Jayro Aguirre Picoita v. Progressive Garden State Insurance Co.

• Court: New Jersey Superior Court Appellate Division
• Decided: November 24, 2025
• Docket: A-2201-24
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-2201-24

JAYRO AGUIRRE PICOITA,

Plaintiff-Appellant,

v.

PROGRESSIVE GARDEN STATE INSURANCE CO.,

Defendant-Respondent. ___________________________

Submitted November 10, 2025 – Decided November 24, 2025

Before Judges Walcott-Henderson and Bergman.

On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-0006-25.

Gray Injury Law, PLLC, attorneys for appellant (Josh M. Blane, on the brief).

Law Office of Hilary M. Kolb, attorneys for respondent (Christoher W. Ferraro, on the brief).

PER CURIAM In this automobile coverage dispute, plaintiff Jayro Aguirre Picoita

appeals from a March 7, 2025 order granting defendant Progressive Garden State

Insurance Company's ("Progressive") motion to dismiss his complaint, and

denying plaintiff's motion for summary judgment to enter a declaratory

judgment setting the underinsured motorist ("UIM") coverage limits at $50,000.

Plaintiff argues the court erred in finding: the language of defendant's step -

down provision enforceable, defendant provided adequate notice of the step -

down provision in the policy; and the language of defendant's step-down

provision was neither ambiguous nor misleading. Because we conclude the

language in the policy's declaration and step-down provision is ambiguous, we

vacate the trial court's order and remand for entry of summary judgment in

plaintiff's favor.

The relevant facts are undisputed. On February 2, 2024, plaintiff was

injured in an automobile accident while driving a vehicle owned and insured by

Juan Osorio Florez ("Florez"), a non-relative. Plaintiff did not own a vehicle,

was not named on any vehicle's policy, and did not have any family members

that were covered under a vehicle policy. Florez was insured by Progressive

under a policy which included UIM coverage of $50,000 for each person and

$100,000 for each accident.

A-2201-24 2 Plaintiff instituted a personal injury claim that settled with the tortfeasor's

policy limit of $25,000, after obtaining consent from defendant pursuant to

Longworth v. Van Houten, 223 N.J. Super. 174 (App. Div. 1988) and notified

defendant of her intent to seek UIM benefits under Florez' policy.

Progressive denied plaintiff's claim, relying upon a "step-down" provision

in the insurance contract that they purported reduced the availability of UIM

benefits to the "mandatory minimum financial responsibility limits specified by

the laws of New Jersey." Thereafter, plaintiff filed a declaratory action against

defendant seeking UIM coverage be set at the $50,000 limits as clearly stated

on the declarations page of the policy, which defendant denied, citing the step-

down provision in its policy with Florez. The step-down provision provided:

If an insured person is:

1. not insured as a named insured or spouse under this policy or any other motor vehicle liability policy;

2. not insured as a relative under this policy or any other motor vehicle liability policy; and that

3. not insured under any other motor vehicle policy;

then any recovery for damages for bodily injury for that insured person may equal but not exceed the mandatory

A-2201-24 3 minimum financial responsibility limits specified by the law of New Jersey.

[(emphasis added).]

Defendant asserted the policy limited defendant's UIM coverage and

liability to $25,000, the minimum coverage required by the State.

On the same day defendant answered the complaint, plaintiff filed an order

to show cause seeking declaratory relief as stated in his complaint, which the

court adjourned. Defendant subsequently moved for dismissal pursuant to Rule

4:6-2(e), for failure to state a claim upon which relief can be granted, which was

scheduled and addressed prior to the order to show cause hearing. Plaintiff also

cross-moved for summary judgment.

The court granted defendant's motion to dismiss; denied plaintiff's cross-

motion for summary judgment; and declared "there is no [UIM] to trigger as to

[defendant]." 1 The court reasoned plaintiff did not fit into any of the three

categories in the step-down provision and that the provision was clear and

unambiguous, appeared in a section of the contract titled "LIMITS OF

LIABILITY," does not create any reasonable expectation of coverage, and

1 The court did not specify in which order it would evaluate the parties' motions and plaintiff's summary action, nor did the court separate its analysis of each motion in its statement of reasons. A-2201-24 4 because the provision was present in the original policy and every renewal, there

was no change that necessitated notice to the insured. Additionally, the court

noted:

while [p]laintiff asserts that the [step-down] provision creates an impermissible burden by requiring policyholders to conduct legal research to determine their coverage, the [c]ourt disagrees. The phrase "mandatory minimum financial responsibility limits" is a standard term in insurance law, and policyholders are not left without sufficient guidance in interpreting its meaning.

Plaintiff appealed, arguing the court erred in finding the step-down

limitation on UIM coverage to be clear and unambiguous and by granting

defendant's dismissal motion on that basis.

