MANUEL SANCHEZ VS. PORFIRIO I. RAMON (L-8597-12, MIDDLESEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0079-19T3

MANUEL SANCHEZ and
YOLANDA SANCHEZ,
his wife,

Plaintiffs-Appellants,

v.

PORFIRIO I. RAMON,
MARIA E. RAMON, and
NEW JERSEY TURNPIKE
AUTHORITY,

Defendants,

and

NEW JERSEY MANUFACTURERS
INSURANCE COMPANY,

Defendant-Respondent.
________________________________

Argued telephonically September 14, 2020 –
Decided October 6, 2020

Before Judges Messano and Hoffman.
 On appeal from the Superior Court of New Jersey, Law
Division, Middlesex County, Docket No. L-8597-12.

Thomas De Seno argued the cause for appellants.

John A. Camassa argued the cause for respondent
(Camassa Law Firm, PC, attorneys; John A. Camassa,
of counsel; Christopher M. Brady, on the brief).

PER CURIAM

This dispute concerning underinsured motorist (UIM) coverage returns to

us after our remand. See Sanchez v. N.J. Tpk. Auth., No. A-1969-15 (November

16, 2017) (Sanchez I). We assume the reader's familiarity with our prior

decision, where we vacated the order granting summary judgment in favor of

New Jersey Manufacturers Insurance Company (NJM) and remanded the matter

for a plenary hearing to decide material factual disputes. Id. (slip op. at 10).

Following a period of additional discovery, Judge Phillip Paley conducted

a plenary hearing, where he received the testimony of four witnesses connected

to the New Jersey Turnpike Authority (the Authority) – two employees and two

insurance representatives. After assessing the testimony of these witnesses and

reviewing the trial record, the judge issued a comprehensive written opinion

resolving the material factual disputes. Based on these rulings, the judge again

concluded that plaintiffs "are not entitled to UIM benefits from NJM for the

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2011 collision." This appeal followed. Following our review of the record and

the parties' briefs, in light of the applicable principles of law, we affirm.

A trial court's findings of fact are binding on appeal if supported by

"adequate, substantial, and credible evidence." Rova Farms Resort, Inc. v. In'vrs

Ins. Co. of Am., 65 N.J. 474, 484 (1974). Such findings made by a judge in a

bench trial "should not be disturbed unless they are so wholly insupportable as

to result in a denial of justice." Id. at 483-84. Factual findings that "are

substantially influenced by [the judge's] opportunity to hear and see the

witnesses and to have the 'feel' of the case" enjoy deference on appeal. State v.

Johnson, 42 N.J. 146, 161 (1964).

To recap, there was no dispute that plaintiffs' NJM policy provided

$300,000 in UIM coverage. Nor was there any dispute that, "pursuant to the

language of the NJM policy, NJM's coverage was excess to that provided by the

Authority." Sanchez I, (slip op. at 7). The critical dispute concerned whether

the Authority provided $15,000 or $2 million in UIM coverage at the time of the

subject accident. At the plenary hearing, plaintiffs conceded they had the burden

of proof on remand.

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 Although self-insured, starting in 2003, the Authority procured an excess

policy from Chartis Claims, Inc. (Chartis) for claims over $2 million. We

previously noted,

Endorsement No. 23 of that policy, which was titled
"Uninsured/Underinsured Motorists Coverage
Endorsement," could be construed to mean that Chartis
was providing UIM coverage for occupants of the
Authority's vehicles on an excess basis, and that the
Authority was self-insured for $2 million in UIM
coverage. The endorsement included the following
sentence: "Uninsured/Underinsured Motorists Retained
Limit $2,000,000 INSURING AGREEMENT." The
Authority's position was that the Chartis policy only
covered third-party claims, not UIM claims. The
Authority contended that Endorsement No. 23,
including the retained limit language concerning UIM
coverage, was insurance company boilerplate, which
was not applicable to the type of coverage the Authority
had purchased from Chartis and should not have been
included in the policy.

[Sanchez I, (slip op. at 3-4).]

