Title: Jimenez v. Baglieri
Citation: N/A
Docket Number: a-25-97
State: new-jersey
Issuer: new-jersey Supreme Court
Date: January 29, 1998

(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). GARIBALDI, J., writing for a unanimous Court. The issue in this appeal is whether individuals injured by hit-and-run motorists must satisfy the verbal threshold pursuant to N.J.S.A. 39:6-70(n) in order to recover noneconomic damages from the Unsatisfied Claim and Judgment Fund ( Fund'). On July 2,1991, while on her way to work, Jesenia Jimenez, a pedestrian, was struck by a car. The car stopped only momentarily, allowing Jimenez to catch a glimpse of the driver, but did not stop. Jimenez got up and walked to her bus stop, where she caught a bus and went to work. Within minutes of arriving, she told her employer of the incident. Because Jimenez was complaining of pain, her employer took her to the hospital where emergency room physicians treated her with ice packs and analgesics and released her. Subsequently, Jimenez sought treatment with a chiropractor, who referred her to a neurologist for tests related to her continuing headaches. The neurologist concluded that Jimenez would continue to suffer chronic periodic episodes of muscle spasm following physical or stressful events. Thereafter, Jimenez filed suit against the Commissioner of Insurance (Commissioner) and the Unsatisfied Claim and Judgment Fund pursuant to N.J.S.A. 39:6-78. The Commissioner and the Fund filed a motion for summary judgment, asserting that the claim should be dismissed because Jimenez failed to present sufficient evidence of injuries satisfying the verbal threshold, as required by N.J.S.A. 39:6-70(n) (Section 70(n)). The trial court denied that motion and held, as a matter of law, that the verbal threshold did not apply. A jury trial on the liability portion of the case resulted in a judgment against the unknown tortfeasor, holding that person one hundred percent responsible for the accident and Jimenez's injuries. Thereafter, on the scheduled date of the damages trial, defendants moved for a one-day adjournment due to the unavailability of their medical expert. The trial court denied the motion and the jury returned a verdict in favor of Jimenez. A judgment was entered, which also required the Fund to pay personal injury protection (PIP) benefits to Jimenez. The Commissioner and the Fund appealed, and the Appellate Division affirmed the trial court's denial of the Funds's summary judgment motion. The panel specifically concluded that the verbal threshold does not apply to persons injured by hit-and-run motorists. The panel also held that the trial court had abused its discretion in denying the one-day adjournment and, therefore, remanded the case for a new trial on damages. The Supreme Court granted the Commissioner's petition for certification. HELD: Claimants injured in hit-and-run accidents must satisfy the verbal threshold to recover noneconomic damages from the Unsatisfied Claim and Judgment Fund. 1. Although the purpose of the Fund is to provide a measure of relief to persons who sustain losses inflicted by financially irresponsible or unknown owners and operators of motor vehicles, it was never intended to make every claimant whole or to compensate all accident victims. (pp. 4-8) 2. As part of its design to reduce automobile insurance premiums in the State of New Jersey, the Legislature enacted the Verbal Threshold Law, which allows persons who choose the verbal threshold option to recover for noneconomic losses only for those personal injuries that fit into one of nine specified categories. (pp. 8-9) 3. As the victim of a hit-and-run driver, Jimenez's only recourse for recovery is to the Fund, and that recovery is governed by the provisions of the Fund Act. (pp. 8-11) 4. Because courts faced with the question of whether victims of hit-and-run accidents must satisfy the verbal threshold have reached different conclusions and because each interpretation is plausible, the intent of the Legislature must be deduced. (pp. 11-12) 5. Since the enactment of the Fund Act, the Legislature has continuously sought to preserve the Fund's assets. (pp. 12-13) 6. The history of the Fund Act demonstrates the Legislature's intent to