Montgomery v. Daniels

CourtNew York Court of Appeals
Writing for the CourtJONES; FUCHSBERG; BREITEL, C.J., and JASEN, GABRIELLI, WACHTLER and COOKE, JJ., concur with JONES; FUCHSBERG
Citation38 N.Y.2d 41,378 N.Y.S.2d 1,340 N.E.2d 444
Parties, 340 N.E.2d 444 Michael MONTGOMERY et al., infants, by their mother and natural guardian, Brenda Montgomery et al., Respondents, et al., Plaintiffs, v. Janice DANIELS et al., Appellants, et al., Defendants, and Louis J. Lefkowitz, Attorney-General of the State of New York, Intervenor-Appellant.
Decision Date25 November 1975

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378 N.Y.S.2d 1
38 N.Y.2d 41, 340 N.E.2d 444
Michael MONTGOMERY et al., infants, by their mother and
natural guardian, Brenda Montgomery et al.,
Respondents, et al., Plaintiffs,
v.
Janice DANIELS et al., Appellants, et al., Defendants, and
Louis J. Lefkowitz, Attorney-General of the State
of New York, Intervenor-Appellant.
Court of Appeals of New York.
Nov. 25, 1975.

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David W. Peck, John L. Warden and Kenneth M. Bialo, New York City, for appellants.

Bernard S. Meyer and Henry Mark Holzer, New York City, for respondents.

Louis J. Lefkowitz, Atty. Gen. (Irving Galt and Barry Dorfman, New York City, of counsel), in his statutory capacity under section 71 of the Executive Law.

JONES, Judge.

We hold that the New York no-fault automobile accident compensation law is not unconstitutional. This case comes to us on direct appeal (N.Y.Const., art. VI, § 3, subd. b, par. (2); CPLR 5601, subd. (b), par. 2) from a judgment at Special Term which, on cross motions for summary judgment, declared article 18 of the Insurance Law in violation of the due process and equal protection clauses of the Federal and State Constitutions and a denial of the right to trial by jury guaranteed by our State Constitution.

The New York No-Fault Act

We first describe this insurance program.

Under the title, 'Comprehensive Automobile Insurance Reparations Act', article 18 of the Insurance Law (as added by L.1973, ch. 13, in full effect Feb. 1, 1974) provides a plan for compensating victims of automobile accidents without regard to fault. In essence, it is a two-pronged, partial modification of the pre-existing system of reparation for personal injuries suffered in automobile accidents under which system liability was grounded in negligence under classic principles of tort law. One prong deals with compensation; the other with limitation of tort actions.

The first prong lays down the requirement that every owner of a motor vehicle provide himself, members of his household, operators, occupants and pedestrians with compensation for 'basic economic loss' resulting from injuries occasioned by the use or operation of that vehicle in this State, regardless of fault (§ 672, subd. 1). 'Motor vehicle' is defined to exclude motorcycles from the act's coverage (§ 671, subd. 6). 'Basic economic loss', subject to a maximum of $50,000 per person, is defined to include:

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(a) Treatment Expense--All 'reasonable and necessary expenses' for medical, hospital, surgical, nursing, dental, ambulance, X ray, prescription drug and prosthetic services, as well as for psychiatric care, other professional health services, and any nonmedical remedial care rendered in accordance with a religious method of healing recognized by the laws of this State, all without limitation as to time, provided that, within one year after the date of the accident causing injury, it is ascertainable that further expenses may be incurred as a result of the injury (§ 671, subd. 1, par. (a));

(b) Lost Earnings--Loss of earnings and expenses incurred in obtaining substitute services up to $1,000 per month for not more than three years from the date of the accident (§ 671, subd. 1, par. (b)); and

(c) Other Expenses--All other reasonable and necessary expenses incurred, up to $25 per day for not more than one year from the date of the accident (§ 671, subd. 1, par. (c)).

Compensation for basic economic loss is payable as 'first party benefits' after reducing the gross amount of such loss by deducting (a) 20% Of 'lost earnings' (§ 671, subd. 2, par. (a)), (b) all amounts recoverable under State or Federal laws providing social security disability benefits or workmen's compensation benefits (§ 671, subd. 2, par. (b)), and (c) amounts deductible under the applicable insurance policy (§ 671, subd. 2, par. (c)). 'First party benefits' become due and payable 'as the loss is incurred' and 'are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained' (§ 675, subd. 1). Any dispute with the insurer as to benefits may be resolved expeditiously by submission to binding arbitration at the option of the claimant (§ 675, subd. 2).

