The opinion of the court was delivered by
Defendant, Avis Rent A Car Systems, Inc. (Avis) appeals from a judgment requiring it to provide primary insurance coverage to defendant, Richard Brown, Jr., and, as a result, to reimburse Brown’s personal auto insurance carrier, Farmers Insurance Company (Farmers) for legal fees and settlement monies that it paid on Brown’s behalf. We conclude that as a self-insurer, Avis is required to provide primary coverage despite a provision in its
This appeal arises out of a multiple vehicle accident on April 12, 1999. A car being operated by Dominick N. Coia, Jr., and owned by James O’Connell, was traveling west on the Atlantic City Expressway when Coia, having missed his intended exit, attempted to execute a u-turn from the left lane through a cut-thru on the Expressway. As Coia slowed to make his illegal turn, his vehicle was struck from behind by a car owned by Avis and operated by Brown. Patricia Robinson was a passenger in Brown’s car. Two other cars following behind Brown then became involved in the collision. The details of their ownership and operation are not pertinent to the issues that confront us.
Robinson thereafter initiated suit against Coia, Brown and Avis. The law firm of Sachs, Maitlin, Fleming, Green, Wilson and Marotte (Sachs) filed an answer on behalf of Brown on assignment from Farmers, Brown’s personal automobile insurance carrier. A separate law firm filed an answer on behalf of Avis. Thereafter, Brown filed a cross-claim against Avis seeking a declaration that Avis, as a self-insured, was required to provide primary coverage to Brown, to assume his defense and reimburse him for counsel fees already incurred. Avis and Brown filed summary judgment motions on the cross-claim, with Avis contending that its insurance was only secondary to that of Farmers and that, accordingly, no defense of Brown was required.
The Avis car had been rented by Brown’s wife at an Avis facility in New Jersey. However, the car was registered in Pennsylvania where Avis is self-insured.2 Brown declined Avis’ offer of optional insurance. The rental agreement between Avis and Brown contained the following provision:
[Ajnyone driving the car as permitted by this agreement will be protected against liability for causing bodily injury or death to others or damaging the property ofPage 340someone other than the driver and/or the renter up to the minimum financial responsibility limits required by applicable law.
The coverage provided by you [Avis] shall be excess over any applicable insurance available to me [renter] or any other driver, from any other source, whether primary, excess, secondary or contingent in anyway.
As noted, Brown had a personal automobile policy with Farmers that contained liability coverage limits of $100,000 per occurrence and $300,000 per accident. That policy had an excess insurance clause governing Brown’s use of a rental car, that provided that “any insurance we provide for a vehicle you do not own shall be excess over any other collectible insurance.”
In ruling upon the cross motions for summary judgment, Judge Donaldson determined that Avis’ self-insurance certificate was the equivalent of an insurance policy, with the result that Avis became the primary insurer, with Farmers providing excess coverage only. Central to that ruling was the judge’s conclusion that the rental agreement between Brown and Avis was not part of Avis’ self-insurance and the terms of that agreement did not apply to render the Avis coverage excess. Subsequently, the judge ruled that the extent of Avis’ liability under its certificate was $15,000/$30,000, the minimum required under New Jersey law, rejecting Brown’s argument that the coverage was limited only by the extent of Avis’ assets. Avis was also required to assume the defense of Brown in the pending action.
Upon the substitution of new counsel for Brown, the Sachs law firm filed an application for reimbursement from Avis of its attorneys’ fees and costs in both the cross-claim coverage action and in defense of the underlying personal injury suit. The judge awarded the firm $9585 as reimbursement for defense of the Robinson case and $16,300 for its work on the coverage aspect of the litigation, together with $496.96 in costs.
