Case Name: RUBIN GREENBERG, PLAINTIFF-APPELLANT, v. GREAT AMERICAN INSURANCE COMPANY, DEFENDANT-RESPONDENT
Court: New Jersey Superior Court, Appellate Division
Jurisdiction: New Jersey
Decision Date: 1978-03-22
Citations: 158 N.J. Super. 223
Docket Number: 
Parties: RUBIN GREENBERG, PLAINTIFF-APPELLANT, v. GREAT AMERICAN INSURANCE COMPANY, DEFENDANT-RESPONDENT.
Judges: Before Judges Allcorn, Morgan and Horn.
Reporter: New Jersey Superior Court Reports
Volume: 158
Pages: 223–240

Head Matter:
RUBIN GREENBERG, PLAINTIFF-APPELLANT, v. GREAT AMERICAN INSURANCE COMPANY, DEFENDANT-RESPONDENT.
Superior Court of New Jersey Appellate Division
Submitted January 3, 1978
Decided March 22, 1978.
Before Judges Allcorn, Morgan and Horn.
Messrs. Checki, Politan & Bergman, attorneys for appellant (Messrs. Leonard H. Marks and Joel I. Bergman on the brief).

Opinion:
The opinion of the court was delivered by
Morgan, J. A. D.
In this appeal we confront problems raised by the application of the income continuation provision of the New Jersey Automobile Reparation Reform Act, N. J. S. A. 39:6A-4(b), to an alleged loss of income suffered by a commissioned salesman as a result of injuries sustained in an automobile accident. The stipulated facts upon which the trial judge ruled were that during specified periods after plaintiff's accident his cash income increased over what it had been before the accident. Accordingly, the trial judge ruled that plaintiff suffered no income loss during those periods and entered judgment for the insurance carrier from which plaintiff appeals. 146 N. J. Super. 69 (Law Div. 1976).
The uncontroverted facts, included in .the" parties''stipulation which formed the basis for the challenged ruling, dis close that on March 23, 1973 plaintiff sustained injuries in an automobile accident which resulted in various periods of total or partial inability to work at his usual occupation, that of a manufacturer's representative selling toys on a commission basis. He was, at the time, the holder of an automobile liability policy issued by Great American Insurance Company, defendant herein, which provided him coverage, on a first party basis, not only for minimum "income continuation benefits" in accordance with N. J. S. A. 39: 6A-4, but also extended benefits under N.J.S.A. 39:6A-'10. He was, therefore, afforded coverage for maximum benefits in the amount of $5,200 (N. J. S. A. 39:6A-4) and $36,400 (N. J. S. A. 39:6A-10), respectively, by way of indemnification for lost income sustained from the accident-related physical disability.
The nature of plaintiff's work is such that part can be performed at home, such as telephone communications with accounts and the mailing of catalogs. The "field work" component of his job involves personal visits to prospective purchasers to provide exhibits and establish personal rapport. Furthermore, some income consists of delayed payments of commissions based upon previous sales by way of reorder and so-called "residuals." Hence, even during periods in which plaintiff is totally unable to work, that is, even when he is unable to work on the telephone and by mail, he nevertheless receives some income by way of these commissions derived from earlier work.
The parties stipulated that plaintiff was totally disabled from this accident between March 23, 1973 and September 20, 1973. During that period he received the full amount to which he deemed himself entitled, $400 a week.
Ho was partially disabled from September 20, 1973 until June 12, 1974 to the extent that ho was able to work three days out of the week, or at 60% of capacity. During a portion of that period, from September 21, 1973 to December 14, 1973, he received from defendant 40% of the maximum available, or $160 a week. During the remainder thereof he received nothing.
Erom June 12, 1974 until January 7, 1975 lie was again disabled by reason of surgery required by bis injuries received in tbe .accident. Between June 6, 1974 and September 20, 1974, a portion of the foregoing period, he was paid at the maximum, $400 a week> and nothing for the remainder of that period of total disability. Hence, for a portion of the period in which the parties admit plaintiff was totally disabled from working, he was paid nothing by way of income continuation benefits.
On January 8, 1975 plaintiff resumed his occupation "on the same 60% basis as theretofore, and that partial disability is expected to continue for a prolonged period of time." He has, however, been receiving nothing for lost income since the date of his last payment in September 1974.
