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Gambino v. Royal Globe Insurance Companies

Decided: May 19, 1981.


On certification to the Superior Court, Law Division.

For reversal and remandment -- Chief Justice Wilentz and Justices Sullivan, Pashman, Clifford, Schreiber, Handler and Pollock. For affirmance -- None. The opinion of the Court was delivered by Handler, J.


[86 NJ Page 102] This case, together with Allstate Insurance Co. v. Skolny, 86 N.J. 112 (1981), decided today, presents difficult issues of statutory construction involving New Jersey's personal injury protection (PIP) statute. The problem of ascertaining legislative intent in each case requires an assessment of the meaning of statutory phraseology in the light of the principles and policies which undergird the PIP statute. In this case the interpretative issue is posed in terms of whether the plaintiff-claimant, Joseph Gambino, was an "income producer," within the meaning of the PIP statute, N.J.S.A. 39:6A-2(d) and 39:6A-4(b), at the time he was injured and disabled in an automobile accident.


The present case presents a rather straightforward factual setting. From September 1974 to May 1975, while acting as president of the Yellow Cab Company which he had owned for 16 years, Joseph Gambino attended college in order to acquire the educational qualifications needed to obtain an insurance broker's license. During the period of preparation for his new career, Gambino was in contact with the Raymond A. Marx Company, a seller of life insurance. It was contemplated that Gambino would join the company once he had passed his licensing exam and found a buyer for his small taxi business.

In June 1975 Gambino was licensed as an insurance broker and in late November 1975, he sold the Yellow Cab Company. It was arranged that he would commence his employment as a property-casualty broker with the Raymond A. Marx Company on January 15, 1976 at a salary of $500.00 semi-monthly. In the interim, Gambino continued as a consultant to the new owners of the taxi business until December 22 or 23, at which time he traveled to Florida for a vacation. He returned to New Jersey on January 5, 1976.

On January 13, 1976, two days before he was to start his new employment as an insurance broker, Gambino was seriously injured in an automobile accident and was unable to resume work for five months. Subsequently, he filed a claim with the defendant Royal Globe Insurance Companies (Royal Globe) for income continuation benefits, as provided for by his policy pursuant to N.J.S.A. 39:6A-4(b).*fn1 Royal Globe refused to pay income continuation benefits, claiming that the plaintiff was retired on January 13, and, therefore, ineligible to receive such recompense under the statute. Gambino then filed suit in the Superior Court, asserting entitlement to these PIP benefits.

The trial court granted summary judgment in favor of defendant on the ground that Gambino was not entitled to benefits under the terms of the statute, N.J.S.A. 39:6A-2(d), -4(b). An appeal was taken and this Court directly certified the case, pursuant to R. 2:12-2, while it was pending in the Appellate Division.


The statute under which plaintiff claims benefits provides for "income continuation benefits" for "the payment of the loss of income of an income producer as a result of bodily injury disability." N.J.S.A. 39:6A-4(b). An "income producer" in turn is defined as "a person, who at the time of the accident causing personal injury or death, was in an occupational status, earning or producing income." N.J.S.A. 39:6A-2(d).*fn2

Despite the assertions of defendant that the language of the statute is clear and unambiguous, the attempted literal application of the statute to the facts in this case suggests anomalous results, creating a need for statutory construction. Moreover, despite a surface clarity in the definition of the term "income producer," the statutory language is susceptible of more than a

single and simple interpretation.*fn3 The need for judicial interpretation when confronted with such a statute was well described by Chief Justice Vanderbilt in Watt v. Mayor and Council of Borough of Franklin, 21 N.J. 274 (1956):

As we move away from the ideal of a clear and unambiguous statute we find statutes that on their face are clear and unequivocal but in light of related legislation and of the surrounding facts and circumstances of the case in which it is applicable, the true meaning becomes indefinite or obscure. In these instances it may be the plain meaning of the words themselves that casts doubt as to the true intention of the Legislature, or often it is the absurdity of the result flowing from a literal application of that plain meaning that causes wonder as to the true purpose of the enactment. Then, too, there are those less difficult instances in which the meaning of a statute is obviously obscure or doubtful, where the language used is per se capable of dual interpretation. When these circumstances ...

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