Ross v. Transport of New Jersey
| Decision Date | 01 February 1989 |
| Citation | 553 A.2d 12,114 N.J. 132 |
| Parties | Linda ROSS, Plaintiff-Respondent, v. TRANSPORT OF NEW JERSEY, a corporation or business organization, Defendant- Appellant, and Michael Guido, Jr., Alcides Perez and Ronald Longson, Jr., Defendants. |
| Court | New Jersey Supreme Court |
Madeleine W. Mansier, Deputy Atty. Gen., for defendant-appellant (Cary Edwards, Atty. Gen., Atty.; James J. Ciancia, Asst. Atty. Gen., of counsel).
Kenneth E. Walker, II, for plaintiff-respondent (Freeman & Bass, Newark, attys.).
Alexander P. Waugh, Jr., for amici curiae New Jersey Mfrs. Ins. Co. and Nat. Ass'n of Independent Insurers (Smith, Stratton, Wise, Heher & Brennan, Princeton, attys.).
The opinion of the Court was delivered by
The broad issue presented by this appeal implicates any obligations of the defendant New Jersey Transit Bus Operations, Inc., 1 a public entity, to provide insurance for claims attributable to injuries from vehicular accidents involving the buses that it owns and operates. The issue is raised by the plaintiff, Linda Ross, who was a passenger on a Transit bus when it was struck by a stolen vehicle. Ross filed suit to recover personal injury damages against Ronald Longson, Jr., the driver of the stolen vehicle; Transit; Transit's bus driver, Michael Guido, Jr.; and the owner of the stolen car, Aleides Perez.
The matter was submitted to arbitration pursuant to N.J.S.A. 39:6A-25 to -35. The arbitrator found Longson to be the sole party at fault and awarded damages of $1,555 for medical bills and $4,000 for pain and suffering. Ross moved for an order to confirm the arbitration award and compel payment. In addition, she requested that Transit be compelled to pay these damages through uninsured motorist coverage because Longson was uninsured and the stolen car involved in the accident was not covered by the owner's insurance policy. She argued that Transit, like every operator of a motor vehicle, should carry this basic coverage for the benefit of passengers in the vehicle. The trial court entered judgment against Longson but denied the motion to compel Transit to pay. Ross then appealed this denial.
In a unanimous decision the Appellate Division reversed the trial court determination. Ross v. Transport of New Jersey, 218 N.J.Super. 326, 527 A.2d 910 (1987). Transit then filed a petition for certification, which was granted. 109 N.J. 46, 532 A.2d 1112 (1987).
The initial question is whether Transit, as a public entity, is subject to the provisions of the Motor Vehicle Security-Responsibility Law, N.J.S.A. 39:6-23 to -60 (hereafter "Responsibility Law"), which would obligate it to carry uninsured motor vehicle insurance coverage. Uninsured motor vehicle insurance covers the risk that a passenger in a vehicle may be injured through the negligence of the operator of another vehicle that is not insured. Transit argues that it is exempt from uninsured motorist coverage by virtue of N.J.S.A. 39:6-54. N.J.S.A. 39:6-54 specifies that the Responsibility Law "shall not apply with respect to any motor vehicle owned by ... this State or any political subdivision of this State...."
This question presents a matter of statutory construction. Its determination entails an examination of the State's comprehensive statutory system, which is designed to have "financially responsible persons available to meet the claims of persons wrongfully injured in automobile accidents." Selected Risks Ins. Co. v. Zullo, 48 N.J. 362, 371, 225 A.2d 570 (1966).
