Gambino v. Royal Globe Ins. Companies

• Decision Date: 19 May 1981
• Citation: 86 N.J. 100,429 A.2d 1039
• Parties: Joseph GAMBINO, Plaintiff-Appellant, v. ROYAL GLOBE INSURANCE COMPANIES, Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 100

86 N.J. 100

429 A.2d 1039

Joseph GAMBINO, Plaintiff-Appellant, v. ROYAL GLOBE INSURANCE COMPANIES, Defendant-Respondent.

Supreme Court of New Jersey.

Argued Nov. 18, 1980.

Decided May 19, 1981.

Bruce M. Schragger, Trenton, for plaintiff-appellant (Schragger, Schragger & Lavine, Trenton, attorneys; Nancy R. Lichtenstein, Trenton, on the brief).

John A. Sakson, Trenton, for defendant-respondent (Stark & Stark, Trenton, attorneys).

The opinion of the Court was delivered by

HANDLER, J.

This case, together with Allstate Insurance Co. v. Skolny, --- N.J. ---, 429 A.2d 1045 (1981), decided today, presents difficult issues of statutory construction involving New Jersey's personal injury protection (PIP) statute. The problem of ascertaining legislative intent in each case requires an assessment of the meaning of statutory phraseology in the light of the principles and policies which undergird the PIP statute. In this case the interpretative issue is posed in terms of whether the plaintiff-claimant, Joseph Gambino, was an "income producer," within the meaning of the PIP statute, N.J.S.A. 39:6A-2(d) and 39:6A-4(b), at the time he was injured and disabled in an automobile accident.

I

The present case presents a rather straightforward factual setting. From September 1974 to May 1975, while acting as president of the Yellow Cab Company which he had owned for 16 years, Joseph Gambino attended college in order to acquire the educational qualifications needed to obtain an insurance broker's license. During the period of preparation for his new career, Gambino was in contact with the Raymond A. Marx Company, a seller of life insurance. It was contemplated that Gambino would join the company once he had passed his licensing exam and found a buyer for his small taxi business.

In June 1975 Gambino was licensed as an insurance broker and in late November 1975, he sold the Yellow Cab Company. It was arranged that he would commence his employment as a property-casualty broker with the Raymond A. Marx Company on January 15, 1976 at a salary of $500.00 semi-monthly. In the interim, Gambino continued as a consultant to the new owners of the taxi business until December 22 or 23, at which time he traveled to Florida for a vacation. He returned to New Jersey on January 5, 1976.

On January 13, 1976, two days before he was to start his new employment as an insurance broker, Gambino was seriously injured in an automobile accident and was unable to resume work for five months. Subsequently, he filed a claim with the defendant Royal Globe Insurance Companies (Royal Globe) for income continuation benefits, as provided for by his policy pursuant to N.J.S.A. 39:6A-4(b). ¹ Royal Globe refused to pay income continuation benefits, claiming that the plaintiff was retired on January 13, and, therefore, ineligible to receive such recompense under the statute. Gambino then filed suit in the Superior Court, asserting entitlement to these PIP benefits. The trial court granted summary judgment in favor of defendant on the ground that Gambino was not entitled to benefits under the terms of the statute, N.J.S.A. 39:6A-2(d), -4(b). An appeal was taken and this Court directly certified the case, pursuant to R. 2:12-2, while it was pending in the Appellate Division.

II

The statute under which plaintiff claims benefits provides for "income continuation benefits" for "the payment of the loss of income of an income producer as a result of bodily injury disability." N.J.S.A. 39:6A-4(b). An "income producer" in turn is defined as "a person, who at the time of the accident causing personal injury or death, was in an occupational status, earning or producing income." N.J.S.A. 39:6A-2(d). ²

Despite the assertions of defendant that the language of the statute is clear and unambiguous, the attempted literal application of the statute to the facts in this case suggests anomalous results, creating a need for statutory construction. Moreover, despite a surface clarity in the definition of the term "income producer," the statutory language is susceptible of more than a single and simple interpretation. ³ The need for judicial interpretation when confronted with such a statute was well described by Chief Justice Vanderbilt in Watt v. Mayor and Council of Borough of Franklin, 21 N.J. 274, 121 A.2d 499 (1956):

As we move away from the ideal of a clear and unambiguous statute we find statutes that on their face are clear and unequivocal but in light of related legislation and of the surrounding facts and circumstances of the case in which it is applicable, the true meaning becomes indefinite or obscure. In these instances it may be the plain meaning of the words themselves that casts doubt as to the true intention of the Legislature, or often it is the absurdity of the result flowing from a literal application of that plain meaning that causes wonder as to the true purpose of the enactment. Then, too, there are those less difficult instances in which the meaning of a statute is obviously obscure or doubtful, where the language used is per se capable of dual interpretation. When these circumstances appear the court is not only at liberty to interpret the statute but it is its solemn duty to seek out and give effect to the legislative intent evident from the aids available to it. (21 N.J. at 277-278, 121 A.2d 499.)

