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Murphy v. Allstate Insurance Co.

Decided: December 7, 1990.

JOSEPH MURPHY, MARY ELLEN AGUNZO, AND DAVID KOTKES, PLAINTIFFS,
v.
ALLSTATE INSURANCE COMPANY, KENNETH D. MERIN, COMMISSIONER NEW JERSEY DEPARTMENT OF INSURANCE AND NEW JERSEY AUTOMOBILE FULL INSURANCE UNDERWRITING ASSOCIATION, DEFENDANTS



Rosalie B. Cooper, J.s.c.

Cooper

[246 NJSuper Page 43] Before this court, in this case of first impression, are cross-motions for summary judgment for a declaration concerning the constitutionality, as of 1989, of N.J.S.A. 39:6A-8 of the New

Jersey Automobile Reparation Reform Act commonly known, and hereafter referred to, as the "no fault" insurance law. N.J.S.A. 39:6A-1 et seq.

The underlying cause of action arose from a 1989 automobile accident in which plaintiffs, passengers in a car, sustained injuries for which they are seeking monetary payment or reimbursement.

Previously that aspect of the suit concerning the culpability of Allstate Insurance Co., the servicing carrier for the New Jersey Automobile Full Insurance Underwriting Association, known as the JUA, was dismissed by stipulation.

The Attorney General has joined in JUA's motion, essentially relying on the arguments advanced and relied upon by that defendant.

Since the issue of the constitutional validity of N.J.S.A. 39:6A-8 cannot be considered in a vacuum, this court looks for guidance to other sections of the "no fault" statute.

Section three of the act, in pertinent part, requires owners of automobiles registered in or principally garaged in New Jersey to maintain auto insurance.

Section four of the act establishes personal injury protection, commonly known as "PIP" coverage to include medical payment for an insured and members of the family who are economically dependent and residing in the insured's household who suffer injuries resulting from "ownership, operation, maintenance or use" of an automobile. In addition, PIP encompasses passengers in the insured's cars who have no insurance of their own.

PIP benefits also include income continuation benefits, essential service benefits, death benefits and funeral expenses.

Section eight of the act, as of 1989, known as the "threshold provision" states:

One of the following two tort options shall be elected, in accordance with section 14.1 of P.L.1983, c. 362 (C.39:6A-8.1), by any named insured required to

maintain personal injury protection coverage pursuant to section 4 of P.L.1972, c. 70 (C.39:6A-4):

a. Every owner, registrant, operator or occupant of an automobile to which section 4 of P.L.1972, c. 70 (C.39:6A-4), personal injury protection coverage, regardless of fault, applies, and every person or organization legally responsible for his acts or omissions, is hereby exempted from tort liability for noneconomic loss to a person who is subject to this subsection and who is either a person who is required to maintain the coverage mandated by this act, or is a person who has a right to receive benefits under section 4 of P.L.1972, c. 70 (C.39:6A-4), as a result of bodily injury, arising out of the ownership, operation, maintenance or use of such automobile in this State, unless that person has sustained a personal injury which results in death; dismemberment; significant disfigurement; a fracture; loss of a fetus; permanent loss of use of a body organ, member, function or system; permanent consequential limitation of use of a body organ or member; significant limitation of use of a body function or system; or a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute that person's usual and customary daily activities for not less than 90 days during the 180 days immediately following the occurrence of the injury or impairment; or

b. As an alternative to the basic tort option specified in subsection a. of this section, every owner, registrant, operator, or occupant of an automobile to which section 4 of P.L.1972, c. 70 (C.39:6A-4) applies, and every person or organization legally responsible for his acts or omissions, shall be liable for noneconomic loss to a person who is subject to this subsection and who is either a person who is required to maintain the coverage mandated by P.L.1972, (C.39:6A-1 et seq.) or is a person who has a right to receive benefits under section 4 of that act (C.39:6A-4), as a result of bodily injury, arising out of the ownership, operation, maintenance or use of such automobile in this State.

The tort option provisions of subsection a. of this section shall also apply to the right to recover for noneconomic loss of any person eligible for benefits pursuant to section 4 of P.L.1972, c. 70 (C.39:6A-4) but who is not required to maintain personal injury protection coverage and is not an immediate family member, as defined in section 14.1 of P.L.1983, c. 362 (C.39:6A-8.1), under an automobile insurance policy.

The tort option provisions of subsection a. of this section shall also apply to any person subject to section 14 of P.L.1985, c. 520 (C.39:6A-4.5).

The tort option provisions of subsections a. and b. of this section as provided in this 1988 amendatory and supplementary act shall apply to automobile insurance policies issued or renewed on or after January 1, 1989 and as otherwise provided by law. [ N.J.S.A. 39:6A-8; emphasis supplied]

Thus, it is clear that N.J.S.A. 39:6A-8, which is applicable to the case at bar, deals with the classification of individuals to whom no auto insurance is available, being neither auto owners nor residents in a household in which a car owner does have

insurance, who are, by legislation, relegated to the "verbal threshold" position.

The conclusions reached by this court are largely dependent upon the legal reasoning and fundamentals set forth in the cases of Barone v. Department of Human Services, 107 N.J. 355, 526 A.2d 1055 (1987), Frazier v. Liberty Mutual Insurance Co., 150 N.J. Super. 123, 374 A.2d 1259 (Law Div.1977), Rybeck v. Rybeck, 141 N.J. Super. 481, 358 A.2d 828 (Law ...


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