State, Dept. of Law and Public Safety, Div. of Motor Vehicles v. Bigham

• Decision Date: 28 June 1990
• Parties: STATE of New Jersey, DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION OF MOTOR VEHICLES, Appellant, v. Cynthia K. BIGHAM, Respondent.
• Court: New Jersey Supreme Court

Page 646

119 N.J. 646

575 A.2d 868

STATE of New Jersey, DEPARTMENT OF LAW AND PUBLIC SAFETY DIVISION OF MOTOR VEHICLES, Appellant, v. Cynthia K. BIGHAM, Respondent.

Supreme Court of New Jersey.

Argued Jan. 2, 1990.

Decided June 28, 1990.

Todd A. Wigder, Deputy Atty. Gen., for appellant (Peter N. Perretti, Jr., Atty. Gen., attorney; Michael R. Clancy, Asst. Atty. Gen., of counsel).

William J. Bigham, for respondent (Hannoch Weisman, Trenton, attorneys).

The opinion of the Court was delivered by

HANDLER, J.

Respondent, Cynthia Bigham, was involved in an automobile accident. Not being at fault, she was charged only for driving with an expired license, to which she pled guilty and paid a small fine. Because of that conviction, she was also required to pay an automobile insurance surcharge of $100 per year for three years. The surcharge was imposed by the Division of Motor Vehicles under a regulation adopted by the Commissioner of Insurance pursuant to the Merit Rating Plan of the New Jersey Insurance Reform Act of 1982. The issue presented by this appeal is whether such a surcharge on persons convicted for driving without a valid license exceeds the authority of the statute and is therefore invalid.

I.

On July 8, 1985, respondent, who had an unblemished driving record, was involved in an automobile accident. When the police arrived, she produced a driver's license that had expired six months previously. As a result she was charged under N.J.S.A. 39:3-10 with driving with an expired license. Respondent claimed that she had not received a renewal notice from the Division of Motor Vehicles ("DMV") and was unaware that her license had expired. Nonetheless, on July 22, 1985, she pled guilty to the charge and was fined ten dollars. The Municipal Court notified the DMV of that conviction. Thereafter, pursuant to N.J.A.C. 13:19-13, the DMV mailed an insurance surcharge bill to respondent charging her $100 per year for three years.

Bigham requested a hearing, and, after an unsuccessful settlement conference, the matter was transferred to the Office of Administrative Law. The Administrative Law Judge considered the matter on the record without testimony, and concluded that the surcharge was invalid. He believed that the purpose of the New Jersey Insurance Reform Act was to "set up a merit rating plan and an accident surcharge system in order to penalize poor drivers and to ensure that automobile insurance will be more equitable to the motorists of New Jersey," and that unknowingly driving with an expired license was not sufficiently serious to justify such a surcharge. The Director of the DMV ("Director") rejected that decision, construing the surcharge scheme as nonpenal in nature and automatic on conviction of covered violations. The Director confirmed the surcharge and suspended respondent's driving privileges indefinitely until it was paid.

The Appellate Division reversed the Director, determining that N.J.A.C. 13:19-13.1 exceeded the authority of the Act and that Bigham's conviction under N.J.S.A. 39:3-10 could not trigger a surcharge. The court reasoned that the non-point offense of driving with an expired license, as opposed to driving without ever having been licensed, did not sufficiently implicate safety concerns and was therefore not the kind of offense contemplated by the Legislature in establishing the Merit Rating Plan under the Act. Accordingly, it ruled that the regulation was invalid as applied to a safe driver such as respondent.

This Court granted the DMV's petition for certification, 114 N.J. 512, 555 A.2d 627 (1989), to consider whether the regulation adopted by the agency providing for an insurance surcharge for the offense of driving without a license is authorized by the Act and whether its application in this case to a driver charged only with driving with an expired license and not otherwise guilty of additional offenses entailing unsafe driving is valid.

II.

