On appeal from the Superior Court of New Jersey, Law Division, Atlantic County.
Michels, Shebell and Gaynor. The opinion of the court was delivered by Michels, P.J.A.D.
Plaintiff Carol W. Fisher appeals from a summary judgment of the Law Division entered in favor of defendant New Jersey Automobile Full Insurance Underwriting Association, by and through its servicing carrier, Hanover Insurance Company in this action seeking personal injury protection (PIP) benefits under an automobile insurance policy issued to Thomas Lafferty.
The facts giving rise to this appeal are not in dispute. On or about April 8, 1985, Thomas Lafferty (Lafferty) went to the Apco Insurance Agency (Apco) in Williamstown, New Jersey to purchase automobile insurance through the New Jersey Automobile Full Insurance Underwriting Association (Association), an unincorporated, non-profit association created pursuant to N.J.S.A. 17:30E-1 et seq. "to provide automobile insurance
(through normal market outlets at standard market rates) for qualified applicants who cannot otherwise obtain insurance." N.J.S.A. 17:30E-2. Apco is a producer authorized to issue automobile insurance on behalf of the Association. In order to obtain coverage through the Association, Lafferty was required to fill out an application which Apco then sent to Hanover Insurance Company (Hanover), the participating carrier.
Under the space provided in the application for "Description of Vehicles", Lafferty indicated that the vehicle to be insured was a 1976 Ford Granada, bearing Vehicle Identification Number 6E81L114. Significantly, Lafferty also indicated that the vehicle was registered in New Jersey under license plate number "381SAN". In the "Applicant's Statement" located directly above the line where Lafferty signed his name, the following language is found:
I declare and certify that: (1) I have tried and failed to obtain automobile insurance in this state within the preceding 60 days at rates not exceeding those applicable under the Association. (2) To the best of my knowledge and belief that all statements contained in this application are true and that these statements are offered as an inducement to the Servicing Carrier on behalf of the Association to issue the policy for which I am applying. (3) I realize that any misleading information or failure to disclose required information will be considered lack of good faith on my part and may void the application or cause cancellation of my coverage.
After receiving this application, along with the required premium, Hanover determined Lafferty to be a "qualified applicant" under N.J.S.A. 17:30E-3m and issued policy number NJA-226097-40 on behalf of the Association pursuant to N.J.S.A. 17:30E-9.
On May 21, 1985, plaintiff was a passenger in the Lafferty vehicle, which was operated by Laurie M. Praul, when an intersection collision occurred with another automobile. Praul was issued three traffic summons, two of which were for driving an unregistered vehicle contrary to N.J.S.A. 39:3-4 and using fictitious license plates contrary to N.J.S.A. 39:3-33. As a result of the accident, plaintiff sustained injuries resulting in medical bills in excess of $20,000. Since plaintiff did not have
automobile insurance coverage in her household, she applied for personal injury protection (PIP) benefits under the Hanover policy issued to Lafferty on behalf of the Association. An investigation was conducted by Hanover claims representative Kenneth Moses. According to Moses' affidavit, and a Certified Abstract received from the Division of Motor Vehicles, no vehicle with license plate No. 381SAN was registered at that time or at the time of the accident. Moses was advised also by Lafferty "that he had never registered the 1976 Granada in New Jersey and that the license plates on the vehicle were registered to another vehicle owned by him two years previous." As a result, Hanover sent Lafferty a letter advising him that his policy was deemed void ab initio since he failed to register his vehicle as required by N.J.S.A. 17:30E-3m in order to be considered a qualified applicant under the plan. Hanover returned Lafferty's premium and denied plaintiff's claim for PIP benefits under its insurance policy.
Plaintiff thereupon instituted this action to recover all PIP-related expenses under the policy of insurance issued by Hanover as the servicing carrier for the Association. She claimed that as an injured third party, she should not be precluded from claiming PIP benefits under the New Jersey Automobile Reparation Reform Act, commonly referred to as the "No-Fault Law", N.J.S.A. 39:6A-1 et seq., simply because Lafferty -- the insured -- failed to meet the eligibility requirements set forth in N.J.S.A. 17:30E-3m. The trial court held that the "insurance policy was voided because the applicant [Lafferty] failed to register his vehicle, instead driving it with fictitious ...