This case presents these questions:
Whether the person who applies for insurance with the New Jersey Full Insurance Underwriters Association (the association) must be the title owner of the vehicle for which coverage is requested. Whether the applicant's failure to state the name of the title owner and registered owner in the application is a material misrepresentation justifying a rescission of the policy.
On September 17, 1985, plaintiffs, who at the time were living together and engaged to be married, arranged for the purchase of an automobile for the purpose of providing an engagement gift to plaintiff, Marianne Dobrolowski. The down payment for the automobile was made by Mrs. Dobrolowski from a personal loan obtained by her in the sum of $2,000. The balance was paid from the proceeds of an automobile loan obtained by Mr. Dobrolowski. Plaintiffs contend that it was their intention to put the title of the automobile in the name of Mrs. Dobrolowski, but because she was unable to obtain financing, the automobile title and registration were placed in the name of Mr. Dobrolowski.
On August 14, 1985, prior to the delivery of the automobile, plaintiff Mrs. Dobrolowski applied, in her maiden name, for the insurance through the association and paid the full-year premium in the sum of $921. The application for insurance asked the question: "registered owner of vehicle, if not the applicant?" Mrs. Dobrolowski did not answer this question. Mrs. Dobrolowski thereafter took possession of the automobile and made
payments on both loans until April 15, 1986. On March 19, 1986, Mrs. Dobrolowski was injured as a result of an automobile accident, and applied to Continental for personal injury protection benefits. Defendant Continental was the servicing agent of plaintiff's policy with the association. On April 24, 1986, Continental advised Mrs. Dobrolowski that it was denying coverage to her because the owner and the insured were not the same person.
It is defendant Continental Insurance Company's contention that plaintiff was not a qualified applicant for insurance under the statute because she was not the title owner of the automobile. The statute, N.J.S.A. 17:30E-3(m), defines a qualified applicant as follows:
(m). "Qualified Applicant" means a person domiciled in New Jersey, who is an owner of an automobile registered and principally garaged in this State. . . . No person shall, however, be deemed a qualified applicant, if the principal operator of the automobile to be insured does not hold a driver's license which is valid in this State; or if a regular operator of an automobile other than the principal operator does not hold such a license; or if timely payment of the premium is not tendered; or if the principal operator of the automobile does not furnish the information necessary to effect insurance. . . . [Emphasis supplied]
The owner of the vehicle is usually the person who holds the title and in whose name the vehicle is registered, but this is not always the case.
Although the motor vehicle laws state that the owner of a vehicle is the person who holds the legal title of a vehicle, N.J.S.A. 39:1-1, case law holds that the true owner of an automobile may be one other than the holder of the legal title. American Hardware Mutual Ins. Co. v. Muller, 98 N.J. Super. 119 (Ch.Div.1967), aff'd 103 N.J. Super. 9 (App.Div.1968); see also Horowitz v. Schanerman, 117 N.J.L. 314 (E. & A.1936); Tinsman v. Parsekian, 65 N.J. Super. 217 (App.Div.1961).
There is no doubt that if the Legislature had intended that an applicant be the title owner or the registered owner of the vehicle, it would have said so. One must assume, in interpreting statutes, that the Legislature chooses its words carefully. ...