The Insurance Reform Act of 1982, N.J.S.A. 17:29A-33 to -47 ("Act"), was in effect at the time this dispute arose. ¹ That 1982 legislation altered the mode of complying with the statutory compulsory-insurance mandate by replacing the then-existing Assigned Risk Plan with the Full Insurance Underwriting Association ("JUA"). The primary objective of the JUA was to extend automobile insurance to those drivers unable to obtain it in the voluntary market. The legislative scheme also sought to reduce insurance inequities by replacing premium surcharges previously assessed by private insurance companies with the New Jersey Merit Rating Plan. Under the Merit Rating Plan, the DMV levied fees on all drivers who accumulate six or more points for motor vehicle offenses under Title 30 or are convicted of drunk driving under N.J.S.A. 39:4-50 or a similar offense in another jurisdiction. N.J.S.A. 17:29A-35b(1), (2). The Act was amended in 1984, however, to authorize the Commissioner of Insurance ("Commissioner") to impose surcharges for motor-vehicle violations for which points do not attach. L.1984, c. 1, § 2; N.J.S.A. 17:29A-35b(3)(b). Pursuant to that amendment, the Commissioner, in consultation with the Director of the DMV, promulgated N.J.A.C. 13:19-13.1, specifically imposing surcharges on persons convicted under N.J.S.A. 39:3-10, driving a motor vehicle on the public highways without a valid license, a non-point violation. The regulation provides for assessment of that surcharge annually for a three-year period. N.J.A.C. 13:19-13.2.

In determining whether the Commissioner exceeded the statutory grant of authority, we are remitted first to the language of the statute. As we said recently in State v. Churchdale Leasing, 115 N.J. 83, 101, 557 A.2d 277 (1989), "[w]hen a statute is clear on its face, a court need not look beyond the statutory terms to determine the legislative intent." See State v. Butler, 89 N.J. 220, 226, 445 A.2d 399 (1982). If the language is plain and clearly reveals the meaning of the statute, the court's sole function is to enforce the statute in accordance with those terms. Sheeran v. Nationwide Mut. Ins. Co., 80 N.J. 548, 556, 404 A.2d 625 (1979).

The DMV contends that the language of the Reform Act of 1982, as amended in 1984, is plain and unambiguous, and clearly reveals legislative meaning and purpose. The express language of N.J.S.A. 17:29A-35b(3) states that such an insurance surcharge can be imposed "for motor vehicle violations or conviction for which motor vehicle points are not assessed under Title 39." That statutory language, the State maintains, indicates that motor-vehicle violations that do not carry point assessments, and do not implicate safety as such, can be the basis for a surcharge as determined by the Commissioner after consultation with the Director. N.J.S.A. 17:29A-35b(3). Because of the broad and unqualified description of the motor-vehicle violations encompassed within the Merit Rating Plan, the DMV contends that the Legislature granted the Commissioner the authority to impose surcharges for non-point offenses that may not involve safety.

The Appellate Division acknowledged that the statutory language does not describe predicate violations in terms of whether they involve or implicate driving safety. It nevertheless reasoned that an interpretation that fails to recognize such a qualification is contrary to the legislative intent and purpose. The Appellate Division reasoned that other surchargable offenses expressly identified in the Merit Rating Plan could be said to implicate safety. Such offenses are appropriately the basis for insurance surcharges because they directly engender insurance claims and thus relate to the generation of higher operating costs for the JUA. Assuming then that failure to renew a driver's license is unrelated to safety, and is thus a non-cost-related offense, the Appellate Division determined that such an offense would not fall within the class of violations of the enabling provision, N.J.S.A. 17:29A-35b(3). We are not persuaded, however, that the legislative intent underlying the statute is one that focuses inexorably and exclusively on offenses directly implicating traffic safety, and hence we find no basis for concluding that the statute impliedly limits surchargable violations only to those involving traffic safety.

A review of the legislative history of the Act is instructive in determining legislative intent. State v. Wright, 107 N.J. 488, 496-97, 527 A.2d 379 (1987); State v. Madden, 61 N.J. 377, 389, 294 A.2d 609 (1972). An appreciation of the defects in the previous system that the Act sought to remedy contributes to an understanding of the objectives of the Legislature and of the policies underlying passage of the Act. See DeFazio v. Haven Sav. & Loan Ass'n, 22 N.J. 511, 518-19, 126 A.2d 639 (1956). Under the former Assigned Risk Plan, which was often the only available insurance for statistically-categorized "high risk" drivers, these residual market insureds were often charged abnormally high rates. The Chairman of the Ad Hoc Committee on Automobile Insurance prefaced a report issued in 1979 by identifying the inequities of the current system: "under the present system of auto insurance there are male drivers living in New Jersey who pay $1,795.00, while their twin sisters living in another part of the state, with the same insurance coverage, and the same good driving record, pay $245.00. This is not fair." See Ad Hoc Committee Report on Automobile Insurance Reform in the State of New Jersey, Chairman's Report, 23-25 (January 3, 1979) (hereinafter "Chairman's Report"). In addition to premiums pegged at high rates, incremental insurance costs in the form of surcharges were imposed by private insurers on drivers in both the voluntary and residual market. Those surcharges were levied for violations of the motor-vehicle laws on New Jersey insureds in a seemingly ad hoc manner, with the amount often based on company-set percentages of base...