Bauter v. Hanover Ins. Co

In Bauter v. Hanover Ins. Co., 247 N.J. Super. 94, 588 A.2d 870 (App.Div.1991), plaintiff's wife was killed in a vehicular accident while a passenger in plaintiff's car. Beside settling the claim against the intoxicated driver of the other car, plaintiff settled a dram shop action against Ralph's Tavern & Liquors, the tavern that served the intoxicated driver, for the full limits of its dram shop liability policy. The court found that the UIM carrier was entitled to a reduction from its limit of UIM liability by the amount paid by the tavern's dram shop carrier, since the tavern admitted liability, and was thus a person legally responsible for the accident and the injuries sustained. The court stated in Bauter: Finally, we note the following condition in plaintiff's automobile insurance policy issued by defendant: With respect to an accident with an underinsured motor vehicle, the limit of liability shall be reduced by all sums: 1. Paid because of the bodily injury or property damage by or on behalf of persons or organizations who may be legally responsible. Ralph's Tavern and Liquors has admitted responsibility for the injures sustained and thus is a party legally responsible. The language of the condition is clear and unambiguous and permits Hanover to offset the amount received under the dram shop policy. Id. at 101, 588 A.2d 870.