Court Opinion

ID: 4578585
Source: CourtListenerOpinion
Date Created: 2020-10-20 14:07:23.990096+00
Date Added: 2024-06-11T09:28:12.653936
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NOT FOR PUBLICATION WITHOUT THE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-5482-18T4

SATNAM SINGH and
SANTOSH KUMAR,

          Plaintiffs-Appellants,

v.

LONELL CHESTNUT, JR.,
and AAA INSURANCE,

          Defendants,

and

PENN NATIONAL INSURANCE,

     Defendant-Respondent.
________________________________

                   Submitted October 6, 2020 – Decided October 20, 2020

                   Before Judges Yannotti and Mawla.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Burlington County, Docket No. L-2105-18.

                   Devlin, Cittadino & Shaw, PC, attorneys for appellants
                   (John G. Devlin, on the brief).
            Margolis Edelstein, attorneys for respondent (Robert
            M. Kaplan and Lawrence J. Bunis, on the brief).

PER CURIAM

      Plaintiffs Satnam Singh and Santosh Kumar appeal from orders entered

by the Law Division on July 12, 2019, which granted summary judgment in

favor of defendant Penn National Insurance (Penn National) and denied

plaintiff's cross-motion for summary judgment. We affirm.

      On October 26, 2016, Lonell Chestnut, Jr. was getting gas for his car at a

station on Route 206 in Bordentown. At the time, Singh was working as an

attendant at the gas station. Chestnut drove away from the gas pump while the

nozzle and hose were still attached to his vehicle. The nozzle struck Singh in

the face, causing him to sustain certain injures.

      Plaintiffs filed a complaint against Chestnut and New Jersey

Manufacturers    Insurance    Company       (NJM),   which   provided   workers'

compensation coverage to his employer, APCO Petroleum Corporation

(APCO).1 Chestnut's vehicle was insured under a policy issued by GEICO,

which had bodily injury liability limits of $15,000 per person and $30,000 per

1
  Kumar is Singh's spouse. She asserted a claim based on the loss of Singh's
support, society, services, and consortium.
                                                                         A-5482-18T4
                                        2
occurrence.   To resolve the claims against Chestnut, GEICO tendered the

$15,000 per person coverage provided under its policy to plaintiffs.

      Believing Singh's damages exceeded $15,000, plaintiffs filed an amended

complaint asserting claims for underinsured motorist (UIM) coverage against

AAA Insurance (AAA) and Penn National. Singh did not own an automobile,

and the AAA policy insured a vehicle owned by his son with whom he was

residing. Because the AAA policy had limits equal to those under Chestnut's

GEICO policy, plaintiffs agreed to dismiss their claims against AAA.

      The Penn National policy was a commercial automobile insurance policy

issued to APCO. It provided $1,000,000 in UIM coverage. Penn National

denied Singh's request for UIM coverage because he was not a named insured

under the policy and, at the time of the accident, he was not occupying a vehicle

covered under the policy.

      Penn National filed a motion for summary judgment and argued Singh was

not entitled to UIM coverage under its policy. Plaintiffs opposed the motion

and filed a cross-motion for summary judgment on the coverage issue. The

parties waived oral argument.

      On July 12, 2019, the motion judge filed orders, which granted Penn

National's motion for summary judgment and denied plaintiffs' cross-motion.

                                                                         A-5482-18T4
                                       3
The judge determined the Penn National policy did not provide Singh with UIM

coverage because he did not meet the requirements for such coverage under the

policy. This appeal followed.

      On appeal, plaintiffs argue that the trial court's orders must be reversed.

They contend the trial court's decision is contrary to N.J.S.A. 17:28-1.1(f),

which elevates Singh to the status of "named insured" under the Penn National

policy.

      When reviewing an order granting or denying summary judgment, we

apply the standard set forth in Rule 4:46-2(c). Globe Motor Co. v. Igdalev, 225
N.J. 469, 479 (2016) (citing Bhagat v. Bhagat, 217 N.J. 22, 38 (2014)).

Summary judgment shall be granted when the evidence before the court on the

motion "show[s] 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."

R. 4:46-2(c).

      Here, the facts material to the coverage determination are not in dispute.

The interpretation of an insurance contract is an issue of law, subject to our de

novo review. Sealed Air Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 375

(App. Div. 2008) (citing Fastenberg v. Prudential Ins. Co. of Am., 309 N.J.

Super. 415, 420 (App. Div. 1998)). "A trial court's interpretation of the law and

                                                                         A-5482-18T4
                                       4
the legal consequences that flow from established facts are not entitled to any

special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140
N.J. 366, 378 (1995) (citations omitted).

