Holmberg v. Aten

• Decision Date: 02 June 1961
• Docket Number: No. A--621,A--621
• Citation: 171 A.2d 667,68 N.J.Super. 73
• Parties: Catherine HOLMBERG, Plaintiff-Appellant, v. John ATEN, Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 73

68 N.J.Super. 73

171 A.2d 667

Catherine HOLMBERG, Plaintiff-Appellant, v. John ATEN, Defendant-Respondent.

No. A--621.

Superior Court of New Jersey

Appellate Division.

Argued May 15, 1961.

Decided June 2, 1961.

Hugh C. Spernow, Paterson, for plaintiff-appellant (Spernow & Geaney, Paterson, attorneys).

Frederick J. Wortmann, Newark, for defendant-respondent (Braff, Litvak & Ertag, Newark, attorneys; Frederick J. Wortmann, Newark, of counsel and on the brief).

Theodore I. Botter, Asst. Atty. Gen., filed a statement in lieu of brief (David D. Furman, Atty. Gen., attorney).

Before Judges CONFORD, FREUND and KILKENNY.

The opinion of the court was delivered by

FREUND, J.A.D.

Plaintiff Catherine Holmberg appeals from a final order of the Law Division, Passaic County, denying her application for payment from the Unsatisfied Claim and Judgment Fund on the ground that mandatory deductions for insurance benefits received had exceeded the amount of her negligence judgment. The main issues herein are whether these benefits were properly deductible under the operative statutes, N.J.S.A 39:6--70(m), 39:6--71, and 39:6--73, as those sections stood prior to their amendment in 1958 (L.1958, c. 98, 99), and if so, whether such a construction impairs the constitutionality of the legislation.

The facts have been stipulated for the purpose of this appeal. Plaintiff was injured on September 29, 1955, while a passenger in an automobile owned and driven by her son, Richard T. Holmberg. The Holmberg vehicle was struck by an uninsured automobile driven by defendant Aten. Plaintiff suffered severe and permanent disabling injuries and was forced to undergo treatment over a considerable period of time. Expenditures totaling more than $5,700 were made for medical treatment, hospitalization, and private nursing services.

A Superior Court action was instituted in separate counts by plaintiff and her husband, Carl O. Holmberg, suing Per quod, against Aten. At trial, after defendant had been sworn and examined, all parties concerned consented to a judgment in plaintiff's favor in the sum of $5,000 for her permanent injuries and disability, and her pain and suffering. Also by consent, Carl O. Holmberg's count for consequential damages was dismissed with prejudice. Since Aten was satisfactorily shown to be judgment-proof, plaintiff made application to the Fund for payment of her $5,000 judgment. The Fund denied liability on the ground that plaintiff had received 'other benefits' which, when credited against the judgment in accordance with the statutory directive of N.J.S.A. 39:6--71, exceeded that judgment in amount. The trial judge concurred with the view that the deductions were properly made and that, as they were in excess of the maximum statutory sum allowable from the Fund, the latter incurred no liability.

By express provision contained in the amendment thereto, L.1958, c. 98, p. 553, § 3, the pertinent statutes must be considered as they read prior to the legislative alteration. They at that time carved out a broad category of possible payments to the injured claimant, receipt of which reduced the amount allowable from the Fund. N.J.S.A. 39:6--70(m) required the applicant for payment to state.

'Whether he has recovered a judgment in an action against any other person against whom he has a cause of action in respect of his damages for bodily injury or death or damage to property arising out of the accident and stating the amounts recovered upon such judgments Or the amounts, if any, received for indemnity or other benefits for such injury or death or damage to property from any person other than the operator or owner of the motor vehicle causing such injury, death or damage.' (Emphasis added.)

N.J.S.A. 39:6--71, dealing with judicial orders to the Fund directing payment, provided:

'Any amount for Compensation or indemnity for damages or other benefits which the plaintiff has received or can collect from any person other than the judgment debtor shall be deducted, from the amount due upon the judgment for payment of which claim is made.' (Emphasis added.)

And N.J.S.A. 39:6--73(c)(3) ordained that the maximum payable from the Fund 'shall be reduced by any amount received or recovered as specified in subparagraph(m) of * * * (N.J.S.A. 39:6--70).'