Central to this statutory scheme is N.J.S.A. 39:6B-1 to -3 ("Compulsory Insurance Law"). Under this Law, owners of motor vehicles registered or principally garaged in the state must maintain motor vehicle liability insurance coverage for at least the minimum amount statutorily established. The law provides penalties when this is not done. The New Jersey Automobile Reparation Reform Act ("No Fault Act"), N.J.S.A. 39:6A-1 to -20, further mandates that every liability policy insuring automobiles shall include "no fault" coverage, providing compensation without regard to fault for automobile accidents involving members of the insured's family and injuries to passengers or pedestrians resulting from accidents involving the insured's car. See Sotomayor v. Vasquez, 109 N.J. 258, 261, 536 A.2d 746 (1988); Zyck v. Hartford Ins. Group, 143 N.J.Super. 580, 364 A.2d 32 (Law Div.1976), aff'd 150 N.J.Super. 431, 375 A.2d 1232 (App.Div.1977), certif. den. 75 N.J. 521, 384 A.2d 501 (1977). The No Fault Act also requires that automobile policies maintain uninsured motorist ("UM") coverage as provided under N.J.S.A. 17:28-1.1. 2 See N.J.S.A. 39:6A-14. To satisfy the UM provision, no policy insuring motor vehicles of any type can be issued without providing minimal protection against damages due to accidents involving uninsured vehicles or "hit and run" vehicles. 3 Significantly, however, this Act does not apply to policies insuring buses, see Wagner v. Transamerica Ins. Co., 167 N.J.Super. 25, 31, 400 A.2d 497 (App.Div.), certif. den. 81 N.J. 60, 404 A.2d 1159 (1979).
The Responsibility Law, under which Transit claims to be exempt from insurance obligations, also mandates the form of insurance policies, N.J.S.A. 39:6-48. For those who do not have insurance or a certificate of self-insurance, this Law provides penalties such as the automatic suspension of license and registration (or of in-state driving privileges for foreign drivers). N.J.S.A. 39:6-25 to -27. It thus directly supports the Compulsory Insurance Law, and indirectly supports the compulsory UM requirements of the No Fault Act and Title 17. See also Williams v. Sills, 55 N.J. 178, 181, 260 A.2d 505 (1970) (). In addition, N.J.S.A. 48:4-46 to -48 regulates buses and taxicabs as public utilities, and requires that private operating vehicles carrying passengers for hire maintain established insurance protection or self-insurance, N.J.S.A. 48:4-47. This then triggers the requirement in Title 17, N.J.S.A. 17:28-1.1, that all auto insurance coverage include UM protection.
It is significant that there are a number of exemptions for public agencies in this comprehensive statutory scheme. As noted earlier, N.J.S.A. 39:6-54 exempts any government owned motor vehicle from the Responsibility Law. In addition, the New Jersey Public Transportation Act of 1979, N.J.S.A. 27:25-1 to -24, specifically exempts Transit, as a public bus company, from provisions of Title 48, including the requirement that bus companies maintain insurance or self-insurance. N.J.S.A. 27:25-8. See Transport of New Jersey v. Matos, 202 N.J.Super. 571, 576-77, 495 A.2d 503 (Law Div.1985). Nevertheless, the Compulsory Insurance Law does not specifically state that the exemption of N.J.S.A. 39:6-54 applies to it, even though this Law was enacted pursuant to a statute that was "supplementing Title 39 ...," L. 1972, c. 197. Casting additional doubt on the applicability of the exemption is the statutory authority for a public transit utility to insure itself or establish a self-insurance fund. N.J.S.A. 27:25-5(r). 5
The critical question then is whether the Responsibility Law's exemption, N.J.S.A. 39:6-54, is applicable to the Compulsory Insurance Law. If the exemption is inapplicable, then Transit is required both to insure and have UM coverage by virtue of Title 17. If, on the other hand, it is exempt, there will be no UM requirement because Title 17 requires UM coverage be provided only as an included provision of an existing insurance policy or as a constituent part of any obligation to provide self-insurance. As noted, the Appellate Division ruled that the exemption of N.J.S.A. 39:6-54 did not apply to Transit, exposing it to the statutory obligations of providing insurance, including uninsured motorist coverage. 218 N.J.Super. at 330, 527 A.2d 910. We disagree.
There is no dispute that the obligation to provide insurance, and the concomitant obligation to provide UM coverage, is not limited to insurance obtained through authorized insurance carriers. The statutory scheme encompassed by the compulsory insurance and UM laws "express[es] the legislative intent that all New Jersey motor vehicles, covered by commercial insurance or self-insured, must be insured against injury or damage caused by uninsured motorists." Transport of New Jersey v. Watler, 161 N.J.Super. 453, 457, 391 A.2d...
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