Wilson v. Unsatisfied Claim and Judgment Fund Bd.

• Decision Date: 03 September 1985
• Parties: Gaynelle WILSON, individually and as Guardian ad Litem for Frederick Wilson, a minor, Plaintiff, v. UNSATISFIED CLAIM AND JUDGMENT FUND BOARD, Defendant.
• Court: New Jersey Superior Court

Page 594

213 N.J.Super. 594

517 A.2d 1236

Gaynelle WILSON, individually and as Guardian ad Litem for Frederick Wilson, a minor, Plaintiff, v. UNSATISFIED CLAIM AND JUDGMENT FUND BOARD, Defendant.

Superior Court of New Jersey, Law Division Burlington County.

Decided Sept. 3, 1985.

Michael J. Waldman for plaintiff (Ferrara and Waldman, P.A., attorneys).

John P. Montemurro for defendant (Tomlin, Clark and Hopkin, attorneys).

HAINES, A.J.S.C.

The question before the court is whether a passenger in an uninsured automobile, struck by an insured vehicle, may recover medical expenses from the Unsatisfied Claim and Judgment Fund (UCJ) without first obtaining and exhausting efforts to collect the expenses from the insured driver or owner. The only reported decision of this issue, Pearman v. Unsatisfied Claim and Judgment Fund Bd., 185 N.J.Super. 397, 448 A.2d 1043 (Law Div.1982), required exhaustion. This opinion reaches the opposite conclusion.

Frederick Wilson, age 5, was a passenger in his uncle's uninsured automobile when it was struck in the rear by an insured school bus owned by the Moorestown Township Board of Education. Frederick was injured. He incurred medical expenses which would have been payable under the personal injury protection (PIP or PIPC) provisions of his uncle's policy of insurance, had his uncle been insured. Since he was not they are payable by the UCJ, absent some disqualification or exclusion.

Relying on Pearman, The UCJ moves for summary judgment on the ground that Frederick has no claim against the Fund because he can recover his losses from an insured defendant, the Moorestown Board of Education. Frederick cross moves for summary judgment on the ground that Pearman is wrong. There are no factual disputes and this opinion disposes of the litigation.

A. The Statutes

We are concerned here with the two statutes: The Unsatisfied Claim and Judgment Fund Law, N.J.S.A. 39:6-61, et seq, adopted in 1952, and The New Jersey Automobile Reparation Reform Act, N.J.S.A. 39:6A-1, et seq, known as the "No Fault Law", effective June 20, 1972. The compulsory insurance, PIP coverage benefits and tort exemption provisions of the No Fault Law became mandatory on January 1, 1973. The Unsatisfied Claim and Judgment Fund statute was amended by L.1972, c. 198 to match the mandatory insurance provisions of the No Fault Law, making both effective on January 1, 1973. That is the date on which N.J.S.A. 39:6-86.1 and N.J.S.A. 39:6A-4, of special interest here, became effective. The provisions of their initial paragraphs reveal their close connection:

N.J.S.A.39:6A-4

* * *

Personal injury protection coverage regardless of fault. Every automobile liability insurance policy insuring against loss resulting from liability imposed by law for bodily injury, death and property damage sustained by any person arising out of ownership, operation, maintenance or use of an automobile shall provide additional coverage, as defined herein below, under provisions approved by the Commissioner of Insurance, for the payment of benefits without regard to negligence, liability or fault of any kind, to the named insured and members of his family residing in his household who sustained bodily injury as a result of an automobile accident, to other persons sustaining bodily injury while occupying the automobile of the named insured or while using such automobile with the permission of the named insured and to pedestrians, sustaining bodily injury caused by the named insured's automobile or struck by an object propelled by or from such automobile. "Additional coverage" means and includes:

N.J.S.A.39:6-86.1

* * *

When any person qualified to receive payments under the provisions of the "Unsatisfied Claim and Judgment Fund Law," suffers bodily injury or death arising out of the ownership, operation or use of an automobile, as defined in P.L.1972, c. 70, registered or principally garaged in this State for which personal injury protection benefits under the "New Jersey Automobile Reparation Reform Act" would be payable to such person if personal injury protection coverage were in force and the damages resulting from such automobile accident or deaths are not satisfied due to the personal injury protection coverage not being in effect with respect to such automobile accident, then in such event the Unsatisfied Claim and Judgment Fund shall provide, under the following conditions, the following benefits:

There follows, in both sections, a list and description of identical benefits: medical expenses, income continuation, essential services, death benefits and funeral expenses. Both statutes were amended by L.1983, c. 362 to add identical language which provides coverage "while occupying, entering into, alighting from, or using an automobile," further proving the symbiotic relationship of the two statutes.