I.

We review a trial court's summary judgment decision de novo. DeSimone

v. Springpoint Senior Living, Inc., 256 N.J. 172, 180 (2024). "To decide

whether a genuine issue of material fact exists, the trial court must 'draw[] all

legitimate inferences from the facts in favor of the non-moving party.'"

Friedman v. Martinez, 242 N.J. 449, 472 (2020) (alteration in original) (quoting

Globe Motor Co. v. Igdalev, 225 N.J. 469, 480 (2016)).

We likewise review a court's interpretation of an insurance contract de

novo. Katchen v. Gov't Emps. Ins. Co., 457 N.J. Super. 600, 604 (App. Div.

A-2201-24 5 2019). Thus, we afford no special deference to a "trial court's interpretation of

the law and the legal consequences that flow from established facts." Sealed Air

Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 374 (App. Div. 2008) (quoting

Pressler & Verniero, Current N.J. Court Rules, cmt. 3.1 on R. 2:10-2 (2026)).

Our Supreme Court has established that we pay "special scrutiny to

insurance contracts because of the stark imbalance between insurance

companies and insureds in their respective understanding of the terms and

conditions of insurance policies." Zacarias v. Allstate Ins. Co., 168 N.J. 590,

594 (2001). "[I]nsurance policies are contracts of adhesion 'between parties who

are not equally situated.'" Pizzullo v. N.J. Mfrs. Ins. Co., 196 N.J. 251, 270

(2008) (quoting Meier v. N.J. Life Ins. Co., 101 N.J. 597, 611 (1986)).

Additionally, "[i]nsurance policy exclusions must be construed narrowly."

Merck & Co., Inc. v. Ace Am. Ins. Co., 475 N.J. Super. 420, 434 (App. Div.

2023) (citing Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 95 (1997)).

Nevertheless, "insureds are [not] relieved of their ordinary duty to review, an d

to be bound by the terms of, the policy itself;" however, the reasonable

expectation of the policyholder governs where "a close, searching review would

not have resolved the ambiguity." Pizzullo, 196 N.J. at 273.

A-2201-24 6 An insurance policy "will be enforced as written when its terms are clear

in order that the expectations of the parties will be fulfilled." Norman Int'l, Inc.

v. Admiral Ins. Co., 251 N.J. 538, 552 (2022) (quoting Mem'l Props., LLC v.

Zurich Am. Ins. Co., 210 N.J. 512, 525 (2012)). "In considering the meaning of

an insurance policy, we interpret the language 'according to its plain and

ordinary meaning.'" Flomerfelt v. Cardiello, 202 N.J. 432, 441 (2010) (quoting

Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 175 (1992)).

A policy provision, however, is deemed ambiguous when it is objectively

open to more than one interpretation. See Cadre v. Proassurance Cas. Co., 468

N.J. Super. 246, 258 (App. Div. 2021) (quoting Flomerfelt, 202 N.J. at 441).

And, we have long held that where the terms are ambiguous, "they are construed

against the insurer and in favor of the insured, in order to give effect to the

insured's reasonable expectations." Ibid. Additionally, "[w]hen there is

ambiguity in an insurance contract, courts interpret the contract to comport with

the reasonable expectations of the insured, even if a close reading of the written

text reveals a contrary meaning." Zacarias, 168 N.J. at 595.

UIM coverage is defined as "insurance for damages because of bodily

injury . . . resulting from an accident arising out of the ownership, maintenance,

operation or use of an underinsured motor vehicle." N.J.S.A. 17:28-1.1(e)(1).

A-2201-24 7 II.

Plaintiff asserts the court erred in finding there was no dispute "the [step -

down] clause . . . is clear and unambiguous," and "the policy language clearly

sets forth the conditions under which the [step-down] applies and does not create

any reasonable expectation of additional coverage for [p]laintiff." Additionally,

plaintiff asserts the policy should be construed from the perspective of a

reasonable insured's coverage expectations, the policy is unclear and ambiguous,

and that any ambiguity should be resolved in favor of plaintiff, thus voiding the

step-down provision.

Defendant argues plaintiff is not entitled to $50,000 in UIM coverage

because he was not a "named insured," a "spouse of the named insured," a "

relative of the named insured," or "insured under any other policy;" thus, the

step-down provision limiting recovery to $25,000 applied. Defendant posits the

UIM step-down endorsement "is not the least bit complex," and is clear and

unambiguous.

The court found "[p]laintiff's contention that the policy must explicitly

reference the applicable statute, provide a specific numerical figure for the step -

A-2201-24 8 down coverage, or use boldface to highlight the provision is not supported by

the language of N.J.S.A. 17:28-1."2

Pursuant to the above well-established legal principles applicable to

insurance matters, we conclude the motion court erred by granting summary

judgment in defendant's favor based on its finding the insurance policy was not

ambiguous.

