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Wilson v. Unsatisfied Claim and Judgment Fund Board

Decided: January 26, 1988.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 213 N.J. Super. 520 (1986).

For affirmance -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Opposed -- None. The opinion of the Court was delivered by O'Hern, J.


[109 NJ Page 272] This case, like Sotomayor v. Vasquez, 109 N.J. 258 (1988), also decided today, primarily concerns the availability of PIP coverage for the passenger in an uninsured vehicle. In this case a passenger riding in a private automobile was injured in a collision between that car and a school bus owned and operated

by the Township of Moorestown. As we stated in Sotomayor, under the provisions of N.J.S.A. 39:6A-4 each private automobile is expected to provide coverage for its own passengers with respect to PIP expenses. Once again, however, we have an uninsured vehicle. The bus, not being required to maintain PIP insurance, has none, and in any event, a vehicle's PIP coverage does not extend to injured passengers in another vehicle. See Sotomayor v. Vasquez, supra, 109 N.J. at 265-66.

Hence, the passenger in the uninsured car seeks to recover from the Unsatisfied Claim and Judgment Fund (hereafter UCJF or the Fund) under N.J.S.A. 39:6-86.1. The Fund denies recovery on the theory that there is another source for payments in this case, i.e., the third-party liability of the owner and operator of the bus, the Township of Moorestown. We shall discuss in Part III, infra at 279-281, whether "PIP-type" damages are recoverable from such a tortfeasor. In fact, the plaintiff here has already settled his liability insurance claims against the uninsured driver of the car and against the Township.


The procedural posture of this case is that the five-year-old plaintiff was a passenger in his uncle's uninsured car when it was involved in an automobile accident on September 28, 1983, with a Township of Moorestown Board of Education school bus.*fn1 Plaintiff filed parallel claims against the Township and against the Unsatisfied Claim and Judgment Fund Board. Plaintiff settled his suit against the Township for $20,000. The record is silent, however, on whether that settlement was expressly made exclusive of damages for "PIP-type" benefits.

In the companion UCJF action, both parties moved for summary judgment. The issue presented to the trial court was "whether a passenger in an uninsured automobile, struck by an insured vehicle, may recover medical expenses from the [UCJF] without first obtaining and exhausting efforts to collect the expenses from the insured driver or owner." Wilson v. Unsatisfied Claim & Judgment Fund Bd., 213 N.J. Super. 594, 595 (1985), aff'd, 213 N.J. Super. 520 (1986), certif. granted, 107 N.J. 76 (1987).

Initially, the trial court analyzed the comparable provisions of the New Jersey Automobile Reparation Reform Act ("No-Fault" Law), N.J.S.A. 39:6A-4, and the Unsatisfied Claim and Judgment Fund Law (Fund Law), N.J.S.A. 39:6-86.1. We summarize its holding: it placed special emphasis on the report of the Automobile Insurance Study Commission entitled Reparation Reform for New Jersey Motorists (1971) [hereinafter Reparation Reform ], which was the basis of our 1972 "No-Fault" Law. The Commission specifically recommended the creation of PIP coverage, compulsory insurance, the limited tort exemptions, and various other changes in insurance laws, including the "no-fault" concept. Wilson, supra, 213 N.J. Super. at 598. At the same time, the Commission also recommended a change in the Fund Law to provide PIP benefits for occupants of uninsured vehicles. This provision was ultimately adopted in 1972.

The trial court also referred to certain "paramount policy goals" of the Commission: namely, (1) that all automobile accident victims should receive reimbursement for the "PIP-type" expenses without regard to collateral sources -- that is, PIP benefits shall be primary; (2) that subrogation should be limited to inter-company agreements and that the injured person should not be permitted to offer evidence that "PIP-type" damages were paid or payable. Wilson, supra, 213 N.J. Super. at 598-99. The court also noted that the purpose of the latter proviso was to reduce costs by eliminating dual recoveries, i.e., recoveries under both first- and third-party settlements. Moreover,

it was the Commission's hope that personal injury protection coverage would "absorb many claims which would otherwise flow into the higher-cost tort benefit system," and thus would carry "all injury victims, without regard to fault, a fair and reasonable distance toward their reparation objectives." ...

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