Vassiliu v. Daimler Chrysler Corp.

• Decision Date: 22 January 2004
• Citation: 178 N.J. 286,839 A.2d 863
• Parties: Christine R. VASSILIU, individually, as General Administratrix and as Administratrix ad Prosequendum of the Estate of Hristos Vassiliu, Deceased and as Guardian ad Litem for Christina R. Vassiliu, a minor, Plaintiff-Respondent, v. DAIMLER CHRYSLER CORPORATION, Mt. Ephraim Dodge, Inc., Shaun L. O'Brien, Scott Rhodes, John Does # 1-5, (fictitious names of drivers of vehicles involved in the subject collision); John Does # 6-10, (fictitious names of owners of vehicles involved in the subject collision and or employers of any drivers); John Does # 11-20, (fictitious names of individuals, sole proprietorships, partnerships, corporations or governmental entities involved in the retail sale, distribution, assembly, installation, design, repair, maintenance, manufacture or wholesale of the subject, product and/or any of its component parts); John Does # 21-25, (fictitious names of individuals, sole proprietorships, partnerships, corporations or governmental entities who repaired the product); John Does # 26-30, (fictitious names of individuals, sole proprietorships, partnerships, corporations or governmental entities who inspected the product); jointly, severally, or in the alternative, Defendants. Christine R. Vassiliu, as General Administratrix and as Administratrix ad Prosequendum of the Estate of Hristos Vassiliu, Deceased, Plaintiff-Respondent and Cross-Appellant, v. Prudential Property & Casualty Insurance Company, Defendant-Appellant and Cross-Respondent, and Selective Insurance Company, Defendant-Respondent and Cross-Respondent, and Parkway Insurance Company, Defendant.
• Court: New Jersey Supreme Court

839 A.2d 863

178 N.J. 286

Christine R. VASSILIU, individually, as General Administratrix and as Administratrix ad Prosequendum of the Estate of Hristos Vassiliu, Deceased and as Guardian ad Litem for Christina R. Vassiliu, a minor, Plaintiff-Respondent, v. DAIMLER CHRYSLER CORPORATION, Mt. Ephraim Dodge, Inc., Shaun L. O'Brien, Scott Rhodes, John Does # 1-5, (fictitious names of drivers of vehicles involved in the subject collision); John Does # 6-10, (fictitious names of owners of vehicles involved in the subject collision and or employers of any drivers); John Does # 11-20, (fictitious names of individuals, sole proprietorships, partnerships, corporations or governmental entities involved in the retail sale, distribution, assembly, installation, design, repair, maintenance, manufacture or wholesale of the subject, product and/or any of its component parts); John Does # 21-25, (fictitious names of individuals, sole proprietorships, partnerships, corporations or governmental entities who repaired the product); John Does # 26-30, (fictitious names of individuals, sole proprietorships, partnerships, corporations or governmental entities who inspected the product); jointly, severally, or in the alternative, Defendants.

Christine R. Vassiliu, as General Administratrix and as Administratrix ad Prosequendum of the Estate of Hristos Vassiliu, Deceased, Plaintiff-Respondent and Cross-Appellant, v. Prudential Property & Casualty Insurance Company, Defendant-Appellant and Cross-Respondent, and Selective Insurance Company, Defendant-Respondent and Cross-Respondent, and Parkway Insurance Company, Defendant.

Supreme Court of New Jersey.

Argued October 21, 2003.

Decided January 22, 2004.

Daniel J. Pomeroy, Springfield, argued the cause for appellant and cross-respondent (Mortenson and Pomeroy, attorneys; Mr. Pomeroy and Karen E. Heller, New York City, on the briefs).

Louis J. DeVoto, Cherry Hill, argued the cause for respondent and cross-appellant (Ferrara, Rossetti & DeVoto, attorneys; Mr. DeVoto and Jennifer A. Deiter, on the brief).

Stephen G. Sobocinski, argued the cause for respondent and cross respondent (Tucker & Munyon, attorneys).

Susan Stryker, Trenton, submitted a brief on behalf of amici curiae Alliance of American Insurers, American Insurance Association, National Association of Independent Insurers and Insurance Council of New Jersey (Sterns & Weinroth, attorneys; Ms. Stryker and Mitchell A. Livingston, on the brief).

Kevin Haverty, on behalf of amicus curiae The Association of Trial Lawyers of America-New Jersey, relied up on the brief submitted to the Appellate Division (Williams, Cuker & Berezofsky, attorneys).

Justice VERNIERO delivered the opinion of the Court.

This is an insurance coverage case. Plaintiff commenced a survival action and wrongful death action arising out of her husband's death due to an automobile accident. Specifically, the decedent died of injuries that he had sustained when his van was struck by another vehicle. The principal question is whether plaintiff's actions trigger separate "per person" coverage claims under a split limit insurance policy or whether the claims are subject to a single limit. A second question is whether the insurers are entitled to a credit for an amount received by plaintiff in settlement of claims against the manufacturer and seller of the decedent's van.

The Appellate Division concluded that, because survival and wrongful death actions legally are distinct, they each trigger a separate "per person" limit. As for the second question, the court found that the insurers were entitled to set off an amount otherwise owed as underinsured motorist coverage with the amount that plaintiff had received in settlement of claims asserted against two of the non-insurer defendants. Based on the unambiguous language found in the applicable policies, we reverse the Appellate Division's judgment in respect of the "per person" limit question. We affirm that court's judgment insofar as the setoff question is concerned.

