Case Title: New Jersey Manufacturers Insurance Co. v. Hardy

Citation: 

Docket Number: a-79-02

State: new-jersey

Court: New Jersey Supreme Court

Date: 2004-01-27T00:00:00Z

Document:
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). Defendant-claimant Kayson Cheeks was on duty as a police officer in Newark when he was involved in a motor vehicle accident. Cheeks suffered injuries and was treated by defendant Haveron Total Health, P.A.. Cheeks, who lived with his father Bernie J. Hardy at the time of the accident, was insured as a resident relative under his father s policy, issued by plaintiff New Jersey Manufacturers Insurance Co. (NJM). Cheeks filed for workers compensation benefits and also sought PIP coverage from NJM, but NJM denied coverage, claiming that the police cruiser was not a private passenger automobile under the No Fault Act and that his workers compensation provider was responsible for his work-related automobile accident. NJM filed a declaratory judgment action. The parties filed cross-motions for summary judgment and the trial judge granted judgment to defendants. The court held: 1) A vehicle owned by a governmental entity, in this case a police cruiser, was a private vehicle under the No Fault Act; and, 2) the availability of workers compensation did not preclude PIP coverage. A divided Appellate Division panel reversed. The majority ruled that a police cruiser was not a private passenger automobile under the No Fault Act because police vehicles are modified for the hazards they routinely encounter. N.J. Mfrs. Ins. Co. v. Hardy, 357 N.J. Super. 19 (2003). In addition, the Appellate Division held that Cheeks should not be permitted to circumvent the workers compensation statutory framework by transferring the cost of his work-related injuries to NJM. Judge Lisa, dissenting, construed the No Fault Act as excluding from PIP coverage only automobiles used for public livery or rented with a driver. Moreover, Judge Lisa disagreed with the majority that Cheeks was circumventing the workers compensation system, adding that NJM may seek contribution from Cheek s workers compensation provider. This appeal is before us as of right as a result of the dissent by Judge Lisa. HELD: First-party PIP coverage is available to an employee who is injured while driving a government-owned automobile of a private passenger type. 1. The present dispute concerning construction of the term automobile arises in the context of our statutory and regulatory system of mandatory automobile insurance, which includes liability, PIP, and optional uninsured motorist (UM) and underinsured motorist (UIM) coverage. The coverage applies to three categories of injured persons: (1) a named insured and resident relatives of that named insured injured in an accident involving any automobile; (2) other persons sustaining injuries in incidents involving an automobile of a named insured, who are permissive occupants or users of a named insured s automobile; and (3) pedestrians injured by an automobile of a named insured. The No Fault Act is given liberal construction in favor of its intended remedial purpose of effecting broad protection for accident victims. (Pp. 5-8) 2. Nothing about the operation of our no-fault system of insurance coverage suggests that an accident victim s access to his or her own first-person PIP insurance coverage is premised on whether the automobile involved in the accident is owned by a governmental entity or a private person: If the legislature had intended to exclude all government-owned vehicles from the No Fault Act s coverage, it would have expressed that intent. Simon v. CAN Insurance Co., 225 N.J. Super 606, 614-615 (App. Div.), certif.. denied, 113 N.J. 350 (1988). We find that the Legislature used the term private passenger automobile as a term of art to distinguish such vehicles from public passenger automobiles (such as taxicabs), and from private freight automobiles (such as trucks). (Pp. 8-12) 3. Government ownership of a vehicle involved in an accident does not prevent a victim from pursuing No Fault or other compulsory insurance protections, including UM protection, from various sources. We perceive no express or implied public policy that would support a per se exclusion from PIP coverage for victims of accidents that involve government-owned automobiles. Accordingly, we conclude that first-party PIP coverage is available to an employee who is injured while driving a government-owned automobile of a private passenger type. Moreover, as explained by Judge Lisa, a