We are thus enjoined, in this case, to ascertain the "true purpose of the enactment" and, in this pursuit, the history of the no-fault insurance law constitutes an important aid in illuminating and "giving effect to the legislative intent."

The no-fault automobile insurance statute (PIP) was enacted by L. 1972, c. 70. It "encompasse(d) the recommendations of the Automobile Insurance Study Commission created under Joint Resolution 4 of 1970." Sponsor's Statement to L. 1972, c. 70. The Commission believed that four major concerns must be addressed by its legislative recommendations:

(1) The prompt and efficient provision of benefits for all accident injury victims. (The Reparation objective.)

(2) The reduction or stabilization of the prices charged for automobile insurance. (The Cost objective.)

(3) The ready availability of insurance coverage necessary to the provision of accident benefits. (The Availability objective.)

(4) The streamlining of the judicial procedures involved in third-party claims. (The Judicial objective.)

(Automobile Insurance Study Commission, Reparation Reform for New Jersey Motorists at 7 (December 1971) (hereinafter Commission Report ))

Of particular importance for our purposes are the reparation and judicial objectives.

The reparation objective was viewed as the "primary purpose of an automobile insurance system" and was given "priority" by the Commission in formulating the proposals which served as the basis for the PIP statute, N.J.S.A. 39:6A-1 et seq. Commission Report, supra, at 41. In short, the goal of the legislation in this regard is "(t)o maximize the flow of individual losses into payable claims ...," id. at 24, and "to provide an equitable and uniform schedule of benefits for all victims." Id. at 50. The failure of many automobile accident victims to receive any, or adequate, reimbursement for their injuries was considered a major deficiency in the tort liability system that existed prior to the institution of the no-fault law and an unwarranted hardship upon unfortunate victims. Id. at 9-11. See also Public Hearings before Commission to Study Certain Automobile Insurance Matters, Vol. 1 at 53, 71, 13A, 30A, 46A (March 30, 1971), Vol. 2 at 3, 121 (April 14, 1971), Vol. 3 at 222 (April 21, 1971) (hereinafter Public Hearings ). It was believed that once the law became effective, this problem would be alleviated and "victims of accidents involved in private passenger cars will be assured of obtaining prompt compensation for all their economic losses ...." Press Release from the Office of the Governor, June 20, 1972. The courts have repeatedly recognized the importance of interpreting the Act so as to realize this goal, finding force in the statutory mandate that the Act be liberally construed so as to effectuate its purposes. N.J.S.A. 39:6A-16. Amiano v. Ohio Casualty Ins. Co., 85 N.J. 85, 90, 424 A.2d 1179 (1981) ("PIP coverage should be given the broadest application consistent with the statutory language"); accord, Motor Club of America Ins. Co. v. Phillips, 66 N.J. 277, 293, 330 A.2d 360 (1974); Brokenbaugh v. N.J. Manufacturers Ins. Co., 158 N.J.Super. 424, 429, 386 A.2d 433 (App.Div.1978); see Service Armament Co. v. Hyland, 70 N.J. 550, 559, 362 A.2d 13 (1976) (where the purpose of legislation is "remedial and humanitarian", any exception to its coverage must be "narrowly construed" consistent with that purpose and "the plain meaning of the language").

The other important goal of the no-fault reforms that must be considered is the judicial objective. The legislation, in this regard, was designated "to minimize the workload placed upon the courts by enabling losses to pass into claims ... with a minimum of judicial intermediation." Commission Report, supra, at 24. The problem of long delays in obtaining compensation was perceived as the primary flaw in the previous system which encouraged recourse to and reliance upon the judiciary to adjudicate liability based upon the fault of the parties involved. Id. 85 N.J. at 99-100, 424 A.2d 1179. The testimony before the Committee was replete with complaints about the hardships incurred by accident victims due to the lengthy passage of time between injury and recovery that far too often occurred under the old system. ⁴ Public Hearings, supra, Vol. 1 at 29, 47, 53-54, 73, 5A, 13A, 30A, 46A, Vol. 2 at 3, 88, 122-123, Vol. 3 at 223, Vol. 4 at 43, 73, 82-83 (April 30, 1971).

In interpreting the statute to give full effect to the legislative intent, then, the statutory language must be read, whenever possible, to promote prompt payment to all injured...