Passaro v. Metropolitan Property and Liability Ins. Co.
| Decision Date | 12 April 1985 |
| Citation | 128 Misc.2d 21,487 N.Y.S.2d 1009 |
| Parties | Dean PASSARO and Kilo Smith, Plaintiffs, v. METROPOLITAN PROPERTY AND LIABILITY INSURANCE COMPANY, Defendant. |
| Court | New York Supreme Court |
In this action the plaintiffs demand judgment against the defendant insurer declaring that the underinsured coverage provided for in the policy issued to Robert M. Jewell and Mary Jewell, the named insureds, be applied to the benefit of the plaintiffs herein. A nonjury trial was held before this court on December 3, 1984, at which time the parties stipulated to an agreed statement of facts as follows:
On August 19, 1979, Kilo Smith and Dean Passaro were passengers in a motor vehicle owned by Robert M. Jewell and operated with the knowledge, permission and consent of the owner by his son. The Jewell vehicle, on the date of the accident, was covered by a policy of automobile liability insurance issued by Metropolitan Property & Liability Insurance Company with single-limit automobile liability coverage of $300,000.00. Said policy of insurance provided for qualified insureds underinsured motorist coverage in the amount of $100,000.00 per person and $300,000.00 per occurrence.
On the aforementioned date, the Jewell vehicle was involved in a collision with a vehicle owned and operated by Mark Patchin. On the date of the accident, the Patchin vehicle was insured by Boston Old Colony Insurance Company by a policy of automobile liability insurance with applicable policy limits of $10,000.00 per person and $20,000.00 per occurrence. Thus the aggregate limits of the Jewell liability coverage and the Patchin liability coverage is $320,000.00 which exceeds the 100,000-300,000 underinsured coverage on the Jewell vehicle.
The collision between the two motor vehicles was due to the fault of the operators of both vehicles, and was due, in no way, to any fault on the part of the passengers, Smith and Passaro. Smith and Passaro were both injured in the accident.
After the commencement of litigation to recover for their personal injuries, Smith and Passaro settled both their personal injury claims with the liability carriers for both vehicles, and for the purposes of this agreed statement of facts, it is to be presumed that all available liability insurance from parties responsible for the happening of the accident have been exhausted, and both liability carriers paid to the injured parties the full amount of their policies; namely, $300,000.00 and $20,000.00.
It is also presumed, for the purposes of this agreed statement of facts, that Metropolitan Property & Liability Insurance Company gave its consent to the settlement of the Smith and Passaro claims with respect to the two liability policies, reserving the issue of whether Smith and Passaro are entitled to be paid any underinsured motorist benefits to the Courts.
Section 167 (2-a) of the Insurance Law (renumbered effective September 1, 1984), Insurance Law, § 3420(f) ] was amended in 1977 to require that persons insured under automobile insurance policies issued in this State are offered the option of purchasing a type of coverage called "supplementary uninsured motorists insurance", commonly referred to as underinsured motorist coverage. The statute further provides:
"Supplementary uninsured motorist insurance shall provide coverage, in any state or Canadian province, if the limits of liability under all bodily injury liability bonds and insurance policies of another motor vehicle liable for damages are in a lesser amount than the bodily injury liability insurance limits of coverage provided by such policy." (Emphasis added.)
Under their insurance policy with the defendant insurer, the Jewells opted for supplementary uninsured motorist coverage to the $100,000/$300,000 maximum limits provided by the Statute. As passengers in the Jewell vehicle, the plaintiffs contend that because of the limits of the uninsured/underinsured motorist coverage afforded the Jewells are greater than the $10,000/$20,000 limits of tortfeasor Patchin's liability insurance, which were fully exhausted, the Patchin vehicle was "underinsured" and the above-quoted supplementary uninsured motorist clause applies in their favor. Plaintiffs argue that their settlement with the drivers of the two vehicles involved in the accident for $320,000.00 consisting of the full $20,000.00 limits of the underinsured's (Patchin) liability insurance and the $300,000.00 liability limits of the host driver, does not preclude the plaintiff-passengers from recovering an additional payment under the uninsured/underinsured motorist provisions of the Metropolitan policy.
In contrast, Metropolitan relies upon a provision in the endorsement contained in the insurance contract providing that the insurer shall set off all sums paid to the claimant by the carriers for the underinsured and insured joint tortfeasor(s) from the policy limits of the uninsured/underinsured motorist benefits. Citing this provision in its policy, Metropolitan takes the position that the injured plaintiffs cannot proceed under the endorsement because their total recovery of $320,000.00 from the underinsured and insured joint tortfeasor carriers exceeds the $100,000.00 policy limits of the uninsured/underinsured motorist coverage, and that payment of such additional benefits would thus be duplicative of the compensation received by the plaintiffs in exhausting the liability limits covering both the Patchin and Jewell vehicles. The defendant challenges the plaintiffs' claim as an attempt to "stack" the underinsured motorist coverage above the sums received from these other sources.
From the above, it appears that a conflict exists between the uninsured motorist law (Insurance Law, § 3420[f] ) and defendant's insurance policy to the extent that the policy affords the uninsured motorist carrier the right to offset from uninsured/underinsured protection all sums received by the insured from persons jointly or severally liable with the owner or operator of the uninsured/underinsured vehicle.
Insurance Law (§ 3420[f] ) mandates that any provisions contained in a policy issued in accordance with the aforesaid statute shall be construed as if the provisions of the statute were embodied therein. The legislature did not provide in the statute (in contrast to payments by the Motor Vehicle Accident Indemnification Corporation [Insurance Law § 5210(b)(2) ] ) for reduction of underinsured motorist limits by the amount paid by the person jointly or severally liable with the...
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