Oswin v. Shaw

• Decision Date: 30 July 1992
• Parties: Annie M. OSWIN, Plaintiff-Appellant, v. Gregory P. SHAW, Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 290

129 N.J. 290

609 A.2d 415

Annie M. OSWIN, Plaintiff-Appellant, v. Gregory P. SHAW, Defendant-Respondent.

Supreme Court of New Jersey.

Argued March 2, 1992.

Decided July 30, 1992.

James J. Addonizio, Hazlet, for plaintiff-appellant (Rudnick, Addonizio & Pappa, attorneys; Thomas M. Comer, on the brief).

R. Peter Connell, Tinton Falls, for defendant-respondent (Donington, Karcher, Leroe, Salmond, Luongo, Ronan & Connell, attorneys; R. Peter Connell and Susan S. Rankin, on the brief).

Gerald H. Baker, Hoboken, for amicus curiae, ATLA-NJ (Baker, Garber, Duffy & Pedersen, attorneys).

The opinion of the Court was delivered by

CLIFFORD, J.

This appeal focuses on the procedure and the standard for determining compliance with the verbal threshold, N.J.S.A. 39:6A-8a, set forth in New Jersey's no-fault automobile-insurance statute, N.J.S.A. 39:6A-1 to -35. Plaintiff sustained soft-tissue injuries in an automobile accident. She sued defendant in the Law Division to recover noneconomic losses. The trial court entered summary judgment for defendant on the ground that the statute does not permit recovery of noneconomic losses due to soft- tissue injuries. The Appellate Division affirmed, 250 N.J.Super. 461, 595 A.2d 522 (1991), stating that although soft-tissue injuries may indeed be compensable under the statute, plaintiff's injuries did not meet the verbal-threshold standard. Significantly, that court also declared that the trial judge must determine all aspects of a plaintiff's compliance with the verbal threshold, including material disputes of fact.

We granted certification, 127 N.J. 552, 606 A.2d 365 (1991), and now hold that the correct procedure for verbal-threshold cases follows the summary-judgment model--that is, the court decides whether the injury alleged would, if proven, meet the requirements of one of the verbal-threshold categories, and the jury decides factual disputes about the nature and extent of the plaintiff's injuries. Because plaintiff's injuries do not fit within any of the verbal-threshold categories, we affirm the judgment of the Appellate Division.

I

To provide a context for this case, we begin with an overview of the statutory scheme. New Jersey adopted no-fault-insurance legislation with the goal of "compensating a larger class of citizens than the traditional tort-based system and doing so with greater efficiency and at a lower cost." Emmer v. Merin, 233 N.J.Super. 568, 572, 559 A.2d 845 (App.Div.) (citing Mario A. Iavicoli, No Fault & Comparative Negligence in New Jersey 20 (1973)), certif. denied, 118 N.J. 181, 570 A.2d 950 (1989). Under a pure no-fault system, a person injured in an automobile accident is compensated for those injuries without regard to fault. Inherent in an effective no-fault system is either a limitation on or the elimination of conventional tort-based personal-injury lawsuits. Jeffrey O'Connell & Robert H. Joost, Giving Motorists a Choice Between Fault and No-Fault Insurance, 72 Va.L.Rev. 61, 63-64 (1986). Many no-fault systems compensate injured persons for their economic losses--for example, medical expenses, lost income, essential services, and death benefits--under their own policies' personal-injury-protection coverage (hereinafter PIP). However, under those systems those who are injured may sue third parties for recovery of noneconomic loss stemming from certain types of injuries. New Jersey's statute follows that structure. See N.J.S.A. 39:6A-4, -8. Determining which injuries can give rise to such noneconomic-loss lawsuits is a problem that has plagued legislatures and courts in no-fault states.

The movement to adopt no-fault legislation in New Jersey was the result of ever-increasing automobile-insurance premiums. The New Jersey Automobile Reparation Reform Act, the state's original no-fault legislation, was enacted in 1972. Emmer, supra, 233 N.J.Super. at 572, 559 A.2d 845. That Act allowed lawsuits only when the insured had "sustained death, permanent disability, permanent significant disfigurement, permanent loss of any bodily function or loss of a body member in whole or in part," or "bodily injury [that is] confined solely to the soft tissue of the body" that resulted in medical expenses in excess of a $200 threshold. L.1972, c. 70, § 8. That statute defined such injuries as "injuries in the form of sprains, strains, contusions, lacerations, bruises, hematomas, cuts, abrasions, scrapes, scratches, and tears confined to the muscles, tendons, ligaments, cartilages, nerves, fibers, veins, arteries and skin of the human body."

