Plaintiff Carole Zelig was injured in an automobile accident, while a passenger in a vehicle operated by a friend. She settled her personal injury claim against the tortfeasor and then filed an underinsured motorist (UIM) claim against the defendant Tower Group Companies, the carrier for a business partially owned by plaintiff. In Zelig v. Tower Group Companies, 2018 N.J. Super. Unpub. LEXIS 1217 (App. Div. May 25, 2018), the issue was whether the plaintiff qualified as an “insured” and should that determination be made by the court or by an arbitrator.
Defendant Tower Group Companies (“Tower”) issued its policy to This and That Uniform, LLC, a company partially owned by plaintiff. The legal issue to be determined was whether under the terms of the UIM endorsement the plaintiff was an “insured” under the basic insuring clause in the endorsement. Both parties filed for a summary judgment and the trial court judge ruled that the issue should be resolved in arbitration with the arbitrator resolving this legal question.
On appeal, the defendant carrier argued that the judge should not have required the parties to arbitrate whether the plaintiff qualifies as an “insured” under the endorsement. Defendant had asserted that plaintiff was not an “insured” because she was not occupying a covered vehicle as described in the endorsement. Rather, it contended this issue was a legal question that should have been decided by the judge.
The Appellate Division declined to exercise original jurisdiction to decide this issue. However, the Court agreed with the defendant carrier that the judge should have made this determination. The endorsement stated that “disputes concerning coverage . . . may not be arbitrated.” Thus, the Appellate Division found this dispute concerned coverage and reversed and remanded back to the trial court judge to decide the issue. The Court held that this issue was not one that should have been referred to an arbitrator to decide.