treat claimants injured in hit-and-run accidents and claimants injured by known uninsured drivers alike. (pp. 13-14) 7. Courts have been reluctant to construe the language of the Fund Act strictly, particularly where the words could be read as creating a distinction between the two classes of claimants. (pp. 15-16) 8. Courts have repeatedly stressed their role in protecting the assets of the Fund against fraud and abuse because, in essence, the judiciary is the guardian of the trust monies represented by our statutory Funds. (p. 16) 9. To construe the Fund Act to require only victims of uninsured drivers to meet the verbal threshold, and not those of hit-and-run accidents, would encourage those injured by uninsured drivers to claim that they were injured in a hit-and-run accident, and would discourage those injured in hit-and-run accidents from making reasonable efforts to ascertain the identity of the vehicle involved. (pp. 16-17) 10. Eliminating the verbal threshold for hit-and-run claims would deplete the Fund because the Commissioner cannot exercise his right of subrogation against unknown tortfeasors. (pp. 17-18) 11. Requiring eligible hit-and-run claimants to satisfy the verbal threshold furthers the Legislature's goal of eliminating minor personal injury automobile negligence cases from the court system and furthers the Fund Act's goal of providing limited relief to claimants to prevent those injured from having to absorb the entire economic loss. (pp. 18-19) Judgment of the Appellate Division is REVERSED and the matter is REMANDED to the trial court for reconsideration of the Commissioner's motion for summary judgment. CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, STEIN and COLEMAN join in JUSTICE GARIBALDI's opinion. SUPREME COURT OF NEW JERSEY A- 25 September Term 1997 JESENIA JIMENEZ, Plaintiff-Respondent, v. WILLIAM BAGLIERI, JOHN DOE (name being fictitious), ABC CORP. (name being fictitious) and MATERIAL DAMAGE ADJUSTMENT CORP., as servicing carrier for the MARKET TRANSITION FACILITY, Defendants, and SAMUEL FORTUNATO, COMMISSIONER OF INSURANCE AND UNSATISFIED CLAIM AND JUDGMENT FUND BOARD, Defendants-Appellants. Argued October 20, 1997 -- Decided January 29, 1998 On certification to the Superior Court, Appellate Division, whose opinion is reported at 295 N.J. Super. 162 (1996). Jeffrey L. Love argued the cause for appellants (Beattie Padovano, attorneys). Douglas D. Burgess argued the cause for respondent (Bross, Strickland &amp; Burgess, attorneys). The opinion of the Court was delivered by GARIBALDI, J. This appeal presents the issue of whether individuals injured by hit-and-run motorists must satisfy the verbal threshold pursuant to N.J.S.A. 39:6-70(n), to recover noneconomic damages from the Unsatisfied Claim and Judgment Fund (Fund or UCJF). We conclude the Legislature intended that claimants injured in hit-and-run accidents must satisfy the verbal threshold to recover noneconomic damages from the Fund. headaches. Dr. Burger concluded that plaintiff would continue to suffer chronic periodic episodes of muscle spasm following physical or stressful events. Based on a witness's partial identification of the license plate, plaintiff filed suit against William Baglieri, as the operator of the vehicle that had injured her. Plaintiff also named Samuel Fortunato, State of New Jersey Commissioner of Insurance (Commissioner), and the Unsatisfied Claim and Judgment Fund Board as defendants pursuant to N.J.S.A. 39:6-78. Plaintiff sought medical expenses from the Fund and personal injury protection benefits from the Material Damages Adjustment Corporation (MDA), the servicing carrier for Baglieri's insurance provider. After it was established that neither Baglieri nor his car were involved in the accident, the Law Division granted summary judgment in favor of Baglieri and MDA. The Commissioner and the Fund filed a motion for summary judgment, asserting that the claim should be dismissed because plaintiff failed to present sufficient evidence of injuries satisfying the verbal threshold, as required by N.J.S.A. 39:6-70(n) (Section 70(n)). The court denied that motion and held as a matter of law that the verbal threshold did not apply. A jury trial on the liability portion of