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Holmberg v. Aten

Decided: June 2, 1961.

CATHERINE HOLMBERG, PLAINTIFF-APPELLANT,
v.
JOHN ATEN, DEFENDANT-RESPONDENT



Conford, Freund and Kilkenny. The opinion of the court was delivered by Freund, J.A.D.

Freund

Plaintiff Catherine Holmberg appeals from a final order of the Law Division, Passaic County, denying her application for payment from the Unsatisfied Claim and Judgment Fund on the ground that mandatory deductions for insurance benefits received had exceeded the amount of her negligence judgment. The main issues herein are whether these benefits were properly deductible under the operative statutes, N.J.S.A. 39:6-70(m), 39:6-71, and 39:6-73, as those sections stood prior to their amendment in 1958 (L. 1958, c. 98, 99), and if so, whether such a construction impairs the constitutionality of the legislation.

The facts have been stipulated for the purpose of this appeal. Plaintiff was injured on September 29, 1955, while a passenger in an automobile owned and driven by her son, Richard T. Holmberg. The Holmberg vehicle was struck by an uninsured automobile driven by defendant Aten.

Plaintiff suffered severe and permanent disabling injuries and was forced to undergo treatment over a considerable period of time. Expenditures totaling more than $5,700 were made for medical treatment, hospitalization, and private nursing services.

A Superior Court action was instituted in separate counts by plaintiff and her husband, Carl O. Holmberg, suing per quod , against Aten. At trial, after defendant had been sworn and examined, all parties concerned consented to a judgment in plaintiff's favor in the sum of $5,000 for her permanent injuries and disability, and her pain and suffering. Also by consent, Carl O. Holmberg's count for consequential damages was dismissed with prejudice. Since Aten was satisfactorily shown to be judgment-proof, plaintiff made application to the Fund for payment of her $5,000 judgment. The Fund denied liability on the ground that plaintiff had received "other benefits" which, when credited against the judgment in accordance with the statutory directive of N.J.S.A. 39:6-71, exceeded that judgment in amount. The trial judge concurred with the view that the deductions were properly made and that, as they were in excess of the maximum statutory sum allowable from the Fund, the latter incurred no liability.

By express provision contained in the amendment thereto, L. 1958, c. 98, p. 553, ยง 3, the pertinent statutes must be considered as they read prior to the legislative alteration. They at that time carved out a broad category of possible payments to the injured claimant, receipt of which reduced the amount allowable from the Fund. N.J.S.A. 39:6-70(m) required the applicant for payment to state

"whether he has recovered a judgment in an action against any other person against whom he has a cause of action in respect of his damages for bodily injury or death or damage to property arising out of the accident and stating the amounts recovered upon such judgments or the amounts, if any, received for indemnity or other benefits for such injury or death or damage to property from any person other than the operator or owner of the motor vehicle causing such injury, death or damage." (Emphasis added)

N.J.S.A. 39:6-71, dealing with judicial orders to the Fund directing payment, provided:

"Any amount for compensation or indemnity for damages or other benefits which the plaintiff has received or can collect from any person other than the judgment debtor shall be deducted from the amount due upon the judgment for payment of which claim is made." (Emphasis added)

And N.J.S.A. 39:6-73(c)(3) ordained that the maximum payable from the Fund "shall be reduced by any amount received or recovered as specified in subparagraph (m) of * * * [ N.J.S.A. 39:6-70]."

These statutory provisions (including the parallel section to 39:6-73, namely 39:6-84, applicable to "hit and run" cases), were initially construed in Dixon v. Gassert , 26 N.J. 1 (1958), wherein it was held that amounts received under an accident and health policy and a Blue Cross hospitalization contract, both issued in the claimant's name, constituted "indemnity or other benefits" within the statutory intendment. The Supreme Court was not persuaded by the plaintiff's argument that payments made by virtue of insurance contracts were not "for [his] injury" within the meaning of the enactment. The court opined, supra , 26 N.J. , at p. 7, that "the words employed do not lend themselves to the limited construction urged," but rather, "manifest an intention to provide for the allowance of deductions of a more comprehensive nature." Also see Minardi v. Dupont , 49 N.J. Super. 139 (App. Div. 1958) (sums received under insurance policies for temporary disability, health and accident benefits, medical and surgical expenses, and hospital care held deductible); Fasano v. Gassert , 49 N.J. Super. 52 (Law Div. 1958) (temporary disability, hospitalization, and medical and surgical payments held deductible).

Plaintiff urges that the form of the policies herein distinguishes this case from those cited, in that the proceeds were not distributed ...


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