The right to first-party benefits accrues to the injured person regardless of fault or negligence on the part of the covered person, except that the insurer may exclude from coverage a person who intentionally causes his own injury, is injured as a result of operating a motor vehicle while in an intoxicated condition or while his ability to operate such vehicle is impaired by the use of a drug, or is injured while committing an act which would constitute a felony, seeking to avoid lawful apprehension or arrest, participating in a race or speed test, or operating or occupying a vehicle he knows to be stolen (§ 672, subd. 2).

The second prong of the act imposes two limitations on tort recovery for personal injuries, applicable, however, only to actions between 'covered persons' (as defined in § 671, subd. 10): (1) there can be no duplicate tort compensation for 'basic economic loss' (§ 673, subd. 1); and (2) damages for noneconomic loss (i.e., pain and suffering) are not recoverable in tort unless the plaintiff can establish that he has

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suffered a 'serious injury' (§ 673, subd. 1). Serious injury is defined in subdivision 4 of section 671 as a personal injury:

'(a) which results in death; dismemberment; significant disfigurement; a compound or comminuted fracture; or permanent loss of use of a body organ, member, function, or system; or

'(b) if the reasonable and customary charges for medical, hospital, surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services necessarily performed as a result of the injury would exceed five hundred dollars.'

Thus, an injured party may bring a third-party tort action and may recover therein for economic loss over $50,000, for treatment expenses not ascertainable within one year of injury, for lost earnings which exceed $1,000 per month or continue beyond three years, and for other reasonable and necessary expenses which exceed $25 per day or continue after one year. Damages for pain and suffering may likewise still be recovered in a tort action if there was a 'serious injury'. Finally, article 18 erects no bar whatever to tort actions seeking recovery for personal injury against noncovered persons or for property damage against covered or noncovered persons.

Plaintiffs' Claims

Plaintiffs, each of whom was injured in a separate automobile accident occurring after February 1, 1974, the effective date of article 18, joined together in this action against their respective alleged tort-feasors and insurers seeking a declaration that article 18 is unconstitutional and void in its entirety. Plaintiffs allege in each case that because the reasonable and customary charges for medical treatment for their respective injuries will not exceed $500, they are barred under the challenged law from commencing an action for their injuries and particularly for the pain and suffering allegedly occasioned thereby. Plaintiffs' constitutional attack on article 18 is multifaceted and can be summarized as follows:

(1) Article 18 is in contravention of the due process clauses of the Federal and State Constitutions because it is without rational relationship to its purported purposes, because it abolishes plaintiffs' common-law tort remedies as motor vehicle accident victims without providing a reasonable substitute remedy, and because the phrase 'significant disfigurement' as used to define a 'serious injury' (§ 671, subd. 4, par. (a)) is void for vagueness;

(2) Article 18 violates the equal protection clauses of the Federal and State Constitutions because, in declaring who shall and who shall not be precluded from maintaining a tort action for noneconomic losses (pain and suffering), the statute establishes arbitrary and

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irrational classifications between persons injured by covered persons and those injured by noncovered persons (§ 671, subd. 10; § 673), between those persons whose treatment expenses exceed $500 and those whose expenses fall below that threshold amount (§ 671, subd. 4, par. (b); § 673), and between injuries defined as 'serious' and those excluded from that definition (§ 671, subd. 4, par. (a); § 673); and

(3) Article 18 violates the trial by jury provision of the New York State Constitution (art. I, § 2).

Plaintiffs' assertions of unconstitutionality focus, of course, on the details of article 18. We note, however, that to a very large extent the methodology of their assault would be equally applicable (or as we hold inapplicable) to any no-fault plan whatever its specifics. The techniques of their attack are those which are always available to challenge any statute in which lines of demarcation must be laid down--contentions predicated, at least implicitly, on the assumption that to draw any line involves an element of the arbitrary, that wherever the line is drawn instances can be suggested which appear to involve inequitable inclusion or exclusion (see, Infra, p. 64, 378 N.Y.S.2d 20--21, 340 N.E.2d 458). The ineluctable projection of plaintiffs' arguments is that our Legislature does not have authority to adopt any no-fault plan.

Prepassage Studies and Proceedings

Before turning to an analysis of the constitutional claims advanced, it will be helpful to review some of the studies and proceedings which preceded enactment of article 18.

Debate over the efficacy of the tort system of compensating automobile accident victims has raged for over 40 years. 1 Our Legislature in 1973 thus had available to it a staggering number of reports and studies which provided analysis of the concept of a no-fault system of reparations and to which our attention is now drawn by both plaintiffs and defendants on this appeal. 2 These studies identify at least

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four basic infirmiti or defects in the common-law fault...

