Adams v. Keystone Ins. Co.

• Decision Date: 10 May 1993
• Citation: 624 A.2d 1008,264 N.J.Super. 367
• Parties: Edward ADAMS, Plaintiff-Appellant, v. KEYSTONE INSURANCE COMPANY, Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 367

264 N.J.Super. 367

624 A.2d 1008

Edward ADAMS, Plaintiff-Appellant, v. KEYSTONE INSURANCE COMPANY, Defendant-Respondent.

Superior Court of New Jersey Appellate Division.

Argued Feb. 17, 1993.

Decided May 10, 1993.

James M. Clancy, Cherry Hill, for plaintiff-appellant (Friedman, Bafundo & Porter, attorneys; Mr. Clancy, of counsel and on the brief).

J. Robert McGroarty, Deptford, for defendant-respondent (Mr. McGroarty, attorney, and on the brief).

Allan J. Nodes, Deputy Atty. Gen., for intervenor Atty. Gen. (Robert J. Del Tufo, Atty. Gen. of New Jersey, attorney; Mr. Nodes, of counsel and on the brief).

Before Judges ANTELL, SKILLMAN and VILLANUEVA.

The opinion of the court was delivered by

VILLANUEVA, J.S.C. (temporarily assigned).

On April 29, 1990, plaintiff Edward Adams was traveling in West Deptford, New Jersey, in a 1986 Ford van and became involved in an accident with a tractor trailer owned by Intercoastal Management. Plaintiff, a domiciliary of Delaware, was the named insured on the policy of insurance issued on the Ford by defendant Keystone Insurance Company ("Keystone"). The Ford was registered in Delaware, and the policy was issued under the laws of Delaware. Keystone was authorized to do business in New Jersey and does, in fact, transact business in this state. Plaintiff made demand of Keystone for personal injury protection ("PIP") benefits over and above the $15,000 provided for in his Delaware policy, pursuant to the provisions of N.J.S.A. 17:28-1.4 and N.J.S.A. 39:6A-4. Keystone denied this request.

Plaintiff filed a complaint demanding that Keystone conform plaintiff's Delaware insurance policy to meet the coverages required by N.J.S.A. 39:6A-4, pursuant to the mandate of N.J.S.A. 17:28-1.4. Keystone filed an answer admitting that there was a valid insurance policy in effect under Delaware law, plaintiff was involved in an automobile accident on April 29, 1990, and Keystone was authorized to transact business in New Jersey. Keystone denied all other allegations.

Plaintiff filed a motion for partial summary judgment contending that under N.J.S.A. 17:28-1.4 Keystone was required to provide additional benefits. Keystone filed a cross-motion for summary judgment to dismiss the complaint.

Plaintiff argued that, pursuant to N.J.S.A. 17:28-1.4, he is entitled to the claimed benefits because the New Jersey statute requires all insurance companies that transact business in New Jersey to conform all of their insurance policies, even if they are not written in New Jersey for New Jersey residents, to provide benefits equivalent to those mandated by the New Jersey no-fault law to cover an accident in New Jersey. Keystone argued that N.J.S.A. 17:28-1.4 statute does not apply to the present situation, and that plaintiff must accept the benefits provided by his Delaware policy. Keystone also argued that N.J.S.A. 17:28-1.4 is unconstitutional. Because the validity of a state statute was questioned, the court granted the Attorney General's motion to intervene. See R. 4:28-4.

Even though the parties requested oral argument, the court rendered its decision in plaintiff's favor without hearing oral argument. Keystone filed a motion for reconsideration and requested oral argument. The matter was then argued and the court denied plaintiff's motion for partial summary judgment and granted Keystone's cross-motion for summary judgment. Plaintiff then appealed. We reverse.

I.

Keystone contends that plaintiff cannot recover because plaintiff's state of residence does not offer such benefits to New Jersey residents and N.J.S.A. 17:28-1.4 should be construed so as to apply only to vehicles registered or principally garaged in New Jersey.

N.J.S.A. 17:28-1.4 sets forth:

Any insurer authorized to transact or transacting automobile or motor vehicle insurance business in this State, or controlling or controlled by, or under common control by, or with, an insurer authorized to transact or transacting insurance business in this State, which sells a policy providing automobile or motor vehicle liability insurance coverage, or any similar coverage, in any other state or in any province of Canada, shall include in each policy coverage to satisfy at least the liability insurance requirements of section 1 of P.L.1972, c. 197 (C. 39:6B-1) or section 3 of P.L.1972, c. 70 (C. 39:6A-3), the uninsured motorist insurance requirements of subsection a. of section 2 of P.L.1968, c. 385 (C. 17:28-1.1), and personal injury protection benefits coverage pursuant to section 4 of P.L.1972, c. 70 (C. 39:6A-4) or of section 19 of P.L.1983, c. 362 (C. 17:28-1.3), whenever the automobile or motor vehicle insured under the policy is used or operated in this State.