the case resulted in a judgment against the unknown tortfeasor, holding that person one hundred percent liable for the accident and plaintiff's injuries. The damages portion of the case was set for trial on October 13, 1995; however, it was rescheduled for November 1, 1995 because plaintiff's attorney was involved in an automobile accident. On November 1, 1995, defendants moved for a one-day adjournment because their medical expert was unavailable to testify on the rescheduled trial date. The court denied the motion. The jury returned a verdict in favor of plaintiff in the amount of $25,000. On November 17, 1995, judgment was entered on behalf of plaintiff in the reduced amount of $15,000 pursuant to N.J.S.A. 39:6-73. Subsequently, an amended judgment was entered pursuant to N.J.S.A. 39:6-69, requiring the Fund to pay personal injury protection (PIP) benefits to plaintiff. Defendants appealed, and the Appellate Division affirmed the trial court's denial of the Fund's summary judgment motion. The panel, relying on Rivera v. Fortunato, 285 N.J. Super. 168 (Law Div. 1996), concluded that the verbal threshold does not apply to plaintiffs injured by hit-and-run motorists. 295 N.J. Super. 162 (1996). The court also held that the trial court had abused its discretion in denying the one-day adjournment, and therefore, the court remanded the case for a new trial on damages. We granted the Commissioner's petition for certification, 148 N.J. 461 (1997). Act),See footnote 1 to provide for the establishment, maintenance, and administration of a fund for the payment of damages for personal injuries or property damage arising out of accidents involving uninsured or unknown owners of automobiles. Only claimants who are statutorily qualified under N.J.S.A. 39:6-62 may recover benefits under the Fund. A qualified person is defined as one who lacks recourse to uninsured motorist benefits under an applicable insurance policy. N.J.S.A. 39:6-62. Benefits are provided to two classes of individuals, those injured by known uninsured motor vehicles, N.J.S.A. 39:6-69, and those injured by hit-and-run drivers, N.J.S.A. 39:6-78. That plaintiff is a qualified person to recover benefits under the Fund Act is undisputed. The issue is whether, as a victim of a hit-and-run driver, she is subject to the verbal threshold requirements established in N.J.S.A. 39:6A-8. The Commissioner asserts that Section 70(n) applies and, therefore, for an eligible claimant injured in a hit-and-run accident to recover noneconomic damages from the UCJF, he or she must have suffered an injury that satisfies the verbal threshold. Plaintiff asserts, however, that Section 70(n), and thus the verbal threshold, is limited in application to cases involving known uninsured drivers, and does not apply to accidents involving hit-and-run motorists. To resolve that issue, we first review the Legislature's intent in enacting the Fund Act and the verbal threshold. excess of $500, but not more than $5,000, for property damage per accident, N.J.S.A. 39:6-69. To be eligible for Fund benefits, claimants must comply with numerous procedural requirements. See, e.g., N.J.S.A. 39:6-65 and -80. The Fund Act contains separate sections governing hearings for those injured by known uninsured drivers from whom damages cannot be recovered, N.J.S.A. 39:6-70, and for those injured in hit-and-run accidents, N.J.S.A. 39:6-78. For hit-and-run accidents, the Fund Act provides that no judgment against the Commissioner shall be entered unless the court is satisfied, upon the hearing of the action, that: (a) the plaintiff has given the Board written notice of intent to make a claim within the time permitted by N.J.S.A. 39:6-65, (b) the injuries are not covered by workers' compensation laws, (c) the plaintiff was not the owner of an uninsured motor vehicle at the time of the accident or operating an automobile in violation of an order of suspension or revocation, (d) the plaintiff has a cause of action against the operator or owner of the hit-and-run vehicle, (e) all reasonable efforts have been made to identify the vehicle and its owner, and (f) the action is not brought on behalf of an insurer under the circumstances prohibited by N.J.S.A. 39:6-70(1). N.J.S.A. 39:6-78(a)-(f); Rivera, supra, 