General Acc. Group v. Shimp

• Decision Date: 20 January 1977
• Citation: 147 N.J.Super. 404,371 A.2d 358
• Parties: GENERAL ACCIDENT GROUP, Plaintiff, v. William J. SHIMP et al., Defendants. William J. SHIMP, as General Administrator of the Estate of Ann M. Shimp, et al., Plaintiffs, v. GENERAL ACCIDENT GROUP, Defendant.
• Court: New Jersey Superior Court

Page 404

147 N.J.Super. 404

371 A.2d 358

GENERAL ACCIDENT GROUP, Plaintiff, v. William J. SHIMP et al., Defendants.

William J. SHIMP, as General Administrator of the Estate of Ann M. Shimp, et al., Plaintiffs, v. GENERAL ACCIDENT GROUP, Defendant.

Superior Court of New Jersey Law Division.

Jan. 20, 1977.

J. Robert McGroarty, Deptford, for General Acc. Group.

Louis D. Fletcher, Woodbury, for Shimp (Falciani & DiMuzio, Woodbury, attorneys).

KING, J.S.C.

This matter is presented to the court on a motion for summary judgment raising several distinct issues. On June 8, 1973 plaintiff's wife and child were killed as a result of injuries received in multivehicle accident on Interstate 295 in Greenwich Township, Gloucester County. An action was subsequently instituted seeking full no-fault benefits under a policy of insurance issued to plaintiff by the General Accident Group covering the automobile driven by plaintiff's wife and listing her as an insured. As part of that policy additional personal injury protection benefits were purchased by plaintiff in the amount indicated under option five. The plaintiff now seeks to recover the full amount of this additional personal injury protection endorsement as survivor benefits. This would include the following:

(a) Maximum essential services benefits equalling $14,600.

(b) The $10,000 added death benefit as a result of the death of plaintiff's wife.

(c) The $1,000 funeral expense benefit as the result of the death of plaintiff's wife.

(d) The $1,000 added funeral expense benefit as the result of the death of plaintiff's son.

Defendant carrier contends that the.$4,380 for essential services already paid to the estate represents the survivor benefits payable under N.J.S.A. 39:6A--4(d) of the act with relation back to N.J.S.A. 39:6A--4(c). . $4,380 is the amount payable under the basic endorsement and the statute when no additional options are purchased.

Plaintiff also filed a demand for arbitration against defendant under the uninsured motorist provisions of the policy referred to above. This demand for arbitration was subsequently amended to include the uninsured motorist coverage under an additional policy of insurance allegedly covering plaintiff at the time of the accident. It is the estate's contention that the coverage available to pay any award issued as a result of the pending arbitration proceedings should be the total of the two policies, and they so urge the court to hold as a matter of law.

Finally, a separate action was instituted in the matter by General Accident Group against plaintiff and the American Arbitration Association seeking a declaration that section three of the New Jersey basic personal injury protection endorsement is not violative of public policy. Section 3 of the endorsement provides for a reduction of any amount payable for economic loss under uninsured motorist coverage to the extent of personal injury protection (hereinafter PIP) benefits paid. It is the contention of the estate that any set-off of PIP benefits against the uninsured motorist coverage should be a set-off from the total amount of damages and not from the coverage. This suit has been consolidated with the suit instituted by plaintiff Shimp as there are overlapping issues of fact and law, and plaintiffs also move for summary judgment on this issue.

The court will first deal with those issues concerning the availability of maximum option 5 benefits as survivor benefits and will then discuss the issues of uninsured motorist coverage and its relationship with PIP benefits.

I

Although the terms of an insurance policy may also be considered in resolution of a dispute, the relevant statutory provisions control a contract of insurance. Maros v. Transamerica Ins. Co., 143 N.J.Super. 307, 362 A.2d 1296 (Law.Div.1976); see also, Peraglia v. Jones, 120 N.J.Super. 518, 295 A.2d 207 (App.Div.1972). The relevant parts of N.J.S.A. 39:6A--4 (the New Jersey Automobile Reparation Reform Act, hereinafter act) provide Personal injury protection coverage, regardless of fault

Every automobile liability insurance policy insuring an automobile as defined in this act against loss resulting from liability imposed by law for bodily injury, death and property damage sustained by any person arising out of ownership, operation, maintenance or use of an automobile shall provide additional coverage, as defined herein below, under provisions approved by the Commissioner of Insurance, for the payment of benefits without regard to negligence, liability or fault of any kind, to the named insured and members of his family residing in his household who sustained bodily injury as a result of an accident involving an automobile, to other persons sustaining bodily injury while occupying the automobile of the named insured or while using such automobile with the permission of the named insured and to pedestrians, sustaining bodily injury caused by the named insured's automobile or struck by an object propelled by or from such automobile. 'Additional coverage' means and includes:

c. Essential services benefits.