PIP exclusion for police cruisers based on a vehicle-modification theory is not consistent with the statutory exclusions crafted by the Legislature in N.J.S.A. 39:6A-2a. (Pp. 12-16) 4. A PIP carrier may seek reimbursement from the workers compensation provider, N.J.S.A. 39:6A-6, and even may be the initiator of a workers compensation proceeding if the injured person has not filed for such benefits. The availability of workers compensation does not preclude an insured (or his assignee) from seeking the range of remedies available pursuant to PIP. (Pp. 16-17) The judgment of the Appellate Division is REVERSED. CHIEF JUSTICE PORITZ and JUSTICES LONG, VERNIERO, ZAZZALI, ALBIN and WALLACE join in Justice LAVECCHIA s opinion. Plaintiff-Respondent, v. BERNIE J. HARDY, KASON CHEEKS and HAVERON TOTAL HEALTH, P.A., Defendants-Appellants. Argued October 20, 2003 Decided January 27, 2004 On appeal from the Superior Court, Appellate Division, whose opinion is reported at 357 N.J. Super. 19 (2003). Douglass D. Burgess argued the cause for appellants (Cary & Icaza, attorneys; Robert R. Cary, on the brief).` Robert F. Cox argued the cause for respondent (McCreedy and Cox, attorneys). JUSTICE LaVECCHIA delivered the opinion of the Court. This appeal is from an insurance-coverage declaratory judgment action. We must address whether an individual is entitled to claim Personal Injury Protection (PIP) coverage pursuant to N.J.S.A. 39:6A-1 to 35 (No Fault Act) under a personal automobile insurance policy when the precipitating accident occurred during work and involved the employer s motor vehicle. The defendant-claimant, Kayson Cheeks, was serving as a police officer in the City of Newark when he was injured while on patrol in a police cruiser. A divided Appellate Division panel determined that a specially equipped police car is not a private passenger automobile within the meaning of the No Fault Act s definition of automobile and held, therefore, that Cheeks was not entitled to PIP coverage. N.J. Mfrs. Ins. Co. v. Hardy, 357 N.J. Super. 19, 21-24 (2003). This appeal is before us as of right as a result of the dissent by Judge Lisa. R. 2:2-1(a)(2). We reverse. [N.J.S.A. 39:6A-2a.] The narrow question presented by this case is whether a police cruiser fits within that definition for purposes of Cheeks s entitlement to PIP coverage under his own policy of insurance. In answering that question, we must construe the language of the definition in a manner that sensibly applies the No Fault Act and fulfills its policy objectives. See Cesare v. Cesare, 154 N.J. 394, 405 (1998) (noting central principle of statutory construction dictates that statutes are to be read sensibly, to permit reason and purpose of legislation to control). A. According to Cheeks, he should not be ineligible for PIP coverage under his personal automobile insurance policy because he was operating a police cruiser in the course of his employment at the time of his accident. NJM, however, argues that by use of the term private passenger automobile, the Legislature meant to distinguish a non-private vehicle, such as a governmental vehicle, from a privately owned vehicle for purposes of determining eligibility for PIP coverage. In our view, NJM mistakes the meaning of the word private in private passenger automobile and, as a result, reaches a conclusion that is at odds with the overall purpose of the No Fault Act. Nothing about the operation of our no-fault system of insurance coverage suggests that an accident victim s access to his or her own first-person PIP insurance coverage is premised on whether the automobile involved in the accident is owned by a governmental entity or a private person. Rather, the statute refers to a type of vehicle, and then excludes specific vehicles based on their use. The first clause of N.J.S.A. 39:6A-2a uses the insurance rating classification term private passenger automobile and includes two types of that classification: private passenger or station wagon type automobiles. The definition then exempts certain private-passenger-type and station-wagon-type automobiles based on their specific use: those that are used as a public livery or conveyance for passengers or rented to others with a driver are excepted from the definition. The second clause of the definition addresses the broader category of motor vehicle[s]. It establishes that certain identified types of motor vehicles are considered automobiles for the purpose of the No Fault Act provided that they are not used for business purposes. Again, the statute