On appeal from Superior Court, Law Division, Cumberland County.
Deighan and Landau. The opinion of the court was delivered by Deighan, J.A.D.
[227 NJSuper Page 369] On this appeal we are required to determine whether a claimant who has received temporary disability benefits under the Workers' Compensation Act, N.J.S.A. 34:15-1 et seq. for 340 weeks, is entitled to income continuation benefits under N.J.S.A. 39:6A-4 and 10 of the New Jersey Automobile Reparation Reform Act (No-Fault), N.J.S.A. 39:6A-1 et seq., after termination of the workers' compensation benefits. We hold that where temporary disability benefits under workers' compensation are paid in excess of income disability payments under No-Fault but the disability continues beyond the period of the workers' compensation benefits, a claimant is entitled to receive income continuation benefits under the No-Fault Act as long as
the disability persists up to the maximum income continuation benefits under the policy less a credit under N.J.S.A. 39:6A-6 for the workers' compensation benefits paid.
This is an action for a declaratory judgment by plaintiffs to determine personal injury protection benefits (PIP) coverage pursuant to the New Jersey Automobile Reparation Reform Act (No-Fault), N.J.S.A. 39:6A-1 et seq., under an automobile insurance policy issued by defendant New Jersey Manufacturer's Insurance Company (NJM) to plaintiff Margaret Olivero. On a previous appeal we reversed a dismissal of the complaint and remanded for a determination as to whether income continuation benefits were payable to Mrs. Olivero's daughter, Tina, pursuant to N.J.S.A. 39:6A-4 and 39:6A-10. Olivero v. New Jersey Manufacturers Ins. Co., 199 N.J. Super. 191 (1985). After remand, plaintiffs filed an amended complaint to reform the insurance policy to provide for income continuation benefits for as long as plaintiff's disability continued. See Clendaniel v. New Jersey Manufacturers Insurance Company, 96 N.J. 361 (1984). See also Lumbermens Mutual Casualty Co. v. Carriere, 170 N.J. Super. 437 (Law Div.1979).
Plaintiffs appeal from an order entered April 1, 1987*fn1 which granted defendant's motion for summary judgment dismissing plaintiffs' complaint. The order also denied plaintiffs' motion for partial summary judgment to determine and adjudge that Tina Olivero is entitled to income continuation benefits under N.J.S.A. 39:6A-10 for as long as her disability exists and further to reconstruct her wage losses for impairment of earning capacity.
The basic facts underlying plaintiffs' claim are essentially undisputed. On April 21, 1981, plaintiff Tina, then 12 years of age, was seriously injured when she was struck by an automobile while riding her bicycle and delivering papers for the
Vineland Times Journal. As a result of head injuries, she suffered from neurological deficiencies with ambulation, coordination and speech dysfunction. Her learning ability and memory retention have also been seriously impaired. Extensive surgery, treatment and therapy, designed to minimize the effects of the injury, have continued over the years since the accident to the present time.
On May 11, 1981, a workers' compensation petition was filed by Tina. On July 16, 1981, Liberty Mutual Ins. Co., the workers' compensation carrier for Vineland Times Journal, was directed to "supply to the petitioner all reasonable and necessary medical care necessary for her to recover from her injuries suffered on April 21, 1981." Liberty Mutual was also directed to pay the minimum temporary disability payments of $53.07 per week (Tina earned $29 per week for six and one-half hours work). As of July 17, 1984, Liberty Mutual paid a total of $157,356.58 for medical benefits as well as temporary disability benefits under workers' compensation which continued after that date.
Tina has been treated at the Children's Hospital of Philadelphia on several occasions. Medical doctors at Children's Hospital recommended home therapy and physical therapy requiring private tutoring, remodeling of plaintiffs' home and physical therapy at a health spa.
She has also been admitted on numerous occasions to Children's Seashore House in Atlantic City for surgery and rehabilitative treatment. In June 1984, Tina had surgery to correct the spastic condition of her toes and foot. During July and August 1984 she was an in-house patient at Children's Seashore House and received occupational and speech-language therapy. The discharge summaries from Children's Seashore House state that physical, occupational and speech therapy are to be continued at home and at the Newcomb Hospital in Vineland.
Although Tina is still severely disabled and handicapped, she was able to graduate from high school in 1986. She is now 18
years of age and is a freshman at Cumberland County College. Her marks range between "B's" and "C's" and, after graduation, she intends to transfer to a four-year college. Although it has been six years since the automobile accident, Tina remains under the care of a doctor and continues to be severely disabled.
At the time of the accident, Tina resided with her mother, Margaret Olivero. When Mrs. Olivero initially applied for an insurance policy from NJM, she requested option 5 for additional income continuation benefits up to $36,400. The policy, which was renewed from year to year, was issued in February 1977 with coverage under option 5 and was in effect on the date of the accident.
On August 12, 1987, the Workers' Compensation Judge entered an order approving settlement which awarded Tina 340 weeks temporary disability at $53.07 per week for a total of $18,424.63*fn2 plus total permanent disability of 450 weeks at $124.88 per week for a total of $56,196 less $4,192.53 paid for a balance of $52,003.47. Permanent disability payments were made retroactive to January 13, 1986, thus allowing Liberty Mutual a credit for all temporary disability benefits paid to Tina after that date with "[p]ermanent disability to continue beyond 450 wks., as allowed by statute." The 100% of total was based on neurologic, orthopedic and psychiatric permanent disability.
