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Bongo v. New Jersey Bell Telephone Co.

July 18, 1991


Marmo, J.s.c.


The issue raised here deals with the scope of a judicially-created immunity from civil liability. The applicability of that immunity to the context of this matter has not been addressed in any reported decision by the courts of New Jersey although separate law division courts orally have decided the identical issue differently.

In Weinberg v. Dinger, 106 N.J. 469, 524 A.2d 366 (1987), the Supreme Court concluded an extensive examination of the immunity held by certain privately-owned, publicly-regulated companies, i.e. public utilities. These public utilities had come to this immunity essentially as a result of the holding

(discussed hereafter) in Baum v. Somerville Water Company 84 N.J.L. 611, 87 A. 140 (1913). In Weinberg, the Supreme Court abolished the long-standing immunity from civil liability held by these public utilities. However, there was one exception to the abolition. One area of immunity was preserved. The Supreme Court recognized an immunity for the utility from lawsuits based on certain subrogation claims.

The Weinberg Court determined that it was necessary to preserve this area of immunity to the water-company utility involved in that case in order to protect the utility consumer from ultimately absorbing the additional cost if litigation were allowed. The scenario contemplated by the Supreme Court which would cause this to occur would lead, in effect, to the consumer paying twice. This would happen in this way: First: the consumer would pay his insurance carrier the cost to protect his property from fire damage. Should the consumer's property be damaged by fire as a result of an insufficient water supply to extinguish the blaze, the carrier would recover its payment to the consumer through a subrogation action against the water-company utility for its failure to provide an adequate supply of water. The utility payment of the subrogation claim to the carrier would be passed on to the consumer in the form of a rate increase thereby constituting a second cost to the consumer. [106 N.J. at 492, 524 A.2d 366].

Weinberg reached the judgment that it was preferable to have the insurance carrier bear the cost of the fire damage resulting from insufficient water supply rather than to permit the carrier the right to recover its loss from the water-company utility. The carrier is in the business of insuring against such a loss and since public utilities pass all their costs on to the consumer in the form of rate increases, the only way to prevent the consumer from bearing the additional cost of the fire loss was to immunize the utility. Id. 106 N.J. at 489-492, 524 A.2d 366.

The instant matter does not involve a water-company utility or fire damage. It concerns a communications utility and a motor vehicle accident.

On January 26, 1989, the defendant, Orhan Koskar, was an employee of the defendant, New Jersey Bell Telephone Company (hereafter referred to as N.J. Bell), and was operating a vehicle owned by N.J. Bell. This vehicle collided with the rear of a vehicle operated by the plaintiff, Catherine N. Bongo. The plaintiff's insurer, Allstate Insurance Company, brought this subrogation suit against New Jersey Bell to recover the cost of its payment for property damage to the Bongo vehicle.

The defendant, N.J. Bell, now moves for an order of summary judgment dismissing the complaint on the grounds that Weinberg v. Dinger precluded subrogation claims against it. N.J. Bell is a privately-owned, publicly-regulated company operating as a public utility and regulated by the Board of Public Utilities. N.J. Bell has submitted certified proofs attesting to the fact that payment of damages to third parties are considered appropriate rate making costs by the Board of Public Utilities and that such expenditures are recovered dollar for dollar in approved rate increases to N.J. Bell customers. N.J. Bell maintains that the philosophy and/or holding of Weinberg immunizes it from this lawsuit. It contends that like the water company in Weinberg it is a public utility and is immune from subrogation claims. N.J. Bell argues that, as Weinberg directs, the cost should be borne by the carrier in order to preclude the consequence of the customer paying twice -- first for motor vehicle insurance and second for increased utility rates.

N.J. Bell has submitted the record of two orally-rendered, law-division opinions addressing this exact issue and deciding it in favor of N.J. Bell. The plaintiff, similarly, has submitted proof that in another case a trial court ruled from the bench against N.J. Bell on this same question. These references are presented not as authority but to show that litigation of identical matters-in-dispute has produced contradictory results under

the current state of the law. Indeed, in each of the cases submitted by N.J. Bell, the Judge concluded his decision with the hope that the question would be addressed at the appellate level.

The plaintiff responds to the defendant's motion for summary judgment with a cross-motion for an order striking the defense of immunity which is asserted as a separate defense by the defendant N.J. Bell. The plaintiff maintains that there is no basis in the law for the immunity claimed by N.J. Bell.

I have concluded that Weinberg v. Dinger does not authorize immunization of N.J. Bell from subrogation claims arising out of motor vehicle accidents.

N.J. Bell bases its claim of immunity on the authority of Weinberg v. Dinger. The history of immunity studied by the Supreme Court in Weinberg does not ...

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