Payment of essential services benefits to an injured person shall be made in reimbursement of necessary and reasonable expenses incurred for such substitute essential services ordinarily performed by the injured person for himself, his family and members of the family residing in the household, subject to an amount or limit of $12.00 per day. Such benefits shall be payable during the life of the injured person and shall be subject to an amount or limit of $4,380.00, on account of injury to any one person in any one accident.

d. Survivor benefits.

In the event of the death of an income producer as a result of injuries sustained in an accident entitling such person to benefits under section 4 of this act, the maximum amount of benefits which could have been paid to the income producer, but for his death, under section 4 b. shall be paid to the surviving spouse, or in the event there is no surviving spouse, then to the surviving children, and in the event there are no surviving spouse or surviving children, then to the estate of the income producer.

In the event of the death of one performing essential services as a result of injuries sustained in an accident entitling such person to benefits under section 4 c. of this act, the maximum amount of benefits which could have been paid such person, under section 4 c., shall be paid to the person incurring the expense of providing such essential services.

Section 4(d) provides the amount of survivor benefits payable to the survivors of one performing essential services if only the basic level of PIP insurance is purchased.

N.J.S.A. 39:6A--10 then provides:

Additional personal injury protection coverage

Insurers shall make available to the named insured covered under section 4, suitable additional first-party coverage for income continuation benefits, essential services benefits, survivor benefits and funeral expenses benefits. Income continuation in excess of that provided for in section 4 must be provided as an option by insurers to persons for disabilities, as long as the disability persists, up to an income level of $35,000.00 per year, with the excess between $5,200.00 and the amount of coverage contracted for to be written on the basis of 75% Of said difference. The Commissioner of Insurance is hereby authorized and empowered to establish, by rule or regulations, the amounts and terms of income continuation insurance to be provided pursuant to this section.

When interpreting a statutory mandate a court must look to the intent of the Legislature. State v. Madden, 61 N.J. 377, 389, 294 A.2d 609 (1972); Reale v. Wayne Tp., 132 N.J.Super. 100, 115, 332 A.2d 236 (Law Div.1975); Maros v. Transamerica Ins. Co., supra. N.J.S.A. 39:6A--16 clearly provides: 'This act shall be liberally construed to effect the purpose thereof.'

The Automobile Insurance Study Commission Report to the Governor and Legislature ('Reparation Reform for New Jersey Motorist'), December 1971, specifically recommended that: '(reimbursement for household services) benefits shall be available to dependent survivors where the injury is fatal' and expressed as the purpose that: 'The * * * benefits * * * provide appreciable reparation for all New Jersey accident victims promptly, fairly and efficiently.' Id. at xi, xii. The purpose expressed for offering excess loss coverage is to provide 'for those motorists who desire a greater degree of first-party insurance protection and are willing to pay an additional premium charge.' Id. at xvii.

The additional PIP endorsement issued to plaintiff did not contain a specific formula for computing survivor benefits as mandated under § 4 of the act. ¹

The endorsement only stated:

It is agreed that the New Jersey Basic Personal Injury Protection Endorsement, hereinafter called the Basic Protection Endorsement, is amended as follows, but only with respect to any amounts payable thereunder because of Bodily injury to an Eligible injured person who is specifically designated herein as a Person Insured for Additional Personal Injury Protection Coverage.

Therefore, we are referred back to the basic PIP endorsement for such formula. Section 1 of the basic endorsement defines survivor benefits as

'survivor benefits' means the amount or amounts payable in the event of the death of an Eligible injured person as determined in subdivision (1) or (2) hereof, as appropriate;

(1) if the Eligible injured person was an income producer at the time of the accident, an amount equal to the difference between $5,200 and all basic Income continuation benefits paid for any loss of Income resulting from his injury prior to his death;

(2) if the Eligible injured person ordinarily performed essential services for the care and maintenance of himself, his family or family household, an amount not to exceed the difference between.$4,380 and all basic Essential services...