Subsequently, the underlying personal injury case was
Pursuant to N.J.S.A. 45:21-2, Avis, being in the business of leasing motor vehicles, is required to carry liability insurance insuring it against damages suffered by a third party resulting from the negligent operation of its leased vehicle. The limits of liability must be in the minimum amount of $15,000/$30,000/$5000. Hanco v. Sisoukraj, 364 N.J.Super. 41, 45 n. 1, 834 A.2d 443 (App.Div.2003). The statute further provides that the lessor may be self-insured, as Avis is here. N.J.S.A. 45:21-8. However, as Avis correctly observes, the statute does not explicitly state that the required coverage must always be primary (as opposed to co-primary or excess) but only that there be such coverage. See Cosmopolitan Mut. Ins. Co. v. Continental Cas. Co., 28 N.J. 554, 563, 147 A.2d 529 (1959).
Resolution of this appeal requires us to balance two ostensibly competing lines of authority. On the one hand, Avis stresses the settled principle that agreements not contrary to law, and without ambiguity, should be enforced as written, and not be re-written by the courts. See Christafano v. New Jersey Mfr. Ins., 361 N.J.Super. 228, 234-35, 824 A.2d 1126 (App.Div.2003); Universal Underwriters v. CNA Ins. Co., 308 N.J.Super. 415, 420, 706 A.2d 217 (App.Div.1998). In that regard, Avis is correct in noting that the language contained in its rental agreement with Brown is “plain and unambiguous.” Nevertheless, this general
We conclude that Judge Donaldson correctly resolved the competing arguments against Avis. In our view, Avis’ effort to avoid providing insurance coverage through the terms of its rental agreement does violate public policy. First, Avis gains a substantial monetary benefit by being self-insured and cannot rightly be permitted to “have its cake and eat it too.” Under its rental contract, Avis escapes any responsibility for providing insurance coverage if the renter has other liability insurance available to them. Thus, in what must be a significant percentage — if not the vast majority — of instances Avis is relieved of providing any coverage at all.4 Avis thereby shifts the burden of providing the mandatory insurance coverage to the lessee’s insurer. White v. Howard, 240 N.J.Super. 427, 430 n. 1, 573 A.2d 513 (App.Div.), certif. denied, 122 N.J. 339, 585 A.2d 354 (1990). In White, Judge Dreier said:
While Agency [the rental company] may choose to save insurance premiums by self-insuring its vehicles, it should not be permitted to do so partially at the expense of other insurers who normally would look to each other under the “other insurance” provisions of their policies, and who have set their rates accordingly. Since only financially responsible owners of 25 or more vehicles may become certified self insureds ... those best able to pay would be permitted by this devicePage 343to shift the costs of accidents to the non-fleet owners of other vehicles and their insurers.
[Id. at 433, 573 A.2d 513].
We agree with Avis that White is factually distinguishable because the self-insurer in that case, Agency, sought to avoid any liability coverage through the terms of its rental contract while here, Avis does provide primary coverage if the lessee has no coverage or excess if the lessee does have a policy. Nevertheless, we find Judge Dreier’s comments to be just as applicable in the present context. Avis is in fact seeking to shift the costs of accidents to other car owners and their insurers while itself avoiding the necessity of obtaining insurance coverage. To sanction this course of conduct would exempt Avis from the rules that apply to other automobile owners regarding liability insurance. Those “who choose to self-insure are held to the same duties as those who do not.” Auto Owners Ins. Co. v. Enterprise Rent-A-Car Co.—Midwest, 663 N.W.2d 208, 211 (S.Dak.2003).
Second, we previously faced the same issue, in a slightly different context, in Ambrosio v. Affordable Auto Rental, Incorporated, 307 N.J.Super. 114, 121-22, 704 A.2d 572 (App.Div.1998). In that case, Unity, an insurance carrier, issued a policy to Affordable Auto, a car rental company. Id. at 118, 704 A.2d 572. The policy excluded from the definition of insured the “rentee” or any driver obtaining the car from the “rentee” unless such “rentee”:
(a) has no other available insurance (whether primary, excess, or contingent), he or she is an “insured” but only up to the compulsory or financial responsibility law limits.
(b) has other available insurance (whether primary, excess, or contingent), less than the compulsory or financial responsibility law limits, he or she is an “insured” only for the amount by which the compulsory or financial responsibility law limits exceed the limits of his or her own insurance.