The order also required that:
Respondent [Liberty Mutual] shall continue to authorize all medical treatment presently provided petitioner, including without limitation, all physicians presently treating petitioner out of Childrens' Hosp. in Philadelphia, Pa., Leona Glovsky, a speech therapist in Vineland, N.J., and such further reasonable and necessary treatment as may be recommended by these physicians.
NJM acknowledges that under option 5 of the policy, Tina is entitled to the maximum income continuation benefits up to
$41,600 which represents $5,200 as the basic benefits plus $36,400 for additional income continuation benefits.
On this appeal, plaintiffs raise the following issues: " Defendant NJM's failure to offer the option to purchase additional PIP benefits provided by N.J.S.A. 39:6A-10 to cover plaintiff mandates that the policy be reformed to provide these benefits;  [p]laintiff is entitled to the payment of income continuation benefits from the date that she is declared permanently disabled by the Workers' Compensation Court, and  [p]laintiff was entitled to reconstruct and project the amount her wages would have been except for the injuries suffered in the automobile accident."
In their first issue, plaintiffs contend that "[a]t the time of the accident, the benefits provided in the insurance policy did not include the required section 10 [ N.J.S.A. 39:6A-10] option for income continuation benefits for the length of the disability covering either the named insured and/or household relatives." (Emphasis supplied.) They contend that the failure to offer additional options requires that the policy be reformed to provide those benefits. See Clendaniel v. N.J. Manufacturers Ins. Co., supra. See also Lumbermens Mutual Casualty Co. v. Carriere, supra.
The basic personal injury protection (PIP) pursuant to N.J.S.A. 39:6A-4b provides:
b. Income continuation benefits. The payment of the loss of income of an income producer as a result of bodily injury disability, subject to a maximum weekly payment of $100.00, per week. Such sums shall be payable during the life of the injured person and shall be subject to an amount or limit of $5,200.00, on account of injury to any one person, in any one accident.
N.J.S.A. 39:6A-10*fn3 pertaining to additional PIP coverage at the time the policy was issued provided:
Additional personal injury protection coverage.
Insurers shall make available to the named insured covered under section 4, suitable additional first-party coverage for income continuation benefits, essential services benefits, survivor benefits and funeral expense benefits. Income continuation in excess of that provided for in section 4 must be provided as an option by insurers to persons for disabilities, as long as the disability persists, up to an income level of $35,000.00 per year, with the excess between $5,200.00 and the amount of coverage contracted for to be written on the basis of 75% of said difference. The Commissioner of Insurance is hereby authorized and empowered to establish, by rule or regulations, the amounts and terms of income continuation insurance to be provided pursuant to this section. [Emphasis supplied.]
Under this section, the Commissioner of Insurance promulgated N.J.A.C. 11:3-7.3 pertaining to additional income continuation benefits as set forth in Appendix I annexed hereto.
In addition to the five options which insurance carriers were required to offer, the notes to the table under Appendix A of the regulation required that the insurance carriers inform their insureds that: "Broader forms of additional personal injury protection benefits are available on a 'referred to company' basis." The Commissioner also notified insurance carriers that policyholders must be apprised of coverage available under the Act and promulgated a form letter for that purpose. See Lumbermens Mutual Casualty Co. v. Carriere, 170 N.J. Super. at 404. Insurers were not required to use the Commissioner's form letter, but to the extent that the insurer's form letter varied from the Commissioner's in substance, his approval was required. Id. at 444-45. The Commissioner suggested the following to be included in a notice or letter by the insurance carriers to their insureds:
As a part of each loss of income benefits there are included additional benefits for essential services and a $10,000 death benefit. Please refer to the enclosed 'Offer to Purchase Additional Coverage' for further details of these options. If you desire coverage in excess of those quoted above, inquire directly of your [company] [agent].
Richard Pazdan, an underwriter with NJM for 16 years, was deposed by plaintiffs. He stated that prospective insureds were sent a business package which contained an explanation of "Personal Injury Protection coverage" and also the availability of "Additional PIP Coverage". The notice itemized the five options for additional PIP coverage as set forth in Appendix I attached hereto. Above the schedule of the five options, the form contained the following:
Additional coverage for loss of income is available in blanket sum amounts of $5,200, $7,800, $13,000, $20,800 or $36,400 payable in specific weekly maximum, and applies per named insured (i.e., husband and wife).
Therefore, we are pleased to make available additional first-party "No Fault" coverages as outlined in five (5) options below. Broader forms of additional Personal Injury Protection benefits are available on request. [Emphasis supplied.]
Pazdan stated that the same type notice would have been sent to Mrs. Olivero for the renewal of her policy from February 1981 to February 1982.*fn4
In addition, Pazdan testified that prior to December 1982, NJM did not offer an additional PIP endorsement as an option under N.J.S.A. 39:6A-10 to provide income continuation benefits "for so long as the disability existed." He testified that there was no provision in 1981 for rating this type of risk. In absence of a rating, the risk could not be offered to insureds. He also stated that the absence of a rating was not peculiar to ...