begins with a type of vehicle and then exempts some vehicles based on specific uses. That same understanding of the statutory language can be found in Simon, supra, 225 N.J. Super. at 613, wherein the trial court rejected an insurance company s argument that a government-owned automobile was not a private passenger automobile within the meaning of N.J.S.A. 39:6A-2a. The trial court reasoned that the private passenger distinction goes to the use of the vehicle and not the ownership of the vehicle, ibid., and the Appellate Division agreed, concluding that there is no indication that the Legislature used the term private automobile in N.J.S.A. 39:6A-2a as being the opposite to government ownership of an automobile. If the Legislature had intended to exclude all government-owned vehicles from the No-Fault Act s coverage, it would have expressed that intent. Id. at 614-15 (emphasis added). Similarly, numerous New Jersey Department of Banking and Insurance regulations employ the rating classification term private passenger automobile and distinguish government- and entity-owned vehicles from individually- or personally-owned vehicles by using the word personal as an additional modifier. See, e.g., N.J.A.C. 11:3-2.2 (defining personal private passenger automobile as a private passenger automobile owned individually, or jointly by individuals who are residents of the same household, and used for personal, family or household needs ) (emphasis added); N.J.A.C. 11:3-44.2 (using same definition in regulations designed to implement N.J.S.A. 17:29A-46.1 by establishing standards to rate policies properly and adequately). We find that the Legislature used the term private passenger automobile as a term of art to distinguish such vehicles from public passenger automobiles (such as taxicabs), and from private freight automobiles (such as trucks). See Poncino v. Sierra Nevada Life & Cas. Co., 286 P. 729, 730-31 (Cal. Dist. Ct. App. 1930) (observing that historic distinction between freight and passenger automobiles appears to have originated with use of similar differentiating terms for railroad cars and elevators). We note that our understanding of the meaning of automobile in N.J.S.A. 39:6A-2a, which focuses first on the type of vehicle and then examines its use, has been applied consistently in decisions that pre-date and post-date Simon. See Giordano v. Allstate Ins. Co., 260 N.J. Super. 329, 330-33 (App. Div. 1992) (holding that minivan used as demonstration vehicle and equipped for transporting up to seven passengers was private passenger automobile, and not a cargo-transporting van); Wagner v. Transamerica Ins. Co., 167 N.J. Super. 25, 30-34 (App. Div.) (holding that car used by dealership salesman as demonstration vehicle was automobile for purposes of PIP coverage under personal insurance policy because of vehicle s type, not its use in commercial or business activities), certif. denied, 81 N.J. 60 (1979). In our view, that longstanding construction gives meaning to all of the words employed in the statute and furthers the legislative intent to achieve broad protection of accident victims. B. We add, for completeness, that examination of the Motor Vehicles Security-Responsibility Law, N.J.S.A. 39:6 23 to 91 (the Act ), reinforces our holding in this case. That Act establishes guidelines by which individuals or entities having motor vehicle fleets of twenty-five or more vehicles may self-insure with the approval of regulators. Ibid. Importantly, the statutory scheme contains a carve-out applicable to governmental entities, exempting them from submission to a regulatory review and approval process otherwise imposed as a condition of being a lawful self-insurer. N.J.S.A. 39:6-54 provides: a. This act shall not apply with respect to any motor vehicle owned by the United States, this State or any political subdivision of this State or any municipality therein; nor with respect to any motor vehicle which is subject to the requirements of law requiring insurance or other security on certain types of vehicles, other than the requirements of P.L.1972, c. 70 (C. 39:6A-1 et seq.) [the No Fault Act] or P.L.1972, c. 197 (C. 39:6B-1 et seq.) [the Compulsory Motor Vehicle Insurance Act ]. [(emphasis added).] N.J.S.A. 39:6-54a excepts governmental entities from the regulatory requirements for self-insurance status, allowing such entities to go bare. See Ross, supra, 114 N.J. at 139 (holding that government entity was not required to purchase insurance or to self-insure). See footnote 2 Importantly, however, N.J.S.A. 