Plaintiffs Deemed ‘Strangers to Insurance Policy’ Have No Right to Recover

Sam Twal was stopped in traffic in East Brunswick, NJ when a vehicle driven by Alberto Gomez struck the rear of Twal’s vehicle and pushed it into the vehicle in front of him. The vehicle driven by Gomez was owned by Freddy Pascal Estevez, Axel Logistics LLC, and was insured by United and ABC Corps 1-25.

The plaintiffs filed a complaint for various causes of action, one being a claim against United for violation of Pennsylvania Code 32.11(d), which sets liability insurance minimums for large passenger carriers, and Pennsylvania Code 75. United filed a motion to dismiss, which the plaintiffs opposed.

United made three primary arguments in support of dismissing the complaint as it relates to the counts asserted against it: (1) the plaintiffs did not have a direct cause of action against an alleged tortfeasor’s insurer; (2) there was no direct cause of action against the insurers based upon an insurer’s purported failure to comply with motor carrier safety regulations; and (3) the issues the plaintiffs raised were not ripe because United did not owe a duty to indemnify unless and until there is a settlement or judgment against its insured.

The plaintiffs’ claims against United failed under both New Jersey and Pennsylvania law. Under New Jersey law, “an individual or entity that is ‘a stranger to an insurance policy has no right to recover the policy proceeds.’” Ross v. Lowitz, 120 A.3d 178, 189 (N.J. 2015). The court held that the plaintiffs, as tort claimants, are strangers to the insurance policy and had no right to recover against United absent an assignment of rights. Additionally, the plaintiffs failed to cite any authority that demonstrates they had standing, as third parties to the policy, to bring an action against an insurance company for failing to provide the statutorily required minimum coverage to an insured.