Because that limitation did not slow the rise in insurance premiums, the Legislature passed the New Jersey Automobile Insurance Freedom of Choice and Cost Containment Act of 1984. To resolve the lawsuit dilemma, that act introduced tort options: the insured would now choose between two monetary thresholds for soft-tissue injuries, either $200 or $1,500. L.1983, c. 362, § 14. The cost of insurance continued to spiral, however, and New Jersey's insurance premiums became among the highest in the United States. Emmer, supra, 233 N.J.Super. at 573, 559 A.2d 845.

In 1988, after much disagreement about how to resolve the problem, the Legislature arrived at a compromise measure that gave automobile owners two thresholds from which to choose. One option allowed lawsuits for injuries that resulted in medical expenses in excess of $750, and the other provided for a verbal threshold (that is, one that is defined by words rather than dollar amounts). Senate Labor, Industry and Professions Committee Statement to S-2637 (June 16, 1988).

Then-Governor Kean conditionally vetoed that bill and issued a statement in which he expressed disapproval of any monetary threshold because of the incentive to pad medical bills. He advanced a different compromise, one that would give citizens the choice between a verbal threshold and a pure-fault liability system, i.e., no threshold. The statement included his vision of the practical effect of the verbal threshold:

The verbal threshold contained in this recommendation is patterned after that in force in New York State. (See New York Insurance Law §§ 5102, 5104[.] ) This verbal threshold specifically sets forth those injuries which will be considered "serious." Lawsuits for non-economic injuries, such as pain and suffering will be allowed for these enumerated "serious injuries" only. It is my intention that the term "serious injury," as defined in this recommendation, shall be construed in a manner that is consistent with the New York Court of Appeals' decision in Licari v. Elliot[t] [57 N.Y.2d 230, 455 N.Y.S.2d 570, 441 N.E.2d 1088] [ (1982) ]. Whether a plaintiff has sustained a "serious injury" must be decided by the court, and not the jury. Otherwise, the bill's essential purpose of closing the courthouse door to all lawsuits except those involving bona fide serious injuries will be diluted and the bill's effectiveness will be greatly diminished. In addition, strict construction of the verbal threshold is essential; any judicial relaxation of this plain language will impede the intent of maintaining the substantial benefits of no-fault at an affordable price.

[Governor's Reconsideration and Recommendation Statement 3-4 (Aug. 4, 1988) (citation omitted) [hereinafter Governor's Statement ].]

The final legislation, however, made no reference whatsoever to the adjudication of disputed factual issues.

The Governor signed the Act on September 8, 1988, and it took effect on January 1, 1989. Persons buying automobile insurance now choose between two types of coverage regarding the right to seek recovery of noneconomic losses resulting from automobile-related injuries. N.J.S.A. 39:6A-8. The first, the "verbal threshold," allows recovery for noneconomic losses resulting only from those personal injuries that fit into one of nine specified categories. N.J.S.A. 39:6A-8a. (Those nine categories are listed infra at 315, 609 A.2d at 427).

The alternative to the verbal-threshold option is the traditional tort option, which allows unrestricted recovery of noneconomic damages. N.J.S.A. 39:6A-8b. The insured who elects that option pays a higher premium in return for the unlimited right to sue. See N.J.S.A. 39:6A-8.1a. An insured who makes no election is deemed to have chosen the verbal threshold. N.J.S.A. 39:6A-8.1b.

II

-A-

This litigation originated with a collision on June 24, 1989, when the automobile driven by plaintiff, Annie Oswin, was struck in the rear by a vehicle operated by defendant, Gregory Shaw.

Plaintiff went to the emergency room at a local hospital on the day of the accident, and again two days later. X-rays of her spine, taken during her second visit, were negative. Complaining of headaches and neck pain, she began a course of treatment with Dr. Gregory Hila, a chiropractor. Between July 12, 1989, and December 4, 1989, she visited Dr. Hila thirty-two times for a program of "conservative chiropractic management." Dr. Hila's diagnosis was cervical myofascitis with discogenic radiculopathy and hyperflexion-hyperextension syndrome. She also saw Dr. Otto Lehman, an orthopedist, on September 18, 1989. Dr. Lehman took X-rays, which also were negative. Oswin missed a total of only four hours from work as a bank teller.

On August 4, 1989, Oswin filed a complaint against Shaw, claiming that as a result of the accident she had "sustained severe and permanent internal and external bodily injuries" resulting in present and future pain and suffering and in the expenditure of "substantial sums of money for medical care and treatment."

In the course of discovery plaintiff supported her claim with Dr. Hila's medical report, which recited Oswin's complaints; the tests he had used in determining her condition; and his findings. The report indicated that Dr. Hila had noted tenderness and spasm on palpation and slight weakness of the left hand. The report also listed and quantified Oswin's...