285 N.J. Super. at 172. The hearing requirements in N.J.S.A. 39:6-70 for accidents involving known uninsured automobiles are similar to the provisions of N.J.S.A. 39:6-78. There are, however, requirements for victims of known uninsured drivers that are unique to those accidents. Such claimants must first recover a judgment against the driver of the automobile and execute on that judgment before seeking payment from the Fund. N.J.S.A. 39:6-70(h)-(k). Because the victim of a known uninsured driver, unlike the victim of a hit-and-run driver, is seeking a judgment against a known person, that additional requirement is self-explanatory. personal injuries that fit into one of nine specified categories.See footnote 2 N.J.S.A. 39:6A-8a; Shaw, supra, 129 N.J. at 297. The traditional tort option, on the other hand, permits unrestricted recovery of noneconomic damages. N.J.S.A. 39:6A-8b. An insured who elects the tort option pays a higher premium in return for the unlimited right to sue. N.J.S.A. 39:6A-8.1a; Shaw, supra, 129 N.J. at 297. An insured who fails to select a form of coverage is deemed to have chosen the verbal threshold. N.J.S.A. 39:6A-8.1b; Shaw, supra, 129 N.J. at 297. As originally enacted, the verbal threshold applied to all insureds who did not elect the tort option, and to PIP claimants lacking any insurance, such as pedestrians or passengers. New Jersey Mfrs. Ins. Co., supra, 138 N.J. at 188. In 1990, N.J.S.A. 39:6A-8b was amended to provide that claimants who are not required to purchase automobile insurance, such as passengers and pedestrians who do not own vehicles or who are not immediate family members of vehicle owners, such as plaintiff in this case, are no longer deemed to have chosen the verbal threshold. Sumner v. Unsatisfied Claim and Judgment Fund, 288 N.J. Super. 384, 388 (App. Div. 1996). Accordingly, had plaintiff been struck by a known insured driver, she would not have been subject to the verbal threshold and would have recovered damages from the tortfeasor driver's insurance company. However, as the victim of a hit-and-run driver, plaintiff's only recourse for recovery is to the Fund, and that recovery is governed by the provisions of the Fund Act. Co., 499 U.S. 244, 250-51, 111 S. Ct. 1227, 1231-32, 113 L. Ed 2d 274, 283 (1991)) (alterations in original). And, [i]n the absence of specific guidance, our task is to discern the intent of the Legislature not only from the terms of the Act, but also from its structure, history and purpose. Martin, supra, 141 N.J. at 285 (quoting Fiore v. Consolidated Freightways, 140 N.J. 452, 471 (1995)). Ultimately, [i]t is not the words but the internal sense of the law that controls. Roig v. Kelsey, 135 N.J. 500, 516 (1994) (quoting Wollen v. Fort Lee, 27 N.J. 408, 418 (1958)). Also, in interpreting the Fund Act, we must bear in mind that [t]hat which is clearly implied is as much a part of the law as that which is expressed. Giles v. Gassert, 23 N.J. 22, 35 (1956). Since its enactment, the Legislature has continuously sought to preserve the Fund's assets. In 1972, the Legislature amended the No-Fault Act. L. 1972, c. 203. "One of the motivating thrusts behind the 1972 reform package was the extraordinary pressures on the . . . Fund by reason of the claims of individuals injured by uninsured motorists." Craig &amp; Pomeroy, supra, 1:2-4 (b)(3). Because that statutory scheme failed to slow the increase in premium rates, the Legislature enacted the Cost Containment Act, L. 1983, c. 362, 2. The primary goal of that Act, of which Section 70(n) was a part, was to bring about long sought after reductions in premiums for New Jersey motorists. Statement of Governor Thomas H. Kean on signing Bill No. A-3981 (Oct. 4, 1983). In 1988, the Legislature enacted the Verbal Threshold Law. To protect the assets of the UCJF and to reduce the number of lawsuits, the Legislature included the requirement in Section 70(n) that Fund claimants must satisfy the verbal threshold. See, e.g., Oswin v. Shaw, supra, 129 N.J. at 318 (holding that the purpose of the verbal threshold and no fault statute is "to reduce the amount of litigation and to hold down the cost of premiums ); Governor's Reconsideration and Recommendation Statement, 3-4 (Aug. 