On appeal from the Superior Court of New Jersey, Law Division, Monmouth County.
Michels, Gruccio and D'Annunzio. The opinion of the court was delivered by Michels, P.J.A.D. D'Annunzio, J.A.D., dissenting.
[245 NJSuper Page 593] Defendant Hazel Frank Gluck, on behalf of the Unsatisfied Claim and Judgment Fund Board ("Fund"), appeals from a
judgment of the Law Division that awarded plaintiff Laverne Esdaile attorneys' fees and costs of $13,362.05. Plaintiff cross-appeals from that portion of the judgment which ordered her to reimburse the Fund the $26,724.11 that she received in settlement of the personal injury claim.
Briefly, an intoxicated, uninsured motorist struck and seriously injured plaintiff as she stood next to a parked car. Neither plaintiff nor anyone else in her household owned a motor vehicle, nor did plaintiff have any insurance to pay her medical expenses. Because plaintiff lacked insurance coverage, she sought relief from the Fund. The Law Division ordered the Fund to pay plaintiff $40,086.16 as personal injury protection benefits ("PIP benefits").
Plaintiff's attorney discovered thereafter that a $300,000 insurance policy covered the tavern where the uninsured motorist drank before the accident. Plaintiff, thereupon, entered into a settlement with the tavern, releasing the tavern and the tavern owner's estate from "any and all claims for personal injuries as a result of [the] automobile accident . . ." in exchange for $275,000.
Plaintiff moved for a determination as to whether the Fund was entitled to reimbursement from the proceeds of the settlement, and if so, whether she was entitled to counsel fees and costs. The trial court ordered plaintiff to reimburse the Fund $40,086.16 less counsel fees and costs of $13,362.05. This appeal followed.
Contrary to plaintiff's claim, the trial court properly required plaintiff to reimburse the Fund the $26,724.11 that she received in settlement with the tavern. There is nothing in this record to show or even suggest that plaintiff's settlement with the tavern's insurance carrier excluded the special damages included in the PIP benefits paid to plaintiff by the Fund. Clearly, plaintiff is not entitled to recover PIP benefits from the Fund and at the same time, recover these same damages in her personal injury damage action against the tavern. Allowing
plaintiff to retain the money received from the Fund for PIP benefits, as well as the money obtained from the tavern in settlement, sanctions a double recovery, defeats the important public policies underlying the Fund and undermines the financial integrity and stability of the Fund.
Enacted in 1952, the Unsatisfied Claim and Judgment Fund Law, N.J.S.A. 39:6-61 et seq., "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." Ross v. Transport of N.J., 114 N.J. 132, 137, 553 A.2d 12 (1989) (citing Tiger v. American Legion Post No. 43, 125 N.J. Super. 361, 371, 311 A.2d 179 (App.Div.1973); McKenna v. Wiskowski, 181 N.J. Super. 482, 489, 438 A.2d 355 (Ch.Div.1981)). The Legislature created the Fund to "provide the kind of protection a liability insurance policy would provide." 25 New Jersey Practice § 1151 (1987). However, the Fund is not obligated to "make every claimant completely whole, but merely to provide some basic measure of relief to persons entitled thereto under its terms in order to forestall the possible hardship attendant on a claimant's absorption of the entire economic loss occasioned by the accident. . . ." Id. A strong public policy favors the protection of the Fund's financial integrity, Ross v. Transport of N.J., 114 N.J. at 146, 553 A.2d 12, and thus, the Fund must "be administered in a fashion to assure that only those persons legitimately entitled to participate in its benefits are paid therefrom." Douglas v. Harris, 35 N.J. 270, 279, 173 A.2d 1 (1961).
In 1972, the Legislature amended the original Fund statute to allow the payment of PIP benefits in addition to traditional damages. N.J.S.A. 39:6-86.1-.6. To qualify for PIP benefits, the claimant must meet the eligibility requirements of the original Fund statute. N.J.S.A. 39:6-86.1e. Specifically, the claimant must show that she is "not ...