Except for the Pearman rationale, it would be clear from these statutory provisions that the Legislature intended the UCJ to pay PIP benefits whenever they would have been payable except for the fact that PIP coverage was not in force. History, logic and language support the conclusion that this was the legislative intent.

B. The Report of the Automobile Insurance Study Commission.

The Commission's report, entitled Reparation Reform for New Jersey Motorists (1971), was the basis of our No Fault Law. This is clear from the Statement attached to Assembly bill # 667 (the No Fault Law) that: "This legislation encompasses the recommendations of the Automobile Insurance Study Commission...." The release from the office of the Governor after the bill was signed is to the same effect. This is history, a long accepted aid to statutory construction. State v. Madden, 61 N.J. 377, 294 A.2d 609 (1972).

The report recommended the adoption of insurance legislation creating PIP coverages, compulsory insurance, limited tort exemptions and numerous other changes in our insurance laws, including the no fault concept, all of which were enacted. Its recommendations for changes in the Unsatisfied Claim and Judgment Fund law were also enacted. It was clearly the intention of the Commission that the UCJ pay PIP benefits to persons in Frederick's position without first requiring the pursuit of an insured, potentially liable party to an automobile accident. This is illustrated by the following excerpts from the report:

(1) "... all automobile accident injury victims should receive ... first party benefits" consisting of medical expenses, funeral expenses, disability benefits and extra expense reimbursement.

....

"... PIPC benefits shall be payable without regard to collateral sources of benefits which may be available to the injured person. That is, they shall be primary." (at 58-60)

(2) "That to the extent the PIPC benefits paid or payable, an insurer shall be subrogated to the injured person's right of action for damages against culpable third parties and their liability insurers. Determination as to whether any insurer is legally entitled to recover damages in tort from another insurer shall be by inter-company agreement or arbitration.

"That injured persons shall not plead nor introduce into evidence in an action for damages against a tortfeasor those damages for which PIPC benefits are paid or payable." (at 60)

....

"The purpose of the second proviso is ... to reduce costs by eliminating dual recoveries under both first-and third-party settlements through the subrogation device." (at 61)

(3) "No-fault benefits are first-party benefits; that is, they are provided to the motorist and his family by the motorist's own insurance policy."

.... The "only hope of recovery (for the uninsured) ... would be through an action in tort ... (which) would not only defeat the reparation objective; it would also impair the cost and judicial objectives. This is so because the Commission's proposal relies heavily on the prompt provision of no-fault benefits to moderate the pace of tort activity." (at 63-64)

(4) "It is the Commission's hope that its recommended personal injury protection coverage (PIPC), which is a mandatory, first-party, no-fault benefit system, will absorb many claims which otherwise would flow into the higher-cost tort benefit system." (at 90)

(5) "The Commission's reparation reform proposal for New Jersey motorists supplements the present tort liability system with a package of first-party benefits. This package carries all injury victims, without regard to fault, a fair and reasonable distance toward their reparation objectives. (at 99)

(6) "The Commission's reform proposal should lighten the modern day version of this same burden appreciably by the prompt and fair reparation of medical-disability loss for all victims without regard to fault. That is, in many if not most cases, it will render civil actions for special damages unnecessary, except as under subrogation such actions may be warranted." (at 101)

(7) "The Commission recommends a change in the admissibility of evidence rule to provide that injured persons shall not plead or introduce into evidence in an action for damages against a tortfeasor those damages for which PIPC benefits are available. This rule will effectively prevent duplicate recovery in cases tried in the courts, in congruence with the recommended subrogation procedure in cases settled outside the courts. Further, the prohibition on presenting to the courts evidence as to amounts of indemnity already obtained under PIPC benefits will have the effect of leveling the size of verdicts or settlements." (at 103)

(8) "... the injured person may not effect a double recovery under both no-fault and tort."

(at 117)

(9) Recommendation: "Modification of the Unsatisfied Claim and Judgment Fund to provide no-fault benefits." (at 156)

It is clear from the summary of the Commission's recommendations that these benefits were to include PIP coverage. Recommendations 6 & 7 called for modification of the UCJ law "(t)o...