These statutory provisions (including the parallel section to 39:6--73, namely 39:6--84, applicable to 'hit and run' cases), were initially construed in Dixon v. Gassert, 26 N.J. 1, 138 A.2d 14, 17 (1958), wherein it was held that amounts received under an accident and health policy and a Blue Cross hospitalization contract, both issued in the claimant's name, constituted 'indemnity or other benefits' within the statutory intendment. The Supreme Court was not persuaded by the plaintiff's argument that payments made by virtue of insurance contracts were not 'for (his) injury' within the meaning of the enactment. The court opined, supra, 26 N.J. at p. 7, 138 A.2d at p. 17 that 'the words employed do not lend themselves to the limited construction urged,' but rather, 'manifest an intention to provide for the allowance of deductions of a more comprehensive nature.' Also see Minardi v. Dupont, 49 N.J.Super. 139, 139 A.2d 457 (App.Div.1958) (sums received under insurance policies for temporary disability, health and accident benefits, medical and surgical expenses, and hospital care held deductible); Fasano v. Gassert, 49 N.J.Super. 52, 138 A.2d 752 (Law Div.1958) (temporary disability, hospitalization, and medical and surgical payments held deductible).

Plaintiff urges that the form of the policies herein distinguishes this case from those cited, in that the proceeds were not distributed pursuant to her own insurance contracts but rather through instruments issued in the names of her husband and son. The payments were in fact made in the following amounts and under the following policies: (1) $2,000 was paid to the plaintiff by Utica Mutual Insurance Company under the medical payments clause of an automobile liability policy issued in the name of her son, Richard T. Holmberg; (2) an additional $2,000 was paid to the plaintiff by Utica Mutual Insurance Company under the medical payments clause of an identical policy issued in the name of her husband, Carl O. Holmberg; and (3) $1,125 was paid to Carl O. Holmberg for medical treatment and hospitalization charges incurred by him by reason of the injuries sustained by his wife, by the terms of a John Hancock Mutual Life Insurance Company policy issued through the Fuel Merchants Association of New Jersey under a contract with Carl O. Holmberg as an employee of the Chas. O. Holmberg Lumber Co.

It is plaintiff's position that her husband's foresight in protecting himself in advance against medical expenses he might legally incur because of injury to himself and members of his household 'should not deprive her of the benefits of a judgment for her actual physical injuries sustained and the pain and suffering she has undergone.' She argues that the statutory phrase, 'other benefits,' should be read in conjunction with 'indemnity,' and that it was her husband, not herself, who was indemnified by the insurance carriers; since the latter's claim for consequential damages had been dismissed, it could not be said that He was seeking judgment against the Fund under his wife's maximum allowance, see Jones v. Williams, 53 N.J.Super. 16, 146 A.2d 508 (App.Div.1958), and thus amounts paid to Him should not be deductible. In short, plaintiff claims that the insurance proceeds were not benefits which the 'plaintiff has received' (emphasis added) within the meaning of the statute. N.J.S.A. 39:6--71.

Plaintiff's argument overlooks the very significant question of the underlying purpose of our Unsatisfied Claim and Judgment Fund Law, N.J.S.A. 39:6--61 et seq. The legislation does not represent, as was pointed out by Justice Proctor in Dixon v. Gassert, supra (26 N.J., at p. 8, 138 A.2d at p. 18), an effort to make every claimant whole but rather reflects an intention to provide some basic measure of relief (at that time, up to $5,000, less a $200 deduction, N.J.S.A. 39:6--73, 39:6--84) in order to forestall the possible hardship attendant upon a claimant's absorption of the entire economic loss occasioned by the accident. Also see Corrigan v. Gassert, 27 N.J. 227, 233 (1958), 142 A.2d 209; Gray v. Tice, 52 N.J.Super. 309, 313--15, 145 A.2d 353 (Law Div.1958). Proper emphasis of this fundamental design of the statute both explains and justifies the expansive reading accorded it by the Dixon court. The crucial factor, in the court's words, was that the payments to plaintiff

'were made on account of the injuries sustained by him. The injuries constituted the contingency upon which the various insurance benefits became payable. The (statutory) language employed does not admit of any possible distinction between amounts which were received directly or indirectly 'for such injury,' in the absence of any words of limitation as to the source of such payments.' (26 N.J., supra, at pp. 7--8, 138 A.2d at page 17).

(Compare the 1958 amendment to the statute, placing 'words of limitation' upon the deductible benefit provisions. The purpose of the amendment was expressed in its legislative statement to be 'to permit persons who are entitled to recover from the fund to be paid the full amount of their judgment subject to the limiting amounts payable from the fund, but without deducting indemnities, benefits and gratuities received or due from sources other than a tort feasor or someone making a payment on his behalf.' L.1958, c. 98).

It cannot be said, in view of the statutory language prior to its modification and the judicial interpretation thereof, that an insurance carrier's medical payments or reimbursement for medical expenditures, transferred by virtue of the claimant's injuries, does not constitute a 'benefit' to the claimant. That the policies...