O'Connell v. New Jersey Mfrs. Ins. Co.

Page 166

306 N.J.Super. 166

703 A.2d 360

Daniel D. O'CONNELL, Plaintiff-Appellant, v. NEW JERSEY MANUFACTURERS INSURANCE COMPANY and Parkway Insurance Company, Defendants-Respondents.

Superior Court of New Jersey Appellate Division.

Argued Nov. 6, 1997.

Decided Dec. 12, 1997.

Joel L. Pitman, Springfield, for plaintiff-appellant (Pitman, Pitman and Mindas and Budd, Larner, Gross, Rosenbaum, Greenberg & Sade, attorneys, Short Hills; Mr. Pitman, Springfield, and Donald P. Jacobs, Short Hills, on the brief).

Brian G. Steller, Roseland, for defendant-respondent New Jersey Manufacturers (Connell, Foley & Geiser, attorneys; Mr. Steller, of counsel; Jeffrey K. Lehrer, Warren, on the brief).

Eugene P. Franchino, Sommerville, for defendant-respondent Parkway Insurance (Miriam R. Rubin, attorney, New Brunswick; Mr. Franchino, on the brief).

Before Judges MUIR, Jr., KESTIN and CUFF.

The opinion of the court was delivered by

MUIR, Jr., J.A.D.

We are called upon, for the second time, to resolve plaintiff's entitlement to arbitrate an insurance coverage claim arising out of a January 13, 1994, automobile accident. In New Jersey Mfrs. v. O'Connell, 300 N.J.Super. 1, 692 A.2d 51 (App.Div.1997) (O'Connell I ), we ruled plaintiff was entitled to arbitrate his underinsured motorist (UIM) claim as an insured under NJM's policy. Now, in this declaratory judgment action plaintiff filed more than two years after the accident date, we must resolve the issue of plaintiff's claim for uninsured motorist (UM) coverage for the same accident under policies issued by both NJM and Parkway Insurance Company.

The trial judge entered judgment dismissing plaintiff's complaint to compel UM arbitration. The judge concluded, after a plenary hearing, plaintiff failed to prove he made all reasonable efforts to identify the motor vehicle and its owner, or operator, as required by N.J.S.A. 39:6-78. Plaintiff's threshold contention on appeal is that compliance with the statutory requisites is an issue for the arbitrator and not the court. Alternatively, he contends the trial judge's findings and conclusions are against the weight of the evidence. We affirm.

On January 13, 1994, O'Connell sustained injuries in a two-car accident. Ann Harpootlian was the driver of the second car. The accident occurred while O'Connell was road testing a 1987 GMC sport utility vehicle (SUV) for his employer, Jim Curley Pontiac-GMC Truck. State Leasing Corporation owned the SUV and had leased it to Hovson's Incorporated. As O'Connell drove the SUV north on Route 9 in Lakewood, Harpootlian's automobile collided with the SUV as she attempted to go south on Route 9 from a gas station driveway. Both drivers acknowledged there was a large truck along the curb in front of the gas station at the time. A police report indicated O'Connell complained of pain, refused medical attention, and drove away in the SUV.

At the time of the accident, O'Connell carried $300,000 in UM insurance coverage for his personal vehicle through Parkway. His policy also provided $300,000 in UIM coverage. Curley Pontiac had insurance, but it provided no UIM coverage to its employees. New Jersey Manufacturers (NJM) insured the GMC with Hovson's, a named insured. The NJM policy provided $1 million UM coverage and $1 million UIM coverage. Hartford Insurance Company insured the alleged tortfeasor, Harpootlian, under a policy with $250,000 liability limits.

On April 27, 1995, Hartford offered O'Connell the full amount of Harpootlian's coverage in return for a release of his claims against Harpootlian. O'Connell's counsel then advised NJM in writing of the offer to settle and O'Connell's intention to accept the offer. See Longworth v. Van Houten, 223 N.J.Super. 174, 538 A.2d 414 (App.Div.1988). The letter, similar to one sent to Parkway the same date, provided in part:

I know that you are aware that your options are to either permit Mr. O'Connell to accept the third party offer [of Hartford], in which case any right of subrogation [NJM] has will be extinguished or in the alternative, [NJM] may pay the $250,000.00 to Mr. O'Connell in return for his right to subrogate to his rights against Harpootlian and Hartford.

The ensuing events relevant to O'Connell I are set out in the reported decision and need not be reiterated here. O'Connell I was precipitated by NJM's December 13, 1995, declaratory judgment complaint that claimed Aubrey v. Harleysville Ins. Cos., 140 N.J. 397, 658 A.2d 1246 (1995), precluded plaintiff's entitlement to arbitrate his UIM claim under NJM's policy. On May 24, 1996, the trial judge entered a judgment which precluded arbitration. O'Connell appealed on June 18, 1996. On April 23, 1997, we ruled arbitration was required.

Shortly before the trial judge's resolution of O'Connell I, O'Connell's counsel, by letter to NJM's counsel, raised, for the first time, the potential of a UM claim based on the presence of the large truck. In the March 25, 1996, letter, O'Connell's counsel stated, "Please be advised that the claimant O'Connell may be making an uninsured motorist claim under the New Jersey Manufacturers coverage arising out of the accident of January 13, 1994." A May 13, 1996, certification of the New Jersey Department of Transportation disclosed a parking ban on Route 9 at the accident site. Subsequently, both NJM and Parkway rejected O'Connell's claim for UM coverage.

On August 28, 1996, by way of order to show cause, O'Connell commenced this action. The complaint sought a declaratory judgment directing defendants NJM and Parkway to arbitrate the UM claim. The defendants raised various defenses, one of which was O'Connell's failure to make reasonable efforts to identify the driver or owner of the large truck. See Norman v. Selective Ins. Co., 249 N.J.Super. 104, 592 A.2d 24 (App.Div.1991).

The UM endorsements of both defendants' policies contain similar arbitration clauses. The NJM policy issued to Hovson's in pertinent part provides:

If we and an insured disagree whether the insured is legally entitled to recover damages from the owner or driver of an uninsured motor vehicle ... or do not agree as to the amount of damages that are recoverable by that insured, then the matter may be arbitrated.

The Parkway policy in pertinent part provided:

If we and an "insured" do not agree:

1. Whether that person is legally entitled to recover damages under this [UM endorsement]; or

2. As to the amount of damages;

either party may make a written demand for arbitration.

The endorsements also included parallel standard coverage provisions, which agree to pay compensatory damages to an insured legally entitled to recover from the owner or operator of an uninsured vehicle for bodily injury or property damage sustained. Both policies require an insured to provide prompt notice of a claim.

On the return date of the order to show cause, the trial judge, relying on Norman, concluded he should hold a hearing on the reasonableness of O'Connell's efforts to ascertain the identity of the owner or driver of the large truck. At the hearing, O'Connell provided his version of the events that led to his belated UM claim. He testified his view of the gas station driveway was blocked by a "red tractor trailer" as he drove north on Route 9. He claimed Harpootlian unexpectedly came out of the driveway and the front of his SUV collided with the left side of her car. Immediately after the accident, O'Connell got out of the SUV. After he spoke with Harpootlian, who had driven her car to the opposite side of Route 9, he returned to the accident site to await the police. As he did so, the tractor trailer drove away. Due to the purported illegible condition of the truck's license plate, he could provide no license plate information other than it was white and out-of-state. He did not indicate whether the truck had any...