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Miller v. Ohio Casualty Group

Decided: September 15, 1980.


Gaynor, J.s.c.


This case presents a variation on the theme of what constitutes a "loss of income" to warrant payment of income continuation benefits under the personal injury protection coverage of an automobile insurance policy. It is our opinion that the issue presented in this case must be decided in favor of the plaintiffs-insured.

The matter has been submitted to the court on the basis of the following facts as set forth in the pleadings, affidavits and deposition of plaintiff, Ann E. Miller. In September, 1978, Mrs. Miller temporarily discontinued her employment at the Air Park Bowling Lanes to enter the hospital for surgical treatment. She received sick pay from her employer during this hospitalization and for several weeks thereafter. In November the payments from her employer ceased and she commenced receiving unemployment benefits of $41 per week. During the latter part of November an acquaintance contacted Mrs. Miller and inquired as to whether she was interested in a $200 per week clerical position with North Pole Insulation Company. She indicated interest and received clearance from her physician for resumption of employment. On December 5, 1978 the plaintiff was offered the position to commence immediately. However, she was unable to accept or pursue the employment because of injuries she sustained on the preceding day, December 4th, as a result of being involved in an automobile accident.

The unemployment benefits were received by Mrs. Miller through December 3, 1978, and thereafter she received disability payments in approximately the same weekly amount until April, 1979. At that time her former job at Air Park Bowling Lanes was no longer available and the position at North Pole Insulation Company had been filled. She resumed full-time employment

the following September with Channel Home Centers at a salary of approximately $135 per week.

The plaintiffs were insured under a policy issued by defendant which, pursuant to N.J.S.A. 39:6A-4(b), provided for income continuation benefits for loss of income as a result of bodily injury disability. Application for such benefits was made and denied by the defendant. The present action ensued.

Defendant contends that, although Mrs. Miller at the time of the accident was an income producer within the terms of the statute and the policy, she did not sustain any loss of income as a result of being injured. This position is predicated upon the fact that, prior to the accident, she was receiving unemployment benefits of approximately $41 per week and, after the accident, received the same amount as temporary disability payments. It argues that the anticipated employment by the North Pole Insulation Company cannot be considered, as an employer-employee relationship between the company and Mrs. Miller did not exist at the time of the accident.

Plaintiffs' contention is that the injuries suffered by Mrs. Miller in the accident prevented her from commencing employment with the North Pole Insulation Company resulting in a loss of income measured by what she would have earned from such employment. They assert that there was sufficient definiteness as to the proposed employer-employee status to warrant the measurement of her loss of income by this anticipated employment.

The income continuation benefits provided for in the policy issued to plaintiffs, as mandated by statute, are designed to compensate for the loss of income sustained as a result of an automobile accident. The measure of such income loss is "the difference between what one would have earned had injury not occurred and what one did earn." Greenberg v. Great American Insurance Co. , 158 N.J. Super. 223 (App.Div.1978), aff. 79 N.J. 399 (1979). Thus in Greenberg, supra , it was held that an employee whose income is derived solely from commissions is

entitled to benefits based upon what he would have earned except for the disabling accident, even though his actual earnings after the accident equaled or exceeded his pre-accident income. The court also suggested that this rule would permit recovery based upon anticipated increases in earnings which were not received because of an intervening accident, stating:

Application of this formula to a salaried worker would permit his recovery of a salary increase scheduled to commence one week after a disabling accident; had the accident not occurred, the worker would have earned the increased salary even though the salary was greater than that which he earned before the accident. He should be permitted to establish that fact. A regularly received annual increment should be recoverable even though the employee was not entitled to it before the accident. A salaried worker should be permitted to prove that he was scheduled to commence work on a second part-time job with which the accident interfered. In all of these hypothetical situations, the injured person, a salaried worker, would be permitted to show what he would have earned had he not been ...

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