NOT FOR PUBLICATION WITHOUT THE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-1637-19
YVONNE ZABALA-LUGO,
Plaintiff-Appellant,
v.
STILLWATER PROPERTY &
CASUALTY INSURANCE
COMPANY,1
Defendant-Respondent.
__________________________
Submitted January 4, 2021 – Decided July 2, 2021
Before Judges Currier and DeAlmeida.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-6956-18.
Blume, Forte, Fried, Zerres & Molinari, PC, attorneys
for appellant (Jeffrey J. Zenna, on the brief).
Traub Lieberman Strauss & Shrewsberry, LLP,
attorneys for respondent (Gregory S. Pennington, on
the brief).
1
Improperly pled as Stillwater Insurance Group.
PER CURIAM
Plaintiff Yvonne Zabala-Lugo appeals from the November 21, 2019 order
of the Law Division granting summary judgment in favor of defendant,
Stillwater Property & Casualty Insurance Company (Stillwater), finding that the
umbrella insurance policy purchased by Zabala-Lugo from Stillwater was
unambiguous in its exclusion of underinsured motorist (UIM) coverage. We
affirm.
I.
The following facts are derived from the record. Zabala-Lugo purchased
an insurance policy from Skylands Insurance Association (Skylands) that served
as her primary home and auto insurance policy, including UIM coverage.
Zabala-Lugo also purchased an umbrella liability policy from Stillwater.
The declaration coverage page of the Stillwater policy contains a schedule of
the underlying insurance coverage Stillwater required Zabala-Lugo to maintain
during the term of the Stillwater policy. With respect to UIM coverage, the
required coverage column is blank, Stillwater's coverage is described as
"[a]vailable in states where required by law[,]" and the required underlying
coverage limit is described as "[l]imit must be the same as that [c]arried for
[a]utomobile [l]iability." New Jersey does not require UIM coverage. The
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2
Stillwater policy also contains a "summary of current coverages," that does not
include UIM coverage.
In addition, the policy's coverage form provides as follows:
Coverages
A. Insuring Agreement
We will pay damages, in excess of the "retained limit,"2
for:
1. "Bodily injury" or "property damage" for which
an "insured" becomes legally liable due to an
"occurrence" to which this insurance applies . . . .
....
III. Exclusions
A. The coverages provided by this policy do not
apply to:
....
13. "Bodily injury" or "personal injury" to you or a
"family member".
This exclusion also applies to any claim made or suit
brought:
2
The Stillwater policy defines "retained limit" as "[t]he total limits of any
'underlying insurance' and other insurance that applies to an 'occurrence' or
offense which . . . [a]re available to an 'insured; or [w]ould have been available
except for the bankruptcy or insolvency of an insurer providing 'underlying
insurance'; or . . . [t]he deductible" of the underlying insurance if covered by the
Stillwater policy and not by any available underlying coverage.
A-1637-19
3
a. To repay; or
b. Share damages with;
another person who may be obligated to pay damages
because of "bodily injury" or "personal injury" to you
or a "family member" . . . .
....
C. We do not provide:
1. Automobile no-fault or any other similar
coverage under this policy; or
2. Uninsured Motorists Coverage, Underinsured
Motorists Coverage, or any other similar coverage
unless this policy is endorsed to provide such coverage.
There is no endorsement in the policy providing UIM coverage.
In 2014, Zabala-Lugo was a passenger in a car driven by Jasmine Lugo
when the vehicle was involved in an accident. According to Zabala-Lugo, the
driver of her vehicle struck a phantom car that had swerved into her lane to avoid
hitting a pedestrian. After the initial impact, the vehicle in which Zabala-Lugo
was a passenger was struck from behind by a car driven by Betsey Tavares.
Zabala-Lugo discovered that Tavares's insurance policy did not provide
bodily injury liability insurance. Zabala-Lugo thereafter notified Stillwater that
A-1637-19
4
she intended to file an UIM claim under her policy. Stillwater informed Zabala-
Lugo that her policy did not provide UIM coverage.
Zabala-Lugo later contacted Stillwater to notify the company that
Skylands had offered $100,000 to settle her UIM claim under her underlying
policy and that she intended to file an UIM claim under her Stillwater policy.
She also requested that Stillwater waive its subrogation rights.
On May 25, 2018, Stillwater denied Zabala-Lugo's claim because her
policy did not include UIM coverage. Stillwater further advised that because
Zabala-Lugo did not have UIM coverage she did not need to request its consent
to accept the Skylands settlement.
Zabala-Lugo subsequently filed a complaint in the Law Division seeking
a declaratory judgment that her Stillwater policy included UIM coverage.
Stillwater subsequently moved for summary judgment.