39:6-54a itself does not create an exemption from the requirements of the No Fault Act or the Compulsory Motor Vehicle Insurance Act. Government ownership of a vehicle involved in an accident does not prevent a victim from pursuing No Fault or other compulsory insurance protections, including UM protection, from various sources. See Ross, supra, 114 N.J. at 146-47 (recognizing various means by which UM coverage may be available to victims of automobile accidents involving governmental vehicles, such as (1) a policy of insurance procured by the governmental entity; (2) self-insurance coverage; or (3) the UCJF). See footnote 3 See also Christy v. Newark, 102 N.J. 598, 605-12 (1986), in which we held that a Newark police officer, injured by a hit-and-run driver while operating a police car in the course of his duties, was entitled to UM coverage. We noted in Christy that the Appellate Division had rejected an argument, identical to the one now made, that a police car is not an automobile under N.J.S.A. 39:6A-2a, id. at 604, and accepted that court s determination that the inclusion of the word private in the definition was for the purpose of distinguishing normal passenger-type cars from those used as a public livery or conveyance of passengers or rented to others with a driver. Ibid. The issue that is before us in the present appeal was not squarely before us in Christy, id. at 605; however, our holding today follows the Appellate Division s understanding of the term automobile in that matter. See also Wagner, supra, 167 N.J. Super. at 32 (perceiving no total personal/commercial dichotomy for coverage purposes and declining to superimpose such limiting design on statute governing PIP coverage). We perceive no express or implied public policy that would support a per se exclusion from PIP coverage for victims of accidents that involve government-owned automobiles. Indeed, it would be inequitable to deprive an entire class of worker, employees of State and local government, from access to mandatory PIP coverage available through their own personal automobile insurance policy. Accordingly, we conclude that first-party PIP coverage is available to an employee who is injured while driving a government-owned automobile of a private passenger type. We add that we are unpersuaded that a specially equipped police cruiser is no longer an automobile by virtue of its modifications. Countless automobiles have modifications. The modifications identified by the Appellate Division majority a larger engine, better steering, better handling can be found in many sports cars covered by PIP. But cf. Wilno v. N.J. Mfrs. Ins. Co., 180 N.J. Super. 146, 148-49, 153-54 (App. Div. 1981), rev d on dissent, 89 N.J. 252 (1982), (noting obvious off-road use of modified vehicle, which had no body[,] no sides, no roof and no windshield, and that lacked required safety equipment [such] as directional signals, bumpers and a full set of lights ). Moreover, as explained by Judge Lisa, a PIP exclusion for police cruisers based on a vehicle modification theory is not consistent with the statutory exclusions crafted by the Legislature in N.J.S.A. 39:6A-2a. IV. NJM also argues that the availability of workers compensation to Cheeks should preclude PIP coverage under the Policy. However, the Legislature included a collateral source provision in the No Fault Act. See N.J.S.A. 39:6A-6 (referencing workers compensation benefits specifically); s ee, e.g., Olivero v. N.J. Mfrs. Ins. Co., 199 N.J. Super. 191, 200-01 (App. Div. 1985) (holding that availability of workers compensation benefits to injured person does not preclude injured person from seeking PIP benefits). Clearly, a PIP carrier may seek reimbursement from the workers compensation provider, N.J.S.A. 39:6A-6, and even may be the initiator of a workers compensation proceeding if the injured person has not filed for such benefits. See Speiser v. Harleysville Ins. Co., 237 N.J. Super. 507, 511 (App. Div.), certif. denied, 121 N.J. 647 (1990). The availability of workers compensation does not preclude an insured (or his assignee) from seeking the range of remedies available pursuant to PIP. See N.J.S.A. 39:6A-4b to -4e. NO. A-79 SEPTEMBER TERM 2002 ON APPEAL FROM Appellate Division, Superior Court NEW JERSEY MANUFACTURERS INSURANCE COMPANY, Plaintiff-Respondent, v. BERNIE J. HARDY, KASON CHEEKS and HAVERON TOTAL HEALTH, P.A., Defendants-Appellants. DECIDED January 27, 2004 Chief Justice Poritz PRESIDING OPINION BY Justice LaVecchia CONCURRING OPINION BY DISSENTING OPINION BY