

policy, including the exclusions page, state in clear language that UIM coverage

is not included in Zabala-Lugo's policy. Absent an express endorsement of UIM

coverage, which does not appear in the policy, Zabala-Lugo did not obtain such

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coverage. As the trial court aptly found, to interpret the Stillwater policy to

provide UIM coverage, as urged by Zabala-Lugo, would strain the plain

language of the agreement and give her coverage for which she has not paid a

premium.

      We also agree with the trial court's conclusion that public policy does not

require we adopt Zabala-Lugo's interpretation of the Stillwater policy. While

the Legislature has enacted a number of requirements for automobile insurance

policies, including minimum coverage and limits, it has not extended those

requirements to umbrella policies. Zabala-Lugo has identified no convincing

argument for a judicial declaration that our statutes provide insufficient

protection from a public policy perspective to policy holders who elect to obtain

coverage under an umbrella policy.

      To the extent we have not addressed any of Zabala-Lugo's remaining

arguments we find them to be without sufficient merit to warrant discussion in

a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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