On February 15, 2012, an internal memo of the Authority acknowledged

the confusion over its own UM/UIM limits and that its self-insured retention

(SIR) limits were never formalized. The memo recommended the Authority

explicitly establish SIR limits of $250,000/$500,000 for UM/UIM coverage and

delete the UM/UIM endorsement in the Chartis umbrella policy. On February

28, 2012, Authority commissioners authorized the Executive Director to amend

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the Authority's excess policy to "clarify" the UM/UIM limit within the

Authority's SIR and remove the UM/UIM endorsement in the Chartis umbrella

policy. Notwithstanding this authorization, the Authority once again approved

the renewal of the Chartis umbrella policy, containing the UM/UIM

endorsement, for the 2013-2014 policy period. 1

At the plenary hearing, plaintiffs failed to identify any cases where the

Authority settled for its asserted UM/UIM limits of $15,000/30,000. In contrast,

NJM identified four cases (including the matter under review) where the

Authority acted in conformity with the language contained in the Chartis excess

policy, by providing UM/UIM benefits in excess of its purported $15,000 self-

insured limits.

In DiCandia v. NJTA, the Authority paid $280,000 in settlement of the

plaintiff's UM claim arising from a 2004 auto accident, notwithstanding the

Authority's position that it provided UM/UIM limits of only $15,000. The

Authority approved this settlement on October 22, 2013.

1
Later, at the Authority's request, a retroactive Deletion Endorsement was
added to the February 1, 2013 to February 1, 2014 Chartis excess policy period.
The Deletion Endorsement was added in October of 2014 to retroactively delete
the UM/UIM endorsement, effective February 1, 2013.
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 In Powell v. NJTA, the Authority approved payment of "the limit of its

self-insured retention, $2 million, and the Authority's excess carrier, Chartis,

would contribute a total of $1 million" in settlement of the plaintiff's UIM claim

arising from a 2008 auto accident, notwithstanding the Authority's position that

it provided UM/UIM limits of only $15,000. The Authority approved this

settlement on November 28, 2012.

In the matter under review, the Authority again paid an amount well in

excess of its claimed $15,000 UM/UIM limits. Consistent with its prior

practices, the Authority paid $67,000 in settlement of plaintiffs' UIM claim,

notwithstanding the Authority's position that it provided UIM limits of only

$15,000. The Authority approved this settlement on August 25, 2015.

In Renna v. NJTA, the Authority approved payment of $400,000 to settle

the plaintiff's UIM claim. Of note, the accident occurred in 2013, after the

Authority decided to "clarify" its UM/UIM SIR limits of $250,000/$500,000 and

during the policy period when the Authority sought to retroactively delete the

UM/UIM endorsement in the Chartis umbrella policy. The underinsured

motorist in Renna had liability limits of $100,000. Accordingly, the Authority's

maximum exposure on the plaintiff's UIM claim, based on the Authority's

asserted limits, was $150,000. Consistent with its past practices, however, the

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Authority paid $400,000. The Authority approved the settlement on November

21, 2017, five days after we decided Sanchez I.

Two Authority representatives testified that they believed the Authority

provided $15,000/$30,000 in UM/UIM benefits at the time of the subject

accident; however, the Authority failed to produce any pre-accident documents

confirming this position. The only supporting documentation was generated

after the subject accident, purporting to "retroactively" confirm the Authority's

position of $15,000/$30,000 in UM/UIM coverage. Therefore, the testimony

provided by the Authority representatives was properly subject to Judge Paley's

credibility determinations.

Judge Paley determined that plaintiffs' primary witness, John O'Hern, the

Authority's former chief operating officer (COO), was not credible in his

explanation of the Authority's past settlements; in addition, the judge described

Mr. O'Hern's "experience with, and knowledge of, insurance" as "limited."

Marianne Zach, an attorney with the Authority's law department, also testified.

Judge Paley found credible Ms. Zach's testimony about the procurement of the

Chartis policy; however, he did not credit her testimony that the risk of litigation

explained the multiple settlements in excess of the Authority's purported

coverage.

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 Edward Papierowicz, an assistant vice president with Authority's

insurance broker, testified that he placed the Chartis policy for the Authority

from 2003 through 2011. During that period, each year, the Chartis policy had

a $2 million attachment point and included the UM/UIM endorsement. He

testified regarding the Underwriting Data Form completed by the Authority in

connection with the application for the Chartis excess policy. Under

"Automobile Liability incl. UM/UIM," the Authority listed its underlying

coverage as: "$2 MILLION EACH OCCURRENCE, SELF-INSURED." The

judge found the testimony of Mr. Papierowicz credible.