On January 13, 1975 defendant advised plaintiff that because plaintiff's income had increased from 1972 through 1974, he was deemed ineligible for further income continuation benefits. Defendant's position was and is that since plaintiff had not demonstrated a diminution of income, the mere fact that he was unable to work, either partially or totally, as a result of his injuries, did not entitle him to any income continuation benefits. Plaintiff, thereupon, instituted the present declaratory judgment suit which he lost, at the trial level, when the trial judge in substance adopted defendant's position.
We must frankly express our regret at the poverty of facts surrounding the issue upon which we are called to rule. Only the barely essential facts were stipulated. Questions arising from those facts not mentioned must, therefore, go unanswered. Eor example, it would help to know whether plaintiff's estimate that he is now working at 60% of capacity includes field work or whether that estimate is based upon the relationship between the normal amount of home work and field work. The stipulation does not say. It would have been helpful had we known of the extent of plaintiff's gain in income during the 1972-1974' period and from what source or sources his income was derived during that period. As tlie matter now stands, we can only speculate as to whether that income came from residuals and reorders, or from field work, or work at home or from some other source, unconnected with his work, or some form of earnings on capital.
The issue presented here is a novel one and arises under relatively new legislation. We have stressed before the desirability of a comprehensive factual development as a basis for .considering new issues with substantial, and perhaps unforeseen, ramifications. The case should have been tried and should not have been decided under such a sparse factual stipulation. Nonetheless, the issue is here, the trial court opinion has been published, and rather than remand the matter for trial, we will consider the issne in its present form, and leave what other problems may develop from a more searching factual investigation to some other day.
The statutory foundation for plaintiff's claim, N. J. S. A. 39:6A — 4(b), reads as follows:
b. Income continuation benefits. The payment of the loss of income of an income producer as a result of bodily injury disability, subject to a maximum weekly payment of $100.00 per week. Such sums shall be payable during the life of the injured person and shall be subject to an amount or limit of $5,200.00 on account of injury to any one person, in any one accident.
"Income" is defined to include "salary, wages, tips, commissions, fees and other earnings derived from work or employment." N. J. S. A. 39 :6A-2. Benefits are therefore provided for loss of commissions resulting from a covered event.
The precise issue posed for resolution is whether, under the stipulated facts, plaintiff has, or may have, lost income despite the fact that his cash receipts during his period of disability, partial and total, exceed those he was receiving before the accident. The trial judge answered this question in the negative, finding that plaintiff's increased income while disabled repelled the notion that he had lost income during that period; although disabled in fact, the disability had no effect on income production. We disagree with this conclusion to the extent that it purports to state a principle of substantive law that where cash receipts after a disabling accident equal or exceed those received before the accident, the victim has suffered no income loss within the meaning of N. J. S. A. 39:6A-4 (b). Viewed as a question of fact, such a conclusion may or may not be warranted. Viewed as a statement of substantive law, it is in our view incorrect.
The measure of the income loss referred to in N. J. S. A. 39:6A-4(b) is the difference between what one would have earned had injury not occurred and what one did earn. The formula applies to all income producers, wage earners, those on tips, commissions, royalties, contingent fees and any other sort of income. The evidence adduced to support a claim for lost commissions or contingent fees may well, and probably will, differ from that offered in support of a claim for loss of salary and the loss incurred, if any, may be more difficult to prove to the required degree of certainty, but the formula by which the loss is measured remains the same.
Application of this formula to a salaried worker would permit his recovery of a salary increase scheduled to commence one week after a disabling accident; had the accident not occurred, the worker would have earned the increased salary even though the salary was greater than that which he earned before the accident. He should be permitted to establish that fact. A regularly received annual increment should be recoverable even though the employee was not entitled to it before the accident. A salaried worker should be permitted to prove that he was scheduled to commence work on a second part-time job with which the accident interfered. In all of these hypothetical situations, the injured person, a salaried worker, would be permitted to show what he would have earned had he not been injured. The difference between that figure and what he did earn after the ac cident measures his income loss. He should not, as a matter of law, be limited to what he was earning before the accident.
The same holds true with other more problematic forms of income. One whose income is computed solely on a commission basis should be permitted to show what he would have earned had the disabling accident not occurred. He, too, should not be limited to his pre-accident earnings.