4, 1988)(finding verbal threshold's essential purpose [is] closing the door to all lawsuits except those involving bona fide serious injuries ). claimants the same by making PIP benefits available to both. See N.J.S.A. 39:6-86.1 and -86.4. The Legislature's desire to treat both classes equally is further supported by looking at the requirements for the two classes of claimants to collect from the Fund set forth in N.J.S.A. 39:6-70 and -78. In those sections only section 70(n) "does not on its face appear to be sui generis to uninsured motorist claims [and] is neither restated nor incorporated by reference in [the sections] governing hit-and-run claims." Rivera, supra, 285 N.J. Super. at 176. Although it could be argued that its placement signals a desire to apply Section 70(n) solely to victims of known uninsured drivers, ibid., we believe that the Legislature's purpose was to treat both classes of claimants the same. Indeed there is no indication that the Legislature intended to treat the two classes of claimants differently. Nor is there any reason why the Legislature would subject victims of known uninsured drivers to the verbal threshold, while excluding victims of hit-and-run accidents from the verbal threshold. From the Fund's perspective such a distinction is unjustifiable. It makes no sense. Neither the victim of a hit-and-run driver nor the victim of a known uninsured driver is able to recover benefits from the tortfeasor who caused the accident. Because the intent of the Legislature is to treat the two classes of claimants alike, we see no reason to impose an arbitrary distinction between them. the failure of the Legislature to include the exclusion clause in N.J.S.A. 39:6-78 was more likely due to the Legislature's failure to foresee the exclusion clause's applicability to hit-and-run accidents than to a desire to treat hit-and-run claimants differently. Ibid. damages, whereas claimants injured in hit-and-run accidents can recover without limitations. That construction might encourage those injured by uninsured drivers to claim they were injured in a hit-and-run accident, and would discourage those injured in hit-and-run accidents from making reasonable efforts to ascertain the identity of the vehicle involved. That result would not only be contrary to our responsibility to protect the Fund from fraud and abuse, but also would vitiate N.J.S.A. 39:6-78(e)'s requirement that claimants take reasonable efforts to ascertain the identity of the driver and owner of the vehicle. Moreover, eliminating the verbal threshold for hit-and-run claims would deplete the Fund because the Commissioner cannot exercise his right of subrogation against unknown tortfeasors. It would also result in more lawsuits and court congestion, resulting in increased costs that ultimately will be passed on to New Jersey insureds. Assets of the UCJF consist of assessments levied by the Commissioner against insurers writing motor vehicle policies in New Jersey, "in the proportion that the net written premiums of each bear to the aggregate net direct written premiums of all insurers." N.J.S.A. 39:6-63(d). All insurers doing business in New Jersey are informed annually of their assessed contribution to the Fund. Ibid. If, after receiving the assessed amounts, the Fund lacks sufficient assets, the Commissioner reassesses the insurers. Ibid. If the Fund is depleted by hit-and-run claimants seeking noneconomic damages, insurers will be assessed greater amounts by the Commissioner. The insurers undoubtedly will attempt to recoup those costs by passing them on to insureds. PIP benefits, see N.J.S.A. 39:86.4, and recover for bodily injury and property damage not covered by PIP, see N.J.S.A. 39:6-69. We are convinced the Legislature did not intend to exempt eligible claimants injured in hit-and-run accidents from satisfying the verbal threshold. If the Legislature disagrees with our construction of the Fund Act, it may, of course, enact clarifying legislation. CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, STEIN, and COLEMAN join in JUSTICE GARIBALDI's opinion. NO. A-25 JESENIA JIMENEZ, Plaintiff-Respondent, v. WILLIAM BAGLIERI, et al., Defendants, and SAMUEL FORTUNATO, etc., et al., Defendants-Appellants. DECIDED