On November 21, 2019, the trial court issued a written opinion and order
granting Stillwater's motion and dismissing Zabala-Lugo's complaint. The court
found that the Stillwater policy unambiguously stated it did not provide UIM
coverage and that Zabala-Lugo could have no reasonable expectation of having
obtained such coverage. The court rejected Zabala-Lugo's "strained
A-1637-19
5
interpretation" of the Stillwater policy and her argument that public policy
required the court to read UIM coverage into the Stillwater policy.
This appeal followed. Zabala-Lugo argues that the trial court erred
because the Stillwater policy is ambiguous and should be read in her favor. In
addition, she argues the trial court erred when it rejected her public policy
argument.
II.
We review the trial court's decision granting summary judgment de novo,
using "the same standard that governs trial courts in reviewing summary
judgment orders." Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super.
162, 167 (App. Div. 1998). Rule 4:46-2(c) provides that a court should grant
summary judgment when "the pleadings, depositions, answers to interrogatories
and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact challenged and that the moving party is
entitled to a judgment or order as a matter of law." "Thus, the movant must
show that there does not exist a 'genuine issue' as to a material fact and not
simply one 'of an insubstantial nature'; a non-movant will be unsuccessful
'merely by pointing to any fact in dispute.'" Prudential, 307 N.J. Super. at 167
(quoting Brill v. Guardian Life Ins. Co., 142 N.J. 520, 529-30 (1995)). Our
A-1637-19
6
review is "based on our consideration of the evidence in the light most favorable
to the parties opposing summary judgment." Brill, 142 N.J. at 523.
The trial court's interpretation of an insurance contract is a question of
law, which we review de novo. Polarome Int'l, Inc. v. Greenwich Ins. Co., 404
N.J. Super. 241, 260 (App. Div. 2008). The "trial court's interpretation of the
law and the legal consequences that flow from the established facts are not
entitled to any special deference." Id. at 259-260 (quoting Manalapan Realty,
L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
Insurance policies are subject to special rules of interpretation, as they are
contracts of adhesion. Longobardi v. Chubb Ins. Co., 121 N.J. 530, 537 (1990).
Such "policies should be construed liberally in [the insured's] favor to the end
that coverage is afforded 'to the full extent that any fair interpretation wil l
allow.'" Ibid. (quoting Kievit v. Loyal Protective Life Ins. Co., 34 N.J. 475, 482
(1961)). However, "the words of an insurance policy should be given their
ordinary meaning." Ibid. "[I]n the absence of an ambiguity, a court should not
'engage in a strained construction to support the imposition of liability' or write
a better policy for the insured than the one purchased." Oxford Realty Group
Cedar v. Travelers Excess & Surplus Lines Co., 229 N.J. 196, 207 (2017)
(quoting Progressive Cas. Ins. Co. v. Hurley, 166 N.J. 260, 272-73 (2001)).
A-1637-19
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An insured will be charged with what the average insured person would
understand from reading the policy. Morrison v. American Int'l Ins. Co. of Am.,
381 N.J. Super. 532, 542-43 (App. Div. 2005). If the language is ambiguous,
the "insured's reasonable expectations are brought to bear on misleading terms
and conditions of insurance contracts and genuine ambiguities are resolved
against the insurer." Id. at 537. However, an insurance policy is not per se
ambiguous because its sections are separately presented, including the
declarations page, definitions, exclusions, and endorsements. Zacarias v.
Allstate Ins. Co., 168 N.J. 590, 603 (2001). In addition, "[e]xclusionary clauses
are presumptively valid and are enforced if they are specific, plain, clear,
prominent, and not contrary to public policy. If the words used in an
exclusionary clause are clear and unambiguous, a court should not engage in a
strained construction to support the imposition of liability." Flomerfelt v.
Cardiello, 202 N.J. 432, 441-42 (2010) (internal quotations omitted).
We agree with the trial court's conclusion that the Stillwater policy is
unambiguous in its exclusion of UIM coverage. Several provisions of the
policy, including the exclusions page, state in clear language that UIM coverage
is not included in Zabala-Lugo's policy. Absent an express endorsement of UIM
coverage, which does not appear in the policy, Zabala-Lugo did not obtain such
A-1637-19
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coverage. As the trial court aptly found, to interpret the Stillwater policy to
provide UIM coverage, as urged by Zabala-Lugo, would strain the plain
language of the agreement and give her coverage for which she has not paid a
premium.
We also agree with the trial court's conclusion that public policy does not
require we adopt Zabala-Lugo's interpretation of the Stillwater policy. While
the Legislature has enacted a number of requirements for automobile insurance
policies, including minimum coverage and limits, it has not extended those
requirements to umbrella policies. Zabala-Lugo has identified no convincing
argument for a judicial declaration that our statutes provide insufficient
protection from a public policy perspective to policy holders who elect to obtain
coverage under an umbrella policy.
To the extent we have not addressed any of Zabala-Lugo's remaining
arguments we find them to be without sufficient merit to warrant discussion in
a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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