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Clendaniel v. New Jersey Manufacturers Insurance Co.

Decided: June 18, 1984.

KURT CLENDANIEL, PLAINTIFF-RESPONDENT,
v.
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, DEFENDANT-APPELLANT



On appeal from the Superior Court, Appellate Division, whose opinion is reported at For affirmance in part; reversal in part and remandment -- Chief Justice Wilentz and Justices Schreiber, Handler, Pollock, O'Hern and Garibaldi. Opposed -- None. The opinion of the Court was delivered by Garibaldi, J. Schreiber, J., concurring. Schreiber, J., concurring in the result.

Garibaldi

[96 NJ Page 362] This appeal concerns the interpretation of N.J.S.A. 39:6A-10 (Section 10) of the New Jersey Automobile Reparation Reform Act (prior to its amendment in January 1982, by L. 1981, c. 533, ยง 1) (Act). Specifically, the issue here is whether N.J.S.A. 39:6A-10 required the insurer to make available to the named

insured additional personal injury protection (PIP) benefits for persons other than the named insured. We hold that the insurer was required to make available additional Section 10 PIP benefits not only to the named insured but also to resident relatives in the household of the named insured. This interpretation of N.J.S.A. 39:6A-10, prior to its 1981 Amendment, conforms with the present language of the statute.

I

While a passenger in a car taken without the owner's permission, Kurt Clendaniel (Kurt) was seriously injured in an automobile accident. At the time of the accident, he resided with his parents. Kurt's father, Donald Clendaniel, had an automobile insurance policy issued by New Jersey Manufacturers Insurance Company (NJM) through the New Jersey Assigned Risk Plan. The policy was placed with NJM by Camden A. Trimble for Mr. Clendaniel. The policy, by way of endorsement, provided additional Section 10 PIP benefits only to the named insured, Mr. Clendaniel, and to his wife. Kurt was not listed as an insured for additional Section 10 PIP benefits.

Under Mr. Clendaniel's policy, NJM paid Kurt basic PIP medical expenses pursuant to N.J.S.A. 39:6A-4, but disputed Kurt's claim for income continuation benefits due to Kurt's lack of employment. NJM also disputed Kurt's claim for additional Section 10 PIP benefits.

Thereafter, Kurt sued NJM seeking the income continuation benefits and the additional Section 10 PIP benefits. Kurt argued that he was entitled to the Section 10 benefits on one of two alternate grounds. First, he contended that he was insured based on the representation that Trimble allegedly made to Mr. Clendaniel that the entire household would be entitled to the Section 10 benefits. Alternatively, he contended that he was entitled to the benefits because NJM failed to fulfill its statutory duty to make additional PIP coverage for him available to his father, the named insured.

The trial court granted partial summary judgment in favor of NJM, dismissing Kurt's claim for additional Section 10 PIP benefits. The trial court held that Trimble was not an agent of NJM, thereby implying that any alleged representations by Trimble were irrelevant. The court then ruled that NJM had no duty pursuant to N.J.S.A. 39:6A-10 to make available additional PIP benefits for Kurt. Thus Kurt was not entitled to Section 10 benefits because the policy in question designated only the named insured, Donald Clendaniel, and his spouse, if resident of the same household, as persons insured for additional Section 10 PIP benefits.

The Appellate Division granted Kurt's motion to appeal, reversed the judgment of the trial court, and remanded the case for further proceedings. 184 N.J. Super. 331. The Appellate Division held that N.J.S.A. 39:6A-10 required an insurer to make available to the named insured as an option additional PIP benefits for all classes of persons covered under N.J.S.A. 39:6A-4, including resident relatives, guest passengers, and pedestrians.

We granted NJM's motion for leave to appeal the interlocutory order of the Appellate Division and summarily remanded the matter to the Appellate Division to reconsider in light of the 1981 amendment to Section 10. 91 N.J. 285. After its reconsideration, the Appellate Division again held that prior to the enactment of the amendment, N.J.S.A. 39:6A-10 required an insurer to make available additional PIP benefits for all classes of persons covered under N.J.S.A. 39:6A-4. 190 N.J. Super. 286. Accordingly, the Appellate Division reversed the trial court's judgment and remanded the case to the trial court.

We granted NJM leave to appeal. 95 N.J. 201.

II

N.J.S.A. 39:6A-10 mandates that insurers must provide named insureds with the option of purchasing additional PIP benefits above those required of all motorists under N.J.S.A.

39:6A-4. The statement accompanying the original bill in the Legislature states, "The insured may purchase additional coverage if desired." See Statement accompanying A667 (1972). For cases stating this proposition, see Allstate Ins. Co. v. Skolny, 86 N.J. 112, 114 n. 1 (1981); Muschette v. The Gateway Ins. Co., 76 N.J. 560, 564 (1978); Garden State Fire & Casualty Co. v. Commercial Union Ins. Co., 176 N.J. Super. 301, 307 (App.Div.1980).

The issue here is whether the Legislature intended that the insurer must offer the named insured the option of obtaining additional Section 10 PIP benefits for persons other than the named insured and, if so, for whom the Legislature ...


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