>[Id. at 123-24, 704 A.2d 572],
We held that the Unity policy provision constituted an “illegal escape clause,” since it conflicted with the statutorily required omnibus clause, N.J.S.A. 45:21-3, and was therefore ineffective. Id. at 124, 704 A.2d 572. In reaching that conclusion, we relied on Selective Insurance Company v. Charter Risk Retention Group
The reasoning of Selective and Ambrosio are fully applicable here. In those eases the leasing company actually obtained liability insurance, but with the illegal “escape” provisions. In this case, Avis has no policy, relying instead on the language in its rental agreement. Such language, we conclude, is similarly ineffective to restrict or avoid the mandatory omnibus coverage required by the statute. Allstate Ins. Co.,.supra, 195 N.J.Super. at 602-06, 481 A.2d 298 (provision in rental contract excluding persons under age twenty-one from definition of authorized operators ineffective to avoid coverage for permissive user of ear). Thus, we conclude that Avis’ rental contract with Brown is not effective to the extent that it seeks to render Avis’ self-insurance coverage excess.
Avis also argues, as a fall-back position, that its coverage should be co-primary with Farmers, due to the presence of “excess” provisions in both documents, that is, the Farmers policy and Avis’ lease agreement with Brown. Cosmopolitan Mut. Ins. Co., supra, 28 N.J. at 562, 147 A.2d 529. Brown’s response is that the rule established by Cosmopolitan only comes into play when there are two insurance policies to compare. See Universal Underwriters, supra, 308 N.J.Super. at 418-19, 706 A.2d 217
To the extent that Agency Rentr-A-Car, Inc. v. Indemnity Insurance Company of North America, 268 N.J.Super. 319, 324-25, 633 A.2d 975 (App.Div.1993), relied upon by our dissenting colleague, suggests otherwise, we do not agree. Agency states that “plaintiff is entitled to establish and abide by contractual limitations for indemnification to the extent they are not inimical with the law,” citing Allstate Insurance Company, supra, 195 N.J.Super. at 606, 481 A.2d 298. 268 N.J.Super. at 324, 633 A.2d 975. In fact, the holding of Allstate, to which we have referred
Further, Brown argues that to accept Avis’ position that the rental agreement is itself a form of insurance policy would place Avis’ rental agents in the position of selling insurance without being licensed to do so. That argument has some merit. Indeed, it would appear that by offering the lessee optional coverages for an additional fee, which Avis admits is routinely the case,5 the agents may even now be engaging in a prohibited activity. N.J.S.A. 17:22A-29,-30; N.J.A.C. 11:17-2.2(a)4.6 In any event, we need not resolve that question in order to decide this case.
We hold that Avis must, when acting as a self-insurer, in the circumstances presented here, provide primary coverage to its lessee, Brown, and cannot avoid doing so by relying upon terms contained in its rental contract, which does not constitute an insurance policy for purposes of comparison with a policy covering its lessee personally that contains an excess provision.
We need not decide the limits of Avis’ responsibility, that is whether, as Avis argues, it is only to the limit of the mínimums required by statute, N.J.S.A. 45:21-3, or is unlimited, as Brown contends, citing Ryder/P.I.E. Nationwide. Here, the total amount for which Avis was held responsible fell within the statutory minimum.
Affirmed.
2.
Avis cars registered in New Jersey are covered by an insurance policy with CNA providing liability limits of $15,000/$30,000.
3.
We reject as without merit, Brown’s contention that Avis' appeal must be dismissed because it was filed out of time. R. 2:11 — 3(e)(1)(E).
4.
Indeed, in this case the underlying suit was settled for $2000, well below the minimum coverage, and thereby not implicating any excess coverage. As a result, if Avis’ position were accepted, it would have paid nothing.
5.
The rental agreement indicates that both "personal accident insurance” and "personal effects protection” insurance is made available to the renter for a stated per diem charge.
6.
The necessity for a licensed professional to sell insurance is quite apparent. Could a rental car agent respond accurately if the customer inquired whether additional insurance was needed in light of other policies available? We have substantial doubt on that score.