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Muschette v. Gateway Insurance Co.

Decided: June 5, 1978.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 149 N.J. Super. 89 (1977).

For affirmance -- Chief Justice Hughes, Justices Sullivan, Clifford, Schreiber and Handler and Judge Conford. For modification -- Justice Pashman. Schreiber, J., concurring. Justice Clifford joins in this opinion. Pashman, J., concurring and dissenting. Clifford and Schreiber, JJ., concurring in the result.

Per Curiam

The Appellate Division affirmed a judgment of the Superior Court, Law Division, awarding plaintiff certain "survivor benefits" pursuant to section N.J.S.A. 39:6A-10 of the Automobile Reparation Reform ("no fault") Act, N.J.S.A. 39:6A-1 et seq., together with 10% interest, but without counsel fee. We granted certification on defendant's petition challenging the substantive determination of the Appellate Division and the allowance of 10% interest on the judgment, 75 N.J. 27 (1977), but we denied plaintiff's cross-petition complaining of the disallowance of counsel fee.

We affirm essentially on the opinion of the Appellate Division, but subject to the added comments which follow. See also General Accident Group v. Shimp, 147 N.J. Super. 404, 411 (Law Div. 1977).

Defendant has never flatly contended that the purchase by plaintiff of Option 5 of the Commissioner's regulation concerning "additional personal injury protection" did not entitle plaintiff, as survivor of the decedent wife (also an additional named assured), to a potential recovery of the maximum benefits provided for under the Option 5 table both for income continuation benefits and essential service benefits. Its only argument in that regard has been that the plaintiff must "prove" his "actual" income continuation and essential service losses beyond the date of the death of the income producer (or essential service provider), and in excess of the basic maximums for those benefits of $5200 and $4380, respectively, up to the potential respective [76 NJ Page 563] maximums under Option 5 of $36,400 and $10,220.*fn1 However, as pertinently pointed out by the Appellate Division, "in case of death it is difficult or impossible to predict the amount of income and services which are lost to the surviving spouse or children or decedent's estate." 149 N.J. Super. at 94. Defendant fails to provide an explanation or illustration

of how, under its rationale of Section 10, a survivor would ever be able to "prove" his loss in respect of either income continuation or essential services, even where the decedent was at the time of death an income producer or a provider of essential services or both.

In effect, therefore, defendant's argument entails the consequence that the "suitable additional first-party coverage for * * * survivor benefits * * *" (emphasis added) required under Section 10 to be made available by insurers to policyholders is illusory, as surviving insureds would never be entitled to recover more than the basic benefits provided for in N.J.S.A. 39:6A-4. We agree with the Appellate Division that this cannot have been the legislative intent, fairly reading Sections 4 and 10 together.

Next we consider defendant's contention, raised for the first time at the oral argument before this Court, that if plaintiff is to be awarded maximum scheduled survivor benefits of $36,400 and $10,220 under Option 5, he should not also be allowed the $10,000 death benefit also provided for under the Commissioner's regulation (where death occurs within 90 days from the date of accident). The argument is that under the Appellate Division interpretation of Section 10 the additional survivor benefits for income continuation and essential services losses become, in effect, a death benefit or a form of life insurance. Since the $10,000 death benefit was intended to provide that kind of benefit, it becomes an unwarranted duplicate of the kind of benefit the Appellate Division has adjudicated in relation to Section 10.

We cannot accept the contention. The provision for the $10,000 death benefit in the Commissioner's regulation is absolute and unconditional. Moreover, it was included in the insurance policy purchased by the insureds. They received a certificate of insurance expressly alluding to inclusion of Option 5 benefits which concededly included the death benefit. In addition, as noted, the death benefit is payable only if, as here, decedent died within 90 days of the accident. It is

thus not true that the death benefit is the same kind of benefit as the additional survivor benefits for income continuation and essential services loss.

We note, finally, that defendant has not argued that insureds are not entitled to survivor benefits in a lump sum but only in weekly installments. This may be because by the time judgment was entered in the trial court the two year period for payment of additional survivor benefits under Option 5 had elapsed. It is clear that income continuation and essential services benefits are payable weekly while the injured person is alive. N.J.S.A. 39:6A-4 b. and c. The point not having been argued, and the question being debatable, we need not and do not decide whether survivor benefits, either basic (Section 4d.) or additional (Section 10) are to be paid weekly or in a lump sum.

Judgment affirmed.

SCHREIBER, J., concurring. Rose Lee Muschette was killed in an automobile accident on July 12, 1973. At that time she and her husband Milton J. Muschette were insured by the defendant The Gateway Insurance Co. under its automobile policy for bodily injury and property damage liability. The policy also provided uninsured motorist coverage, personal injury protection, and additional personal injury protection. Plaintiff Milton J. Muschette, individually and as administrator of his wife's estate, brought this action to recover the additional personal injury protection benefits afforded by the policy. The trial judge awarded the plaintiff as additional personal injury benefits the maximum statutory amounts for income loss and loss of essential services under N.J.S.A. 39:6A-4 and -10, and a $10,000 death benefit. The Appellate Division affirmed. 149 N.J. Super. 89 (1977).

The defendant did not issue an insurance policy in its usual form. Instead it delivered to the insured, with an identification card reflecting that there was insurance coverage for the plaintiff's 1964 Chevrolet, an indorsement sheet which stated in part that insurance was afforded with respect

to those coverages indicated by a specific premium charge. Under coverages there was listed "Additional PIP (opt. #5)" and alongside that notation a reference to the premium charge of $9.00. "PIP" refers to personal injury protection coverage which is required irrespective of fault by N.J.S.A. 39:6A-4 and -10.

The main issues are what additional personal injury protection benefits were purchased by the insured and to what he is entitled. To ascertain the coverage afforded by the policy it is necessary to examine the underlying statute. The pertinent sections read as follows:

Every automobile liability insurance policy insuring an automobile as defined in this act 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 accident involving an automobile, 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:

a. Medical expense benefits. Payment of all reasonable medical expenses incurred as a result of personal injury sustained in an automobile accident. In the event of death, payment shall be made to the estate of the decedent.

b. Income continuation benefits. The payment of the loss of income of an income producer as a result of bodily injury disability, subject to a maximum weekly payment of $100.00, per week. Such sums shall be payable during the life of the injured person and shall be subject to an amount or limit of $5,200.00, on account of injury to any one person, in any one accident.

c. Essential services benefits. Payment of essential services benefits to an injured person shall be made in reimbursement of necessary and reasonable expenses incurred for such substitute essential services ...

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