Allstate Ins. Co. v. Skolny

• Citation: 429 A.2d 1045,86 N.J. 112
• Parties: ALLSTATE INSURANCE COMPANY, Plaintiff, v. Peter SKOLNY and Alma Skolny, as Administrators of the Estate of Elaine Skolny, Defendants-Appellants, and David NEWMAN and Lynda Newman, husband and wife, Defendants, v. Edward McGRORY, Defendant-Respondent.
• Decision Date: 19 May 1981
• Court: United States State Supreme Court (New Jersey)

Page 112

86 N.J. 112

429 A.2d 1045

ALLSTATE INSURANCE COMPANY, Plaintiff, v. Peter SKOLNY and Alma Skolny, as Administrators of the

Estate of Elaine Skolny, Defendants-Appellants,

and

David NEWMAN and Lynda Newman, husband and wife, Defendants, v. Edward McGRORY, Defendant-Respondent.

Supreme Court of New Jersey.

Argued Nov. 18, 1980.

Decided May 19, 1981.

Leonard F. Rappa, Linden, for defendants-appellants (Monico & Rappa, Linden, attorneys).

Mark J. Richman, Edison, for defendant-respondent (Marra, Gerstein & Richman, Edison, attorneys).

The opinion of the Court was delivered by

HANDLER, J.

As in another case decided today, Gambino v. Royal Globe Ins. Co., --- N.J. ---, 429 A.2d 1039 (1981), we are confronted with the problem of harmonizing the statutory language of the no-fault insurance enactment with legislative intent. In this case we are called upon to determine who is entitled to collect PIP survivor benefits as a result of the death of Elaine Skolny, the insured.

I

Elaine Skolny and Edward McGrory were married August 13, 1974. Nine months later the couple separated, no children having been born. Once the eighteen month period of separation required for a no-fault divorce had passed, Skolny filed for a divorce. A default was entered on April 12, 1977 when McGrory failed to answer the complaint. Before the trial court could finally adjudicate the divorce, however, Skolny died in an automobile accident on June 4, 1977. Thus, at the time of the accident, Skolny and McGrory remained legally married.

The deceased had purchased a PIP insurance policy in July 1976 from the Allstate Insurance Company. The policy included benefits purchased pursuant to N.J.S.A. 39:6A-10, in addition to those minimally required by N.J.S.A. 39:6A-4. ¹ In December 1977 Allstate filed an interpleader action, requesting that the court decide whether Edward McGrory, the decedent's husband, or the Estate of Elaine Skolny should receive those benefits payable as a result of Skolny's death. The trial judge ruled that the Estate was entitled to receive the income continuation, death, and funeral benefits provided for by the policy and our statutes and regulations. On appeal, the Appellate Division reversed as to the income continuation and death benefits, there being no dispute that the funeral benefits were properly payable to the Estate. See N.J.S.A. 39:6A-4(e). This Court granted the Estate's petition for certification. 84 N.J. 376, 420 A.2d 310.

II

The operative provision of the PIP statute, N.J.S.A. 39:6A-4(d), commands that upon the death of an income producer in an automobile accident, the surviving spouse shall receive the maximum amount of benefits that the deceased would have received had death not occurred. If there is no spouse (and no surviving children), the Estate of the income producer receives the recompense. ² The crucial inquiry here is the definition of "surviving spouse" as used in the no-fault enactment.

As we have stated in Gambino v. Royal Globe Ins. Co., supra, --- N.J. at ---, 429 A.2d 1043, "in interpreting the (PIP) statute ... the statutory language must be read, whenever possible, to promote prompt payment to all injured persons for all of their losses. Consequently, approaches which minimize resort to the judicial process, or at least do not increase reliance upon the judiciary, are strongly to be favored."

In this case, the problem does not involve whether benefits will be paid; the question is who will receive them. In that sense, the requirement that the statute be interpreted so as to provide for the broadest possible coverage is of limited salience. Instead, the concerns of prompt payment and minimal resort to judicial procedures come to the forefront and become our paramount benchmarks in evaluating the meaning of the disputed clause.

To effectuate these goals, we conclude, as we did in Gambino v. Royal Globe Ins. Co., supra, that a bright line rule was desired by the Legislature in order to forestall the propagation of time-consuming court suits. Thus, we reject the plea of the Estate that this Court apply a highly subjective "breakdown of the marriage" test, based upon the law of equitable distribution or general principles of equity and fairness, in order to determine whether a legal spouse should recover survivor benefits.

