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Lilly v. Prudential Insurance Co.

February 2, 1990

MARILYN LILLY, PLAINTIFF,
v.
PRUDENTIAL INSURANCE COMPANY, DEFENDANT



Menza, J.s.c.

Menza

OPINION

Each party moves for summary judgment.

The question presented in this case is whether personal injury protection (PIP) benefits can be denied to an owner of an uninsured operable automobile which had not been operated and had been placed in storage by its owner prior to the accident.

There are no cases which have addressed this issue.

On June 9, 1988, plaintiff sustained injuries in an automobile accident which occurred when she was operating an automobile owned by her cousin and insured by the defendant, Prudential.

At the time of the accident, plaintiff was the owner of an operable uninsured 1987 automobile which she had not been operating for at least three months prior to the accident. According to the plaintiff, this automobile had been stored and had not been operated from February 1988 to sometime in July, when it was repossessed. Plaintiff testified that the reason that she did not operate the automobile was because she was financially unable to pay either the financing charges or the liability insurance on the automobile.

Prudential has refused to make PIP payments to the plaintiff based on an exclusionary clause in its policy which denies benefits to an owner of an automobile that "was being operated without personal injury protection coverage."*fn1

The plaintiff contends that the exclusion is inapplicable to her because her automobile had been stored and had not been operated prior to the accident. It is the intent to operate, she contends, that is dispositive of the question of whether an owner is required to maintain liability insurance.

The No Fault Statute requires that an owner maintain liability insurance:

Every owner or registered owner of an automobile registered or principally garaged in this State, shall maintain liability insurance ...


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