3070Court Deals With Question Of What "Is" Means
- Jul 14, 2014
WHEN POLICY EXCLUDES SOMEONE WHO "IS" COVERED UNDER ANOTHER POLICY,
"IS" ALSO INCLUDES "WAS"
It is now legendary that when former President Bill Clinton testified before a grand jury in 1998, he rationalized his repeated statements that "there is nothing going on between us" [himself and Ms. Lewinsky] by telling the jurors, "It depends on what the meaning of the word 'is' is...." He went on to explain that at the time he made the statements, his involvement with Ms. Lewinsky had ended, and the involvement was in the past; and that therefore, if the word "is" meant only the present, and not the past, and therefore did not also mean "was," he was telling the truth when he said it.
Recently, a Federal court dealt with the same question -- to wit, whether "is" also means "was" -- in an insurance context.
In Carla A. Caesar v Fireman's Fund Insurance Company (2012 WL 6594379), the U.S. District Court for New Jersey (William J. Martini, D.J) considered the following question on a motion for summary judgment: when an insurance policy excludes a person who "is" covered under another policy, does the word "is" also mean a person who "was" covered under another policy until those policy limits were exhausted?
On April 12, 1999, Plaintiff Carla Caesar rolled over in her father's SUV. Her insurance company, Esurance, provided Caesar with $15,000 in benefits. Hoping for an additional recovery, Caesar made a claim with her father's insurer, Fireman's Fund Insurance Company. Fireman's denied the claim. Caesar moved for summary judgment declaring her entitlement to Fireman's coverage; Fireman's cross-moved for the opposite declaration.
As the named insured on her Esurance policy, Caesar recovered $15,000. She also tried to recover under her father's policy, but Fireman's denied her claim. Fireman's argued that Caesar was not covered because she fell under the terms of a policy exclusion. That exclusion, Exclusion A.1.c., disclaims personal injury protection (“PIP”) coverage for anyone who “is entitled to New Jersey [PIP] Coverage as a named insured ... under the terms of another policy.”
"For present purposes [the Court stated], Caesar makes two arguments in support of her summary judgment motion. First, she argues that Exclusion A.1.c. does not apply to her. The Court disagrees. Second, she argues that Exclusion A.1.c. is invalid under New Jersey law. Even if Caesar were right about this latter point, the Court would not void the Exclusion. Instead, it would dial back the Exclusion to make it conform with New Jersey law. The dialed-backed Exclusion would still cover Caesar, so Caesar's second argument for summary judgment fails. Caesar is not entitled to benefits from Fireman's."
"Caesar falls under the terms of Exclusion A.1.c. With exceptions not relevant here, Exclusion A.1.c. applies where an insured 'is entitled to New Jersey [PIP] Coverage as a named insured ... under the terms of another policy.' At the time of the accident, Caesar was a named insured under her Esurance policy. Therefore, Caesar satisfied the terms of Exclusion A.1.c. She is not entitled to benefits from Fireman's."
"Caesar's argument to the contrary focuses on the Exclusion's use of the word 'is'. Exclusion A.1.c. applies if two conditions are met. An individual is excluded from coverage if she is (1) a named insured (2) who 'is entitled to ... [c]overage ... under the terms of another policy.'"
"Caesar does not dispute that she is a named insured under her Esurance policy. Instead, she disputes that she 'is' entitled to Esurance coverage. She acknowledges that she was entitled to Esurance coverage at the time of the accident. But she argues that her entitlement to coverage ended once she exhausted her policy. Caesar's argument is creative but incorrect."
"Exclusion A.1.c. is almost a word for word copy of N.J.S.A. 39:6A–7(b)(3). Exclusion A.1.c. applies if an insured 'is entitled to New Jersey [PIP] Coverage as a named insured....' Section 7(b)(3) also applies if an insured 'is entitled to [New Jersey PIP] coverage ... as a named insured.' Taking its lead from the Supreme Court of New Jersey's decision in Rutgers Cas. Ins. Co. v. Ohio Cas. Ins. Co., 153 N.J. 205, 208–10, 707 A.2d 1350 (1998), the Court concludes that the word 'is' in Exclusion A.1.c. has the same meaning as the word 'is' in Section 7(b)(3)."
"The facts in Rutgers are as follows: Following a series of car accidents, Rutgers honored claims from its named insureds. It then sought contribution from other companies, one of which was the Ohio Casualty Insurance Company. Like Fireman's in this case, Ohio argued that Rutgers' policy holders fell under the terms of an Ohio policy exclusion. That exclusion, referred to as the follow-the-family exclusion, reads as follows:The insurance under this endorsement does not apply to ... any person ... if that person is entitled to New Jersey [PIP] coverage as a named insured ... under the terms of another policy ....
"Rutgers' policy holders fell under the terms of the follow-the-family exclusion because they were named insureds whose Rutgers policies “entitled [them] to New Jersey [PIP] coverage.” Exclusion A.1.c. As Ohio did not owe Rutgers insureds' any money, Rutgers was not entitled to contribution. The Supreme Court of New Jersey recognized that this conclusion was 'consistent with and confirmed by' Section 7(b)(3). Ultimately, for purposes of the follow-the family exclusion and Section 7(b)(3), a named insured 'is entitled' to coverage from her insurer even after she recovers from that insurer.""Rutgers controls the outcome of this case. Caesar was a named insured on her Esurance policy at the time of the rollover. Before she recovered from Esurance, she was entitled to Esurance coverage for purposes of Exclusion A.1.c. Having now recovered from Esurance, she still 'is entitled' to Esurance coverage for purposes of Exclusion A.1.c. Caesar's entitlement to Esurance coverage excludes her from Fireman's coverage.""Caesar also argues that Exclusion A.1.c. is invalid because it sweeps more broadly than Section 7(b)(3) allows. Right or wrong, that argument does Caesar no good. If Exclusion A. 1.c. was impermissibly broad, the Court would dial it back to conform with Section 7(b)(3)... Section 7(b)(3) excludes from coverage those people who were named insureds at the time of their accident. Because Caesar was a named insured at the time of her accident, she satisfied the terms of the Section 7(b)(3) exclusion.""Ultimately, whether or not Exclusion A.1.c. is valid under New Jersey law, the outcome is the same: Caesar is not entitled to recover from Fireman's. Caesar's second argument for summary judgment fails.""For the foregoing reasons, there is no genuine issue of material fact: Caesar is not covered by her father's policy."Larry Rogak