We choose to read the language of the statute literally and rely upon the long standing, clear, and commonly accepted definition of a spouse that recognizes that once a person is legally married, that person remains a spouse until the marriage is legally terminated by a conclusive judicial determination that a party is entitled to a divorce. See Parker v. Parker, 128 N.J.Super. 230, 232-233, 319 A.2d 750 (App.Div.1974); Olen v. Olen, 124 N.J.Super. 373, 377, 307 A.2d 121 (App.Div.1973), certif. den. 63 N.J. 570, 310 A.2d 484 (1973). Insurance cases in this area were not meant to be transformed into matrimonial disputes. It was not intended that courts be required to determine which married couples were "actually married," in the sense of carrying on those functions which epitomize the institution of marriage, in order to resolve extant insurance claims. ³ Nothing could be more antithetical to the goal of the PIP statute to insure prompt payment than the introduction of such factually-based disputes into insurance litigation. Our rule forestalls this calamity and provides for ease of administration of the PIP statute. ⁴

It should be no surprise that our application of the principles for the construction of the PIP statute, ante at ---, at 1046-1047, yields a result which is fully consonant with the legislative history of N.J.S.A. 39:6A-4. In the original version of the no-fault insurance act, L.1972, c. 70, section 4(d) provided for benefits to be paid to a surviving spouse only if the spouse was "dependent upon the deceased for such income." However, the survivor benefits statute was amended into its present form by L.1972, c. 203, § 3, and the requirement of dependency was eliminated. Although the history of the amendment is not explicit as to the rationale for the revision, it can be surmised that the Legislature amended N.J.S.A. 39:6A-4(d) because it believed that disputes concerning whether a surviving spouse was dependent upon a deceased would undesirably lead to judicial clutter, contrary to the stated goal of prompt payment of claims. It thus modified and clarified the statutory language in order to simplify the administration of this section of the Act.

To the extent that there may be residual concerns as to the equities of compensating the spouse, rather than the children or the Estate, under the facts of a particular case, we need only note that it is the Legislature's prerogative to make such choices as between competing objectives and to advance what it perceives to be the greater good by the passage of clear, easily administered legislation, even when such a definitively-drawn statute might lead to an apparently inequitable result in a given case. Cf. Dominion Hotel v. Arizona, 249 U.S. 265, 268, 39 S.Ct. 273, 274, 63 L.Ed.2d 597, 598 (1919) (Holmes, J.) (In enacting legislation, a legislative body does not violate the equal protection clause by refusing to cover all eventualities in that it may refuse to act where "the harm to the few concerned is thought less important than the harm to the public that would ensue if the rule laid down were made mathematically exact"); Accord, Vornado Inc. v. Hyland, 77 N.J. 347, 353, 390 A.2d 606 (1978), app. dism. 439 U.S. 1123, 99 S.Ct. 1037, 59 L.Ed.2d 84 (1979); Two Guys from Harrison, Inc. v. Furman, 32 N.J. 199, 218, 160 A.2d 265 (1960); N.J. Restaurant Assn. v. Holderman, 24 N.J. 295, 300-301, 131 A.2d 773 (1957). Thus, we reiterate that an individual must be considered a "surviving spouse" for the purposes of the statute until a conclusive determination of divorce has been reached.

III

Under the rule enunciated, Edward McGrory is the surviving spouse of Elaine Skolny for the purposes of the survivor benefits statute. ⁵ Skolny and McGrory remained legally married as of the date of her tragic accident the entry of the default prior to death notwithstanding. As noted by the Appellate Division, "the judicial acts which remained to be performed (before an official divorce could be granted) were more than non-discretionary recordation of a previous determination of record. Even had decedent survived, there would have been no divorce unless and until a trial had taken place and the necessary proofs submitted."

The Appellate Division judgment is affirmed.

PASHMAN, J., concurring.

It was Justice Holmes who said, "if it is a bad rule, that is no reason for making a bad exception to it." Ayer v. Philadelphia & Boston Face Brick Co., 159 Mass. 84, 88, 34 N.E. 177, 178 (1893). This is why I feel compelled to concur in the judgment of the Court, although my inclinations are otherwise. The Court fails to acknowledge adequately the unfairness that can result because of the way the Legislature wrote the PIP survivor benefits provision, N.J.S.A. 39:6A-4(d).

The parents of decedent Elaine Skolny, who are the co-administrators of her estate, have seen their young daughter suffer through an unsuccessful marriage, have lived the the anguish and pain of her death in an auto accident, and must now watch as her undeserving ex-husband, Edward McGrory, reaps a $23,000 windfall by her death. I believe the Legislature failed to consider such a situation when it enacted the survivor benefits provision of the PIP statute. While I agree with the essentials of the Court's opinion, our judgment must be explained in different terms lest the Court's reluctance to discuss the inequities inherent in the statute be taken as acquiescence in them.

Although the parties remained legally married until Elaine Skolny's death, in practical terms the marriage lasted for only nine months, from August 1974 to May 1975 when the couple...