New Jersey Mfrs. Ins. Co. v. Haran

• Decision Date: 14 May 1974
• Citation: 128 N.J.Super. 265,319 A.2d 768
• Parties: NEW JERSEY MANUFACTURERS INSURANCE COMPANY, Plaintiff-Appellant, v. Richard HARAN, Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 265

128 N.J.Super. 265

319 A.2d 768

NEW JERSEY MANUFACTURERS INSURANCE COMPANY, Plaintiff-Appellant, v. Richard HARAN, Defendant-Respondent.

Superior Court of New Jersey,

Appellate Division.

Submitted April 22, 1974.

Decided May 14, 1974.

Hughes, McElroy, Connell, Foley & Geiser, Newark, for plaintiff-appellant (Samuel D. Lord, Newark, of counsel).

Mandel, Wysoker, Sherman, Glassner, Weingartner & Feingold, Perth Amboy, for defendant-respondent (Harold A. Sherman, Perth Amboy, of counsel).

Before Judges CONFORD, HANDLER and MEANOR.

The opinion of the court was delivered by

MEANOR, J.A.D.

Richard Haran, the defendant, was on May 29, 1972 an insured of plaintiff New Jersey Manufacturers Insurance Company (NJM) under an automobile liability policy that contained uninsured motorists (UM) coverage. On that day Haran was in an automobile accident with one Henry Mason, an uninsured. Mason had a passenger in his car at the time of the accident, Henry Hodge.

Haran made claim under his uninsured motorists coverage for damages arising out of his own bodily injuries and automobile property damage. Hodge brought suit against Haran and Mason seeking damages on account of his personal injuries. NJM unsuccessfully sought from the Chancery Division a stay of arbitration between it and Haran until completion of the litigation begun by Hodge. NJM argued below and argues here that unless the arbitration is stayed it may be subjected to inconsistent results. The policy provisions involved are:

I. UNINSURED MOTORISTS COVERAGE (Damages for Bodily Injury and Property Damage Caused by Uninsured Highway Vehicles)

The company will pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured highway vehicle because of bodily injury or property damage, caused by accident and arising out of the ownership, maintenance or use of such uninsured highway vehicle; provided, for the purposes of this coverage, determination as to whether the insured or such representative is legally entitled to recover such damages, and if so the amount thereof, shall be made by agreement between the insured or such representative and the company or, if they fail to agree, by arbitration.

No judgment against any person or organization alleged to be legally responsible for the bodily injury or property damage shall be conclusive, as between the insured and the company, of the issues of liability of such person or organization or of the amount of damages to which the insured is legally entitled unless such judgment is entered pursuant to an action prosecuted by the insured with the written consent of the company.

VI. ADDITIONAL CONDITIONS

G. Arbitration.

If any person making claim hereunder and the company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured highway vehicle because of bodily injury or property damage to the insured, or do not agree as to the amount of payment which may be owing under this insurance then, upon written demand of either, the matter or matters upon which such person and the company do not agree shall be settled by arbitration, which shall be conducted in accordance with the rules of the American Arbitration Association unless other means of conducting the arbitration are agreed to between the insured and the company, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and the company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this insurance.

NJM's position is that if Haran is successful in arbitration, but is held liable to Hodge in the personal injury action, it will be put in the position of paying Haran on the thesis that the sole negligence was Mason's and paying Hodge on the theory that Haran's negligence was a cause of the accident. NJM also asserts that such an eventuality would destroy its subrogation rights against Mason for collection of its payments to Haran....