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Will the real ‘UIM’ defendant please stand up?

The New Jersey Supreme Court last Monday was asked to explode the legal fiction in UIM cases that the driver who caused the accident, not the plaintiff’s auto insurance carrier who declined coverage, is the defendant. The plaintiff in Bardis v. First Trenton Ins. Co., was injured in a parking lot collision with an underinsured driver. First Trenton paid PIP benefits, but declined UIM coverage. When the plaintiff sued, he requested a jury instruction that First Trenton be the named defendant, which was refused. The jury found that the other driver’s negligence did not cause the accident, thereby extinguishing the UIM claim. The Appellate Division affirmed and the Supreme Court subsequently agreed to review the case. It is the Plaintiff’s argument that had the jury known of the PIP benefit payments, it could have concluded that the carrier agreed the injuries were caused by the other driver’s negligence. At argument, the Justices seemed to be concerned about the possibility that if insurers feel the payment of PIP benefits might lead to subsequent UIM liability, they will have “second thoughts.” This suggests the Court may affirm the Appellate Division. However, given the Court’s general penchant for ruling against carriers, the decision could go either way. In any event, the decision will have important implications for auto carriers doing business in New Jersey, and we will provide and update upon receiving the opinion.

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