[170 NJSuper Page 440] This case involves the question of whether an insurer properly notified its insured of the availability of additional personal injury protection coverage pursuant to N.J.S.A. 39:6A-10, and if not, whether the remedy of reformation of the policy can be
invoked by the insured who has sustained a loss for which such additional coverage would have been available.
The procedural and factual background of this case was explicated by the Appellate Division in a decision reported at 163 N.J. Super. 7. This history is incorporated herein as if specifically set forth. The basic facts of the case are as follows: Esther Carriere and her husband was covered by a public automobile liability policy of insurance issued by plaintiff Lumbermens Mutual Casualty Co. in 1969. In early December 1972, pursuant to the provisions of the newly enacted New Jersey Automobile Reparation Reform Act (N.J.S.A. 39:6A-1 et seq.), Lumbermens notified the Carrieres, in writing, of the promulgation of the new law and the options available to them for additional personal injury protection (P.I.P.). Mr. & Mrs. Carriere read the letter and agreed on additional coverage. Upon notification as to the Carrieres' decision, on January 16 Lumbermens issued an additional P.I.P. endorsement with (among other things) a maximum loss of income benefit of $41,600 ($5,200 pursuant to N.J.S.A. 39:6A-4 and $36,400 pursuant to N.J.S.A. 39:6A-10). The endorsement provided coverage to "(1) the named insured and his spouse if a resident of the same household."
Mr. & Mrs. Carriere separated in January 1973. In March 1973 she was involved in an accident and sustained serious personal injuries in a vehicle listed as covered in the policy. She made a claim for income continuation benefits under the policy and Lumbermens denied liability on the basis that she was not a resident of the same household as the named insured, her husband, and did not, in any event, sustain any loss of income because she was not employed at the time of the accident. She subsequently instituted suit in New York (where she resides) and recovered a judgment of $10,551 against Lumbermens based on findings that she was entitled to coverage under the policy and was employed at the time of the accident, thereby sustaining an income loss. Lumbermens paid the judgment in full and
continued to pay Mrs. Carriere income continuation benefits until April 1975, at which point she had been paid the $41,600 maximum provided by the endorsement. Mrs. Carriere then filed another suit in New York, claiming that Lumbermens had failed to provide her the option of additional income continuation benefits for so long as her disability persisted, as required by N.J.S.A. 39:6A-10. Lumbermens then filed a declaratory judgment action in New Jersey which the trial judge dismissed by reasons of comity. It was that decision which was reversed by the Appellate Division.
Pursuant to the Appellate Division decision, Lumbermens then filed and served the amended complaint which is the subject of this action. The complaint sought the following declarations: that Lumbermens had met the requirements of N.J.S.A. 39:6A-10 by offering extended benefits to defendants Esther Carriere and her husband, the named insured, by letter of December 1972, and that even if the letter did not apprise Mrs. Carriere of the availability of extended benefits as required by statute, she was not entitled to reformation of the policy to provide the coverage in question because (a) she was not the named insured and (b) she was guilty of fraud and misrepresentation when she represented to the New York court that she was employed at the time of the accident and lost income by reason thereof.
Subsequently, Lumbermens moved for discovery of Mrs. Carriere with respect to the alleged fraud on the New York court. Mrs. Carriere then filed a motion for summary judgment declaring that Lumbermens failed to offer coverage in accordance with the statute; that accordingly she is entitled to reformation, and that the fraud and misrepresentation defenses are barred by the doctrines of collateral estoppel, res judicata and full faith and credit. This is a decision on the above motions.
The first issue is whether Lumbermens' notification of additional personal injury protection to Mrs. Carriere met the requirements of N.J.S.A. 39:6A-10, which provides:
Insurers shall make available to the named insured covered under section 4, suitable additional first-party coverage for income continuation benefits, essential services benefits, survivor benefits and funeral expenses benefits. Income continuation in excess of that provided for in section 4 must be provided as an option by insurers to persons for disabilities, as long as the disability persists, up to an income level of $35,000.00 per year, with the excess between $5,200.00 and the amount of coverage contracted for to be written on the basis of 75% of said difference. The Commissioner of Insurance is hereby authorized and empowered to establish, by rule or regulations, the amounts and terms of income continuation insurance to be provided pursuant to this section.
When interpreting a statutory mandate such as this the court must look to the intention of the Legislature in enacting it. State v. Madden , 61 N.J. 377 (1972). Such legislative intent should be gleaned from the language of the enactment itself, and the court should not, through surmise or external considerations, ignore or depart from the clear meaning of an unambiguous act. Bravand v. Neeld , 35 N.J. Super. 42 (App.Div.1955). Here the language of the statute is crystal clear. It indicates that the Legislature intended to place upon the insurer the obligation of making additional coverage to that provided in N.J.S.A. 39:6A-4 available to the named insured at his or her option, including income continuation benefits so long as the disability exists. This intention was expressed in the Automobile Insurance Study Commission's report to the Governor and the Legislature ("Reparation Reform for New Jersey Motorist," December 1971), which stated (at XVII) that the purpose of offering excess loss coverage under N.J.S.A. 39:6A-10 was to provide for "those motorists who desire a greater degree of first-party insurance protection, and are willing to pay for the additional premium charge." See also, General Accident Group v. Shimp , 147 N.J. Super. 404 (Law Div.1977).
In furtherance of the statute the Commissioner of Insurance promulgated N.J.A.C. 11:3-7.3, which provides as follows:
11:3-7.3 Minimum schedule of additional personal injury protection
(a) Appendix A outlines the minimum schedule of "additional personal injury protection" coverage benefits that insurers must make available in accordance with Section 10 of the Act.
(b) In the Appendix A table, only five weekly indemnity schedules are shown, with a two-year benefit duration. It is believed that these ranges of benefits will meet the demand for this additional coverage in most cases.
(c) Consequently, at least for the initial period, it will be sufficient if your manuals exhibit these minimum benefit schedules with corresponding rates.
(d) However, benefits in excess of those set forth in Appendix A must be made available at the option of the named insured at reasonable intervals subject to the specific approval by the Commissioner, up to a maximum additional weekly loss of income benefit of $35,000. per year, as well as reasonable essential service benefits, ...