In interpreting an insurance policy, a court "must start with the plain

language of the policy and give the words 'their plain, ordinary meaning.'"

Hardy ex rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 101 (2009) (quoting

Zacarias, 168 N.J. at 595). An "insurance policy is an agreement that sets forth,

in fundamental terms, the general outlines of coverage." Id. at 102 (additional

citations omitted). "If the policy terms are clear, courts should interpret the

policy as written and avoid writing a better insurance policy than the one

purchased." Id. at 101-02; see also Gibson v. Callaghan, 158 N.J. 662, 669

(1999). "Even exclusionary provisions 'are presumptively valid and will be

given effect if specific, plain, clear, prominent, and not contrary to public

2 N.J.S.A. 17:28-1 is likely a typo, as it concerns separate risks in insurance policies and associated premiums. The minimum amount of coverage an insurance company is required to offer for UIM claims is controlled by N.J.S.A. 17:28-1.1. Non-UIM compulsory automobile insurance coverage is codified in N.J.S.A. 39:6A-3. A-2201-24 9 policy.'" Id. 198 N.J. at 102 (2009) (quoting Princeton Ins. Co. v. Chunmuang,

151 N.J. 80, 95 (1997)) (additional citations omitted).

However, "[i]f the policy terms are not clear or are ambiguous, courts

should 'interpret the contract to comport with the reasonable expectations of the

insured.'" Ibid. (quoting Zacarias, 168 N.J. at 595). "[A] genuine ambiguity

[arises] where the phrasing of the policy is so confusing that the average

policyholder cannot make out the boundaries of coverage." Zacarias, 168 N.J.

at 595 (quoting Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 247 (1979).

Similarly, "courts will depart from the literal text and interpret [a clause]

in accordance with the insured's understanding[,] if the text . . . contains hidden

pitfalls[] [and] cannot be understood without employing subtle or legalistic

distinctions, or requires strenuous study to comprehend," or "require an

entangled and professional interpretation to be understood." Id. at 601

(emphasis added). Moreover, the Plain Language Act, N.J.S.A. 56:12-1 to -13,

requires consumer insurance policies to be "simple, clear, understandable and

easily readable." See Longobardi, 121 N.J. at 538 (citing N.J.S.A. 56:12-2); see

also Boddy v. Cigna Prop. & Cas. Companies, 334 N.J. Super. 649, 654-55

(App. Div. 2000).

A-2201-24 10 Here, the ambiguity arises from defendant's failure to define the limits of

the step-down provision such that the "average policyholder [can] make out the

boundaries of coverage." See Passaic Valley Sewerage Com'rs v. St. Paul Fire

& Marine Ins. Co., 206 N.J. 596, 608 (2011) (citing Zacarias, 168 N.J. at 604).

The declaration page of the policy clearly states each person is entitled to

$50,000 of underinsured motorist coverage. There is no mention this amount

will be subject to change based upon each person's relationship to the policy

holder. Conversely, the policy's step-down clause states, in pertinent part: "[as

applicable to plaintiff,] recovery for damages for bodily injury for that insured

person may equal but not exceed the mandatory minimum financial

responsibility limits specified by the laws of New Jersey." (emphasis added).

Specifically, the restriction of defendant's UIM coverage to the "limits

specified by the laws of New Jersey" is incomprehensible without either

"employing subtle or legalistic distinctions . . . or strenuous study to

comprehend." Zacarias, 168 N.J. at 601. Therefore, for plaintiff to discover the

limits of the step-down provision in this case requires plaintiff not only to search

for the controlling statute, but also any case law interpreting the statute as well.

Stated differently, defendant, in defining the scope of limitation to "the laws of

New Jersey," forces the average policyholder or similarly situated person to

A-2201-24 11 plaintiff to employ "legalistic distinctions," or resort to "strenuous study" to

determine the boundaries of coverage, which our Court has deemed

impermissible. See Zacarias, 168 N.J. at 595, 601. At minimum, an objectively

reasonable consumer would have to locate and interpret the two statutes to

understand the scope of a policy's coverage, notwithstanding any additional

research which must be conducted to discover conflicting statutes and case law .

Moreover, we further conclude the step-down provision is ambiguous

because it is subject to multiple interpretations including the differing UIM

coverage limits specifically set forth on the declaration page as compared to the

step-down clause. See Cadre, 468 N.J. Super. 246, 258. We therefore conclude

the court erred in finding the step-down clause enforceable as unambiguous and

clear.

Accordingly, we vacate the order dismissing plaintiff’s complaint, remand

this matter to the motion court for entry of summary judgment in plaintiff's

favor, and for consideration of plaintiff's application for attorney’s fees and

costs.

Vacated and remanded. We do not retain jurisdiction.

A-2201-24 12