I.

On June 24, 1995, Hristos Vassiliu was driving his van in a southerly direction on Route 553 in Franklin Township, Gloucester County. At the same time Shaun O'Brien was driving a vehicle in a westerly direction on Route 604, which intersects Route 553. The O'Brien vehicle collided with the Vassiliu vehicle after O'Brien apparently had ignored a red-blinking light and stop sign that controlled the intersection on the side of Route 604. Vassiliu died of his injuries.

At the time of the crash the decedent's wife was pregnant with the couple's first child. In her capacity as General Administratrix for the decedent's estate and as Administratrix Ad Prosequendum for the decedent's heirs (collectively, plaintiff), the decedent's wife filed a personal injury complaint consisting of a survival action and a wrongful death action, naming O'Brien as a defendant. Based on a products liability theory of recovery, plaintiff also sued the manufacturer and seller (separate corporate entities) of the decedent's van.

O'Brien was insured under two liability policies. The first policy was a $35,000 single limit policy issued by New Hampshire Insurance Company (New Hampshire), and the second was a $15,000 "per person" and $30,000 "per accident" split limit policy issued by Prudential Property & Casualty Insurance Company (Prudential). In addition, the decedent was covered by underinsured motorist (UIM) coverage under policies issued by Prudential and Selective Insurance Company (Selective). Those policies also consisted of split limit coverage but in larger amounts, $100,000 "per person" and $300,000 "per accident."

The "per person" provision in Prudential's liability policy provides:

Amount - Bodily Injury: Each Person

The amount shown on the Declarations Page under "Bodily Injury - Each Person" is the limit of our liability under this part for all damages, including damages for care or loss of services, arising out of bodily injury to one person as a result of any one accident.

As for Prudential's UIM provision, there is language nearly identical to the "per person" language in the insurer's liability policy. Selective's UIM provision contains similar language. (Although, as will be seen below, that language refers solely to "Uninsured Motorists Coverage," the policy states elsewhere that it includes UIM coverage.) Selective's policy provides, in relevant part:

LIMIT OF LIABILITY

The limit of Bodily Injury Liability shown in the Schedule or in the Declarations for each person for Uninsured Motorists Coverage is our maximum limit of liability for all damages, including damages for care, loss [of] services or death, arising out of "bodily injury" sustained by any one person in any one accident.

The policies also include provisions concerning whether the UIM carriers are entitled to credits or setoffs for settlements. Prudential's policy provides that "[t]he amount we agree to pay under this part will be reduced by any amount recoverable from persons responsible for [an] accident[.]" In the same vein, Selective's policy states that "the limit of liability [for UIM coverage] shall be reduced by all sums ... [p]aid because of the `bodily injury' or `property damage' by or on behalf of persons or organizations who may be legally responsible."

Around the time of jury selection the products liability defendants settled for $215,000 without admitting liability. The matter then proceeded without a jury. During the trial O'Brien filed for bankruptcy. Plaintiff eventually agreed that O'Brien's damages would be limited to the proceeds from that defendant's insurance policies, and the bankruptcy court permitted the trial to proceed.

The trial resulted in a finding that O'Brien was one hundred percent negligent. The court awarded damages in the amount of $175,000 for the survival action and $1,750,000 for the wrongful death action, in addition to funeral expenses. New Hampshire ultimately paid $35,000, the full amount due under its liability policy, and Prudential paid $15,000 from its liability policy. As noted, plaintiff also received $215,000 from the products liability settlement.

Plaintiff also sought an additional $15,000 from the Prudential liability policy, arguing that the survival and wrongful death actions each qualified for the "per person" coverage. On the same grounds, plaintiff filed a declaratory judgment action seeking the $100,000 "per person" amount from Prudential's and Selective's UIM policies. The parties do not question the trial court's determination that, in this case, "[t]he limits of multiple available UIM policies are not stacked. Instead, any recovery is prorated between the applicable UIM policies in the same proportion as the limits of each bears to the total of the limits of all available UIM policies." Vassiliu v. Daimler Chrysler Corp., 356 N.J.Super. 546, 549 n. 1, 813 A.2d 608, 610 n. 1 (Law Div.2000) (citing N.J.S.A. 17:28-1.1c).

The trial court agreed with plaintiff in all respects. It reasoned that "wrongful death actions and survival actions are treated as separate and discrete actions affording different damages remedies to different parties, even though they may arise from the identical occurrence the death of a family member from injuries sustained in a vehicular accident." Id. at 548, 813 A.2d at 610. The court further explained that

since the coverage limits of the Prudential liability insurance policy at issue in this case are $15,000/$30,000, a total of $30,000 is available: $15,000 for the wrongful death action, and $15,000 for the survival action. Similarly, since the coverage limits of the Prudential and Selective UIM policies at issue are each $100,000/$300,000, a total of $200,000 in UIM coverage is available: $100,000 for the wrongful death action, and $100,000 for the survival action.

[Id. at 548-49, 813 A.2d at 610.]

The trial court reduced the UIM amount by the amounts obtained under O'Brien's liability...