      The declarations page of Penn National's policy identifies APCO and

Atlantic Management Company (AMC) as the named insureds. The policy

includes an endorsement for uninsured motorist (UM) and UIM coverage, which

states in relevant part:

             A. Coverage

             1. We will pay all sums the "insured" is legally entitled
             to recover as compensatory damages from the owner or
             driver of an "uninsured motor vehicle" or "underinsured
             motor vehicle." The damages must result from "bodily
             injury" sustained by the "insured", or "property
             damage" caused by an "accident". The owner's or
             driver's liability for these damages must result from the
             ownership, maintenance or use of an "uninsured motor
             vehicle" or an "underinsured motor vehicle".

             B. Who Is An Insured

             If the Named Insured is designated in the Schedule or
             Declarations as:

             1. An individual, then the following are "insureds":

             a. The Named Insured and any "family members".

             b. Anyone else "occupying" a covered "auto" or a
             temporary substitute for a covered "auto".

                                                                         A-5482-18T4
                                        5
            c. Anyone for damages he or she is entitled to recover
            because of "bodily injury" sustained by another
            "insured".

            2. A partnership, limited liability company, corporation
            or any other form of organization, then the following
            are "insureds":

            a. Anyone "occupying" a covered "auto" or a temporary
            substitute for a covered "auto".

            b. Anyone for damages he or she is entitled to recover
            because of "bodily injury" sustained by another
            "insured".

            c. The Named Insured for "property damage" only.

      The policy defines "occupying" as "in, upon, getting in, on, out or off."

For UIM coverage, "autos" are those "you own that because of the law in the

state where they are licensed or principally garaged are required to have and

cannot reject [UM] Coverage." The term "you" refers to the "named insured"

listed in the declarations page.

      The motion judge correctly found that Singh was not an "insured" under

the Penn National policy. He is not identified on the declarations page as a

"named insured." Moreover, at the time of the accident, Singh was working as

a gas station attendant as APCO's employee. It is undisputed that Singh was not

"occupying" an automobile covered under the policy at the time he was injured.

                                                                       A-5482-18T4
                                       6
      When determining if a person was "occupying" a covered vehicle, the

court must consider the facts related to the accident and the use of the vehicle.

Thompson v. James, 400 N.J. Super. 286, 292 (App. Div. 2008) (citing Torres

v. Travelers Indem. Co., 171 N.J. 147, 149 (2007)). To trigger UIM coverage,

the claimant must show "a substantial nexus between the insured vehicle and the

injury sustained." Id. at 293 (citing Torres, 171 N.J. at 149). Here, plaintiffs

have not shown a "substantial nexus" between an insured vehicle and Singh's

injuries.

      Plaintiffs argue, however, that because Singh was working for APCO at

the time of the accident, N.J.S.A. 17:28-1.1(f) gives him the status of "named

insured" under the Penn National policy. The statute provides:

            Notwithstanding the provisions of this section or any
            other law to the contrary, a motor vehicle liability
            policy or renewal of such policy of insurance, insuring
            against loss resulting from liability imposed by law for
            bodily injury or death, sustained by any person arising
            out of the ownership, maintenance or use of a motor
            vehicle, issued in this State to a corporate or business
            entity with respect to any motor vehicle registered or
            principally garaged in this State, shall not provide less
            uninsured or underinsured motorist coverage for an
            individual employed by the corporate or business entity
            than the coverage provided to the named insured under
            the policy. A policy that names a corporate or business
            entity as a named insured shall be deemed to provide
            the maximum uninsured or underinsured motorist
            coverage available under the policy to an individual

                                                                         A-5482-18T4
                                       7
            employed by the corporate or business entity,
            regardless of whether the individual is an additional
            named insured under that policy or is a named insured
            or is covered under any other policy providing
            uninsured or underinsured motorist coverage.

            [Ibid.]

      When interpreting a statute, our "paramount goal" is discerning the

Legislature's intent and "the best indicator of that intent is the statutory

language." DiProspero v. Penn, 183 N.J. 477, 492 (2005) (citing Frugis v.

Bracigliano, 177 N.J. 250, 280 (2003)). "We ascribe to the statutory words their

ordinary meaning and significance." Ibid. (citing Lane v. Holderman, 23 N.J.
304, 313 (1957)). If the statutory language is ambiguous and subject "to more

than one plausible interpretation," the court may consider extrinsic evidence,

including legislative history. Id. at 492-93 (citing Cherry Hill Manor Assocs. v.

Faugno, 182 N.J. 64, 75 (2004)).

      In James v. N.J. Mfrs. Ins. Co., 216 N.J 552, 565 (2014), the Court noted

that N.J.S.A. 17:28-1.1(f) was enacted in response to the decision in Pinto v.

