On certification to the Superior Court, Appellate Division, whose opinion is reported at 218 N.J. Super. 326 (1987).
For reversal -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. For affirmance -- None. The opinion of the Court was delivered by Handler, Justice.
The broad issue presented by this appeal implicates any obligations of the defendant New Jersey Transit Bus Operations, Inc.,*fn1 a public entity, to provide insurance for claims attributable to injuries from vehicular accidents involving the buses that it owns and operates. The issue is raised by the plaintiff, Linda Ross, who was a passenger on a Transit bus when it was struck by a stolen vehicle. Ross filed suit to recover personal injury damages against Ronald Longson, Jr., the driver of the stolen vehicle; Transit; Transit's bus driver, Michael Guido, Jr.; and the owner of the stolen car, Aleides Perez.
The matter was submitted to arbitration pursuant to N.J.S.A. 39:6A-25 to -35. The arbitrator found Longson to be the sole party at fault and awarded damages of $1,555 for medical bills and $4,000 for pain and suffering. Ross moved for an order to confirm the arbitration award and compel payment. In addition, she requested that Transit be compelled to pay these damages through uninsured motorist coverage because Longson was uninsured and the stolen car involved in the accident was not covered by the owner's insurance policy. She argued that Transit, like every operator of a motor vehicle, should carry this basic coverage for the benefit of passengers in the vehicle. The trial court entered judgment against Longson but
denied the motion to compel Transit to pay. Ross then appealed this denial.
In a unanimous decision the Appellate Division reversed the trial court determination. Ross v. Transport of New Jersey, 218 N.J. Super. 326 (1987). Transit then filed a petition for certification, which was granted. 109 N.J. 46 (1987).
The initial question is whether Transit, as a public entity, is subject to the provisions of the Motor Vehicle Security-Responsibility Law, N.J.S.A. 39:6-23 to -60 (hereafter "Responsibility Law"), which would obligate it to carry uninsured motor vehicle insurance coverage. Uninsured motor vehicle insurance covers the risk that a passenger in a vehicle may be injured through the negligence of the operator of another vehicle that is not insured. Transit argues that it is exempt from uninsured motorist coverage by virtue of N.J.S.A. 39:6-54. N.J.S.A. 39:6-54 specifies that the Responsibility Law "shall not apply with respect to any motor vehicle owned by . . . this State or any political subdivision of this State. . . ."
This question presents a matter of statutory construction. Its determination entails an examination of the State's comprehensive statutory system, which is designed to have "financially responsible persons available to meet the claims of persons wrongfully injured in automobile accidents." Selected Risks Ins. Co. v. Zullo, 48 N.J. 362, 371 (1966).
Central to this statutory scheme is N.J.S.A. 39:6B-1 to -3 ("Compulsory Insurance Law"). Under this Law, owners of motor vehicles registered or principally garaged in the state must maintain motor vehicle liability insurance coverage for at least the minimum amount statutorily established. The law provides penalties when this is not done. The New Jersey Automobile Reparation Reform Act ("No Fault Act"), N.J. S.A. 39:6A-1 to -20, further mandates that every liability policy insuring automobiles shall include "no fault" coverage, providing
compensation without regard to fault for automobile accidents involving members of the insured's family and injuries to passengers or pedestrians resulting from accidents involving the insured's car. See Sotomayor v. Vasquez, 109 N.J. 258, 261 (1988); Zyck v. Hartford Ins. Group, 143 N.J. Super. 580 (Law Div.1976), aff'd 150 N.J. Super. 431 (App.Div.1977), certif. den. 75 N.J. 521 (1977). The No Fault Act also requires that automobile policies maintain uninsured motorist ("UM") coverage as provided under N.J.S.A. 17:28-1.1.*fn2 See N.J.S.A. 39:6A-14. To satisfy the UM provision, no policy insuring motor vehicles of any type can be issued without providing minimal protection against damages due to accidents involving uninsured vehicles or "hit and run" vehicles.*fn3 Significantly, however, this Act does not apply to policies insuring buses, see Wagner v. Transamerica Ins. Co., 167 N.J. Super. 25, 31 (App.Div.), certif. den. 81 N.J. 60 (1979).
The Responsibility Law, under which Transit claims to be exempt from insurance obligations, also mandates the form of insurance policies, N.J.S.A. 39:6-48. For those who do not have insurance or a certificate of self-insurance, this Law provides penalties such as the automatic suspension of license and registration (or of in-state driving privileges for foreign drivers). N.J.S.A. 39:6-25 to -27. It thus directly supports the
Compulsory Insurance Law, and indirectly supports the compulsory UM requirements of the No Fault Act and Title 17. See also Williams v. Sills, 55 N.J. 178, 181 (1970) ("principal design [of Responsibility Law] was to protect the public against financially irresponsible motorists"). In addition, N.J.S.A. 48:4-46 to -48 regulates buses and taxicabs as public utilities, and requires that private operating vehicles carrying passengers for hire maintain established insurance protection or self-insurance, N.J.S.A. 48:4-47. This then triggers the requirement in Title 17, N.J.S.A. 17:28-1.1, that all auto insurance coverage include UM protection.
Another relevant part of the comprehensive statutory scheme is the Unsatisfied Claim and Judgment Fund Law ("UCJF Law"), N.J.S.A. 39:6-61 to -91. This Law establishes a fund, supported by insurers, to provide damage relief for persons who sustain losses or injury inflicted by financially irresponsible or unidentified operators of motor vehicles when such persons would otherwise be remediless. See Tiger v. American Legion Post No. 43, 125 N.J. Super. 361, 371 (App.Div.1973); McKenna v. Wiskowski, 181 N.J. Super. 482, 489 (Ch.Div.1981). The Compulsory Insurance Law was designed in part to relieve the UCJF of serious financial pressures since, in confluence with the requirement that all insurance policies maintain UM protection, the UCJF Law provides "exclusively remedial parallel coverage against the negligence of uninsured and unknown motorists to be provided by one's liability carrier." Beltran v. Waddington, 155 N.J. Super. 264, 268 (App.Div.1978); see Lundy v. Aetna Casualty & Sur. Co., 92 N.J. 550, 554-55 (1983); Motor Club of Amer. Ins. Co. v. Phillips, 66 N.J. 277, 284-85 (1974); ...