79 A.D.3d 791
N.Y. App. Div.2010Background
- Dana, a New Jersey resident, was involved in a Brooklyn car crash; the other driver’s policy settled for the policy limit of $50,000.
- Plaintiffs then sought damages under the supplementary underinsured motorist provision of Dana’s policy.
- A damages-only trial yielded a special verdict: $25,000 for Morris Dana’s past pain, $20,000 for Morris Dana’s future pain, and $5,000 for Susan Dana’s loss of services; a judgment for $50,000 against the defendant followed.
- Defendant moved under CPLR 4404(a) to set aside the verdict and for judgment as a matter of law on the theory that the $50,000 settlement exhausted the plaintiffs’ UIM recovery.
- The Supreme Court applied substantive New Jersey law, held plaintiffs were not entitled to UIM recovery because the verdict did not exceed the other driver’s policy limit, and dismissed the complaint by an amended judgment dated August 19, 2009.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether UIM recovery is available when the other driver’s policy limit equals the verdict. | Dana contends damages exceed UIM limits under policy. | Dana claims no UIM because settlement equals policy limit. | No UIM recovery because verdict did not exceed $50,000 limit. |
| Whether New Jersey law governs the UIM issue. | NJ law supports UIM recovery under the policy. | NJ law should apply; no recovery. | Court properly applied New Jersey law. |
| Whether the bad-faith denial claim was properly rejected. | Bad faith owed due to denial of benefits. | Denial supported by lack of entitlement. | Bad-faith claim rejected; no debatable reasons found. |
| Whether the May 13, 2009 order and the August 19, 2009 amended judgment were proper. | Order should overturn verdict. | Order correct; JMOL appropriate. | Amended judgment affirmed; order affirmed with costs. |
Key Cases Cited
- Matter of Allstate Ins. Co. [Stolarz — New Jersey Mfrs. Ins. Co.], 81 NY2d 219 (1993) (assignment of New Jersey law in insurance coverage disputes)
- Matter of State Farm Mut. Auto. Ins. Co. v Thomas, 75 AD3d 644 (2010) (NJ law applied to UIM determinations)
- NJ Stat Ann § 17:28-1.1, - (-) (statutory framework cited by court (note: statute, not a case))
- Selective Ins. Co. of Am. v Thomas, 179 NJ 616, 620, 847 A2d 578 (2004) (policy limits and UIM considerations in NJ)
- Vassiliu v Daimler Chrysler Corp., 356 NJ Super 447 (2002) (NJ superior court on UIM/coverage issues)
- Calabrese v Selective Ins. Co. of Am., 297 NJ Super 423 (1997) (NJ/UIM interpretation)
- Gold v Aetna Life & Cas. Ins. Co., 233 NJ Super 271 (1997) (NJ UIM principles and damages)
- Handwerker v Dominick L. Cervi, Inc., 57 AD3d 615 (2008) (adequacy of special verdict damages under insurance claims)
- Batts v Rutrick, 298 AD2d 417 (2002) (damages adequacy under verdicts)
- Obdulio v Fabian, 33 AD3d 418 (2006) (reiteration on damages and UIM)
- Pickett v Lloyd’s, 131 NJ 457 (1993) (bad-faith denial standards)
- American Wrecking Corp. v Burlington Ins. Co., 400 NJ Super 276 (2008) (bad-faith and insurer duties)
- M & B Apts., Inc. v Teltser, 328 NJ Super 265 (2000) (insurer liability standards)