N.J. Mfrs. Ins. Co., 183 N.J. 405, 412 (2005). In Pinto, the court upheld the

validity of "step-down" clauses which cap the amount of UM or UIM coverage

available to the employee of a corporate entity at the limits available under their

personal automobile insurance coverage. Pinto, 183 N.J. at 407.

                                                                           A-5482-18T4
                                        8
      The Court in James stated that N.J.S.A. 17:28-1.1(f) prohibits the use of

step-down provisions to provide less UM/UIM coverage to employees than the

coverage provided to "named insureds" on the policy. James, 216 N.J. at 555-

56. The Court also stated that if the policy only lists the employer as the "named

insured," its employees are "deemed" eligible for the maximum available

coverage. Id. at 556.

      We are convinced that N.J.S.A. 17:28-1.1(f) was intended to address the

amount of UM or UIM coverage available to a business entity's employees who

are entitled to coverage under the entity's commercial liability policy. The

statute does not apply where, as in this case, the employee was not entitled to

such coverage under the policy.

      The UM/UIM endorsement of the Penn National policy identifies APCO

as the named insured. It further provides that the term "insured" includes

individuals identified as an insured in the policy's schedule or declaration, and

any family members, as well as any other person "occupying" a covered vehicle

or a temporary substitute for such a vehicle.

      Singh was not identified as a named insured under the policy. Therefore,

he would be entitled to UM or UIM coverage only if he was injured while

occupying an auto covered under the policy, or a temporary substitute for a

                                                                          A-5482-18T4
                                        9
covered vehicle. As stated above, it is undisputed that Singh was not occupying

a covered auto when he was injured. Thus, Singh is not entitled to UM or UIM

coverage under the Penn National policy and N.J.S.A. 17:29-1(f) does not confer

insured status upon him.

      Further, the legislative Committee's statement that accompanied the

enactment of N.J.S.A. 17:28-1(f) supports our conclusion that the statute was

intended to address the amount of UM or UIM coverage available to certain

employees of business entities under commercial policies. The Committee

stated:

            This bill is in response to the New Jersey Supreme
            Court's decision in [Pinto]. In [Pinto], the court held
            that as to a motor vehicle liability policy that names a
            corporate or business entity as a named insured, step-
            down provisions which limit uninsured or underinsured
            motorist coverage for employees of that entity that are
            not individuals named on the policy are valid and
            enforceable. Thus, the court's ruling, which upholds
            earlier case law on the subject, allows an employee's
            coverage under an employer's business motor vehicle
            insurance policy to be limited to the lower limits of
            uninsured or under insured motorist coverage contained
            in the employee's individual motor vehicle liability
            policy, even in situations in which the employee is
            injured in a covered vehicle in a work-related accident,
            if the employer's policy so provides. This bill reverses
            the effect of the [Pinto] decision by prohibiting step-
            down provisions in these policies. Further, the bill
            expressly provides that a policy that names a corporate
            or business entity as a named insured shall be deemed

                                                                       A-5482-18T4
                                      10
            to provide the maximum uninsured or underinsured
            motorist coverage available under the policy to any
            individual employed by the corporate or business
            entity, regardless of whether the individual is an
            additional named insured under that policy, or is a
            named insured or is covered under any other policy
            providing uninsured or underinsured motorist
            coverage.

            [Assemb. Fin. Institutions and Ins. Comm. Statement to
            S. 1666 (May 10, 2007).]

      As indicated in the Committee's statement, N.J.S.A. 17:28-1.1(f) was

intended to bar the enforcement of the step-down provision in the policy of a

corporate or business entity that limits the UM or UIM coverage available to the

entity's employees. The statute also provides that, under certain circumstances,

employees of a corporate or business entity would be entitled to the maximum

amount of UM or UIM coverage under the entity's commercial policy. The

statute was not, however, intended to confer insured status upon employees who

are not entitled to UM or UIM coverage under the policy.

      Plaintiffs further argue that Penn National's policy creates two tiers of

UM/UIM coverage: one for certain family members of the owner of APCO, and

the other for other potential insureds under the policy. Plaintiffs argue these

family members would be entitled to the maximum available coverage under the

policy, while Singh is not.

                                                                        A-5482-18T4
                                      11
      This contention is entirely without merit.   These family members of

APCO's owner are not identified as named insureds in the declaration page or

the UM/UIM endorsement. The only named insureds are APCO and AMC.

Family members of the person who owns APCO would not be entitled to UM or

UIM coverage unless they were occupying a covered auto or a temporary

substitute for a covered auto. Therefore, the criteria for UM and UIM coverage

under the Penn National policy is the same for Singh and the family members

of APCO's owner.

      Affirmed.

                                                                      A-5482-18T4
                                     12