Any liability insurance policy subject to this section shall be construed as providing the coverage required herein, and any named insured, and any immediate family member as defined in section 14.1 or P.L.1983, c. 362 (C. 39:6A-8.1), under that policy, shall be subject to the tort option specified in subsection a. of section 8 of P.L.1972, c. 70 (C. 39:6A-8). [Emphasis supplied.]

This statute clearly requires any insurer authorized to do business in New Jersey to include New Jersey PIP coverage in a policy which is sold in another state whenever the automobile insured under the policy is operated in this state. See Healey v. Allstate Ins. Co., 225 N.J.Super. 172, 177, n. 1, 542 A.2d 4 (App.Div.1988). N.J.S.A. 17:28-1.4 also mandates that all insurance policies in cases such as plaintiff's automatically be reformed to provide the PIP coverage required under the laws of New Jersey ¹.

Keystone's argument that plaintiff should not be entitled to payment from the Fund because his state of residence does not offer such benefits to New Jersey residents lacks merit. Keystone mistakenly relies upon a section of the Unsatisfied Claim and Judgment Fund ("UCJF") law, which provides that benefits under that law shall be available to "a resident of this State or the owner of a motor vehicle registered in this State or a resident of another state ... in which recourse is afforded, to residents of this State, of substantially similar character to that provided for by this act; ..." N.J.S.A. 39:6-62. However, this section applies only to cases where "any person qualified to receive payments under the provisions of the 'Unsatisfied Claim and Judgment Fund Law' (Sec. 39:6-61 to-91) suffers bodily injury or death ... caused by a motor vehicle ... and the damages resulting from such accident or death are not satisfied due to the personal injury protection coverage not being in effect with respect to such accident." See N.J.S.A. 39:6-86.1. Such is not the case herein because plaintiff's claim is not made pursuant to UCJF law, but rather is made under N.J.S.A. 17:28-1.4 and, therefore, the definition of qualified person in N.J.S.A. 39:6-62 is not applicable. The only connection that the UCJF has to this case is that pursuant to N.J.S.A. 39:6A-4a ² it may be required to reimburse an insurer for PIP benefits in excess of $75,000, but that is independent of the UCJF law.

Keystone maintains that N.J.S.A. 17:28-1.4 should be construed to only require payment for the PIP benefits for vehicles "registered or principally garaged" in New Jersey, even if the insurance policy providing the protection is issued in another state because the legislature has, by the N.J.S.A. 17:28-1.4, mandated that "Any liability insurance policy subject to this section shall be construed as providing the coverage required herein." (Emphasis added). That language, Keystone urges, can be interpreted as requiring only that the liability coverage of a given policy comply with the liability coverage limits of N.J.S.A. 39:6B-1 and 39:6A-3 and so construed the statute would serve to protect New Jersey residents and drivers or occupants of cars in New Jersey to assure that an out-of-state tortfeasor would possess at least New Jersey's minimum liability coverage with which to compensate victims of the out-of-state tortfeasor's negligence. Therefore, Keystone concludes that such a construction of the first sentence of the second paragraph of N.J.S.A. 17:28-1.4 in conjunction with a construction of the first paragraph of N.J.S.A. 17:28-1.4 which restricted its scope of operation to vehicles garaged or registered in New Jersey would not justify allowing plaintiff, as a resident of Delaware, to procure unlimited medical expense benefits from the defendant Keystone (up to the first $75,000 less monies paid under Delaware's $15,000 medical expense benefit) and thereafter from the New Jersey Unsatisfied Claim and Judgment Fund ³.

Keystone's reliance upon N.J.S.A. 39:6A-3 and 39:6B-1 is misplaced. The issue in this case is not whether compulsory insurance was required, but rather the nature of Keystone's obligations under N.J.S.A. 17:28-1.4. Even prior to the enactment of N.J.S.A. 17:28-1.4, N.J.S.A. 39:6A-4 provided that PIP benefits must be included in any insurance policy for an "automobile registered or principally garaged in this State ..." See N.J.S.A. 39:6A-3. Clearly, the Legislature did not adopt N.J.S.A. 17:28-1.4 to state exactly the same proposition that it stated in N.J.S.A. 39:6A-3 and 39:6A-4. The trial court ignored the plain language of N.J.S.A. 17:28-1.4, thereby rendering the statute totally meaningless.

II.

Keystone also maintains that Delaware law, and not New Jersey law, should be applied to the present case, citing State Farm Ins. Co. v. Simmons' Estate, 84 N.J. 28, 417 A.2d 488 (1980), where the Court held that

in an action involving the interpretation of an automobile liability insurance contract, the law of the place of the contract will govern the determination of the rights and liabilities of the parties under the insurance policy ... unless the dominant and significant relationship of another state to the parties in the underlying issue dictates that the basic rule should yield.

[Id. at 37...