The unique problems encountered in calculating a loss of commission income should not go without comment. Frequently, as in this ease, receipt of portions of a commission earned before an accident, commissions on reorders and residuals, are actually received long after the original transaction upon which the commissions are based. Those portions of the commission earned would be received whatever the later degree of disability. It is, therefore, more than conceivable that in the case of commissioned salesmen, income after an accident will remain at a constant level, increase or decrease without such variations in income level revealing the magnitude of a loss, measured by the above formula. Had injury not occurred, the injured person would have received those deferred payments for past work, and also commissions from successful transactions had he not been injured. His loss is not conclusively measured by what he was receiving before the accident, although such level of income is doubtless evidential and even persuasive. KatheT, his loss is measured according to the same formula as is the wage earner's loss, that is, the difference between what he earned after the accident and what he would have earned had he not been injured.
It may be that the trial judge was correct in concluding that "as the field work ability on one side of the scale decreases (due to decreased physical mobility), proportionately 'at home' work ability increases (due to plaintiff's inability to be on the road)," thus avoiding the income disabling effects of the injury. The difficulty with this conclusion is that it is purely speculative. Nothing in the stipu lated facts supports it. Plaintiff's increase of income may have resulted solély from commissions on reorders and residuals which he would have received in any event and not from an increased use of the telephone. If that is so, plaintiff may well he able to prove that had he been able to perform his normal mode of work in the field, his resulting income, compounded of both the residuals, orders from phone work, together with newly earned commissions, would have been greater. If successful in this proof endeavor, plaintiff would be entitled to recover the difference between that greater income and what he actually earned, or received. In any event, he should not, as a matter of law, be restricted to that which he received before the accident.
By adopting the foregoing formula by which actual income loss is to be measured, we are not attempting to compensate for "loss of earning capacity," as our dissenting brother suggests. Income continuation benefits provided under the no fault law do not redress diminished earning capacity, a traditional item of damage in third party tort cases, but rather indemnify for actual' earning loss suffered as a result of a covered automobile accident. That the actual earning loss may, in many cases, be the same as the" extent of injury to earning capacity during periods up to trial, does not, however, suggest that the two measures of loss are, in fact, identical concepts. The differences between the two concepts are both obvious and subtle. For example, diminished earning capacity is a concept frequently invoked in tort cases when the accident victim is not employed when injured or when he is a minor who has established no standard by which an earning loss can be measured or when the victim's employer has paid him notwithstanding his absence. But see Hunter v. Hartford Acc. and Indem. Co., 155 N. J. Super. 16 (Law Div. 1977).
We stress, in light of the dissenting opinion, that the formula by which earning loss is to be determined measures just that and not diminished earning capacity. The inquiry is, what would the victim have earned had he not been in jured. The rest is in the realm of proof, to which ordinary principles of evidence, including the necessity for reasonable certainty, apply. Distinctions between value of time and earning loss, seized upon by the parties as characterizing the difference in their positions, may be of little more than semantic interest. If calculating the value of time lost from an occupation provides some indication of actual monetary loss, then it should be received as at least probative of that loss. Simply because earning loss rather than injury to earning capacity is being measured does not require rejection of all evidence probative of the latter as long as it is also probative of the former. Although tort damage concepts cannot be applied wholesale in determining benefits under the no fault law, they can be used to the extent appropriate since they come to us embellished with years of experience in their application. Woschenko v. C. Schmidt & Sons, 2 N. J. 269, 277-78 (1949); Smith v. Red Top Taxicab Corp., 111 N. J. L. 439 (E. & A. 1933); Alexander v. Cheasler, 110 N. J. L. 95 (E. & A. 1933). Solutions to proof problems encountered in the common law tort context with the self-employed or those earning on a contingent basis, such as the commissioned salesman, should not be rejected if otherwise useful in the no fault context.
There is no question but that in this case plaintiff, an income producer, received nothing from defendant on account of periods in which he was admitted to be totally disabled from performing any of the tasks incident to his employment. None of the income received during or for that period, therefore, could have been the product of any work performed during that same period. Mere common sense suggests that he lost some income resulting from this total inability to pursue his employment. The same holds true for periods of partial incapacity. Failure to try this case has obscured the sources of the income he was receiving and has disabled the trial court and us from determining the extent of the loss.
We, therefore, reverse the judgment and remand the ease for trial.