Vivian Cardamone, an underwriter and assistant vice president with

Chartis, had fifteen years of experience working on the Authority's excess

policy. She recounted that Mr. Papierowicz requested the UM/UIM excess

umbrella policy. Ms. Cardamone testified that Mr. Papierowicz never raised

any concerns regarding the initial policy or any renewal, nor did she believe that

Endorsement No. 23 contained a mistake. The judge described the testimony of

Ms. Cardamone as "highly credible."

Based on the witness testimony presented, Judge Paley made credibility

determinations supported by the record. He noted that the only evidence

presented on remand was that the Authority settled UM/UIM claims in

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conformance with SIR UM/UIM limits of $2,000,000. Judge Paley found

plaintiff's primary witness, the Authority's former COO, was not credible in

explaining previous settlements, finding no credible basis for his contention that

the Authority's limits were $15,000. Judge Paley further found that the

Authority never established a "policy" as to its UIM limits, and certainly none

was documented on remand.

As to the Authority's review of its policies, the judge found Mr. O'Hern's

credibility diminished because the Authority maintained the Chartis policy since

2003 and settled cases well in excess of its claimed $15,000/$30,000 UM/UIM

limits during that time.

The [Authority's] claimed UM/UIM limits of
[$15,000/$30,000] were never approved by its Board.
The cited settlements reflect the [Authority's]
acknowledgement that the available UM/UIM limit was
the retained limit set forth in the Chartis endorsement,
even after 2012, when the [Authority] 'formally' set the
limit at $250,000. The [Authority] has never
established a 'policy' . . . limiting UM/UIM benefits to
[$15,000/$30,000]. The inexorable conclusion is that
the [Authority's] self-insured UM/UIM limit in effect
in 2011 was $2 million.

The judge went on to point out the Authority repeatedly renewed the Chartis

policy, despite its own extensive experience in insuring vehicles, and "failed to

examine the Chartis policy (or, at least, its clear declaration page) in detail."

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 As for the Authority's position that its excess settlements were to avoid

"risks," the judge found "[i]n at least two cases the risks were non -existent." In

plaintiff's case, applying the Authority's $15,000/$30,000 limit, "plaintiff was

not underinsured according to N.J.S.A. 17:28-1.1(e)(1)"; nevertheless, "without

challenging the issue, the [Authority's] Board approved a $67,000 settlement. "

Moreover, in one of the cited settlements, the judge found the Authority

approved paying $2 million, the full amount of the disputed UM/UIM SIR under

the Chartis policy.

The judge found no basis to reform any contract, noting that if there was

a mistake on the Authority's part, it was unilateral; therefore, reformation was

not justified. Furthermore, the judge observed the Authority's "history of

settlements suggests that it understood that its UIM limit was reflected in the

Chartis policy. There is no evidence of mistake, mutual . . . or unilateral."

For those reasons, the judge held NJM's insurance was excess to the

Authority's UM/UIM limits, which he found was $2 million on the date of the

subject accident. Therefore, he entered the order under review, providing that

"plaintiffs shall receive no UIM benefits . . . from [NJM]" and dismissed

plaintiffs' complaint with prejudice and without costs.

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 On appeal, plaintiffs contend Judge Paley ignored the testimony of the

Authority's COO and staff attorney, who both testified the Authority had a

$15,000/$30,000 UM/UIM SIR at the time of plaintiffs' accident and that it did

not include a $2 million UM/UIM SIR in its application for excess insurance.

This argument lacks merit. The judge did not ignore this testimony ; to the

contrary, he directly addressed the testimony and fully explained his reasons for

not finding the testimony credible.

The record supports the judge's determination that the Authority's

witnesses were not credible regarding its UM/UIM SIR at the time of plaintiff's

accident. The Authority's other UIM settlements, along with its procurement

and consistent renewal of the Chartis umbrella policy listing $2 million as its

SIR for UM/UIM claims, all cast doubt on the testimony asserting the

Authority's UIM SIR was $15,000/$30,000.

The record is devoid of any credible evidence that the Authority

maintained a SIR of $15,000/$30,000 for UM/UIM coverage at the time of the

subject accident. In contrast, the testimony of the Authority's insurance broker

and the Chartis vice president provided strong support for the judge's

determination that the Authority maintained an SIR of $2 million for UM/UIM,

at all relevant times. Because the judge's factual findings and credibility

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determinations are supported by the record, we are satisfied he reached the

correct result.

Plaintiffs' remaining arguments lack sufficient merit to warrant discussion

in a written opinion. R. 2:11-2(e)(1)(E).

Affirmed.

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