Plain Meaning of Insurance Contract Prevails in New Jersey

In the recent unreported decision of Chery v. New Jersey Indemnity Insurance Company, plaintiff Michelle Chery was injured in a hit-and-run motor vehicle accident, and sought compensation through an uninsured motorist claim against New Jersey Indemnity Insurance Company. Pursuant to the policy, plaintiff was entitled to $15,000 in UM coverage and was expressly contracted to be bound by an arbitration award unless it exceeded $15,000.

The parties proceeded to arbitration, where an award of $17,500 was awarded to the plaintiff. Defendant appealed and filed for a trial de novo. Plaintiff filed a complaint to confirm the arbitration award, and a motion for summary judgment. In her motion, plaintiff argued that, because the mandatory minimum liability limit specified by the Financial Responsibility Law of New Jersey, and the actual liability limit of defendant’s policy are the same ($15,000), the contract provision does not permit defendant to appeal the award or demand a trial de novo.

The Appellate Court disagreed with plaintiff’s argument, noting that the policy contained no provision, expressed or implied, that the plain language was inapplicable where the UM limit of the policy and the minimum for liability specified by the Financial Responsibility Law were the same. Since the language of the policy was unambiguous, defendant was legally entitled to reject the arbitration award and proceed to trial.

Thanks to Heather Aquino for her contribution to this post.