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315 practice notes
  • McCann v. Scaduto
    • United States
    • New York Supreme Court Appellate Division
    • December 31, 1986
    ...Matter of Brown-Forman Distillers Corp. v. State Liq. Auth., 64 N.Y.2d 479, 485, 490 N.Y.S.2d 128, 479 N.E.2d 764; Montgomery v. Daniels, 38 N.Y.2d 41, 54-56, 378 N.Y.S.2d 1, 340 N.E.2d 444). We find no constitutional infirmity with the particular provisions of the NCAC challenged herein. S......
  • Hope v. Perales
    • United States
    • United States State Supreme Court (New York)
    • April 15, 1991
    ...and reasonable connection' between it and the promotion of the health, comfort, safety and welfare of society" ' " (Montgomery v. Daniels, 38 N.Y.2d 41, 54, 378 N.Y.S.2d 1, 340 N.E.2d 444 [1975]. A "regulation which is reasonable in relation to its subject and is adopted in the interest of ......
  • Brown-Forman Distillers Corp. v. State Liquor Authority, BROWN-FORMAN
    • United States
    • New York Court of Appeals
    • April 2, 1985
    ...Const., art. I, § 8). Preliminarily, we note that legislative enactments are presumptively constitutional (see, Montgomery v. Daniels, 38 N.Y.2d 41, 54-56, 378 N.Y.S.2d 1, 340 N.E.2d 444; Matter of Malpica-Orsini, 36 N.Y.2d 568, 570, 370 N.Y.S.2d 511, 331 N.E.2d 486, appeal dismissed sub no......
  • Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State
    • United States
    • New York Court of Appeals
    • January 18, 1990
    ...(see, Loretto v. Teleprompter Manhattan CATV Corp., 58 N.Y.2d 143, 152-153, 459 N.Y.S.2d 743, 446 N.E.2d 428; Montgomery v. Daniels, 38 N.Y.2d 41, 57, 378 N.Y.S.2d 1, 340 N.E.2d 444; People ex rel. Swift v. Luce, 204 N.Y. 478, 488, 97 N.E. 850; Matter of Stilwell, 139 N.Y. 337, 342, 34 N.E.......
  • Request a trial to view additional results
317 cases
  • McCann v. Scaduto
    • United States
    • New York Supreme Court Appellate Division
    • December 31, 1986
    ...Matter of Brown-Forman Distillers Corp. v. State Liq. Auth., 64 N.Y.2d 479, 485, 490 N.Y.S.2d 128, 479 N.E.2d 764; Montgomery v. Daniels, 38 N.Y.2d 41, 54-56, 378 N.Y.S.2d 1, 340 N.E.2d 444). We find no constitutional infirmity with the particular provisions of the NCAC challenged herein. S......
  • Hope v. Perales
    • United States
    • United States State Supreme Court (New York)
    • April 15, 1991
    ...and reasonable connection' between it and the promotion of the health, comfort, safety and welfare of society" ' " (Montgomery v. Daniels, 38 N.Y.2d 41, 54, 378 N.Y.S.2d 1, 340 N.E.2d 444 [1975]. A "regulation which is reasonable in relation to its subject and is adopted in the interest of ......
  • Brown-Forman Distillers Corp. v. State Liquor Authority, BROWN-FORMAN
    • United States
    • New York Court of Appeals
    • April 2, 1985
    ...Const., art. I, § 8). Preliminarily, we note that legislative enactments are presumptively constitutional (see, Montgomery v. Daniels, 38 N.Y.2d 41, 54-56, 378 N.Y.S.2d 1, 340 N.E.2d 444; Matter of Malpica-Orsini, 36 N.Y.2d 568, 570, 370 N.Y.S.2d 511, 331 N.E.2d 486, appeal dismissed sub no......
  • Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State
    • United States
    • New York Court of Appeals
    • January 18, 1990
    ...(see, Loretto v. Teleprompter Manhattan CATV Corp., 58 N.Y.2d 143, 152-153, 459 N.Y.S.2d 743, 446 N.E.2d 428; Montgomery v. Daniels, 38 N.Y.2d 41, 57, 378 N.Y.S.2d 1, 340 N.E.2d 444; People ex rel. Swift v. Luce, 204 N.Y. 478, 488, 97 N.E. 850; Matter of Stilwell, 139 N.Y. 337, 342, 34 N.E.......
  • Request a trial to view additional results

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