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Gargiulo v. Rutgers Casualty Insurance Co.

Decided: June 10, 1993.


On appeal from the Superior Court of New Jersey, Law Division, Ocean County.

J.h. Coleman, Shebell and Arnold M. Stein. The opinion of the court was delivered by Shebell, J.A.D.


Plaintiff, Robert Gargiulo, suffered injuries in an automobile accident resulting in the amputation of his left leg. He instituted an action for personal injury protection (PIP) benefits asserting that he needed a wheelchair and alterations to his home to insure accessibility. Although his PIP carrier, Rutgers Casualty Insurance Company (Rutgers), provided plaintiff with a wheelchair, it refused his request to make repairs and alterations to his residence. Additionally, plaintiff sought counsel fees and all costs incurred during the proceedings.

It appears that Rutgers informed the Unsatisfied Claim and Judgment Fund (UCJF) of the initial denial, and that the UCJF agreed with that determination. Rutgers filed a third-party complaint against UCJF asserting that pursuant to N.J.S.A. 39:6A-4(a), UCJF was required to reimburse Rutgers for reasonable PIP benefits in excess of $75,000.

Trial was scheduled in the Law Division for January 27, 1992. However, a few days before trial, Rutgers acceded to plaintiff's request to pay the cost of home modifications. The UCJF agreed to reimburse Rutgers for those costs pursuant to N.J.S.A. 39:6-73.1.

The issue concerning counsel fees and costs incurred by the plaintiff during the proceedings remained unresolved. Therefore, plaintiff filed a motion seeking counsel fees and costs. Rutgers opposed plaintiff's motion by seeking to compel UCJF to pay all counsel fees alone, or at least to share in the burden of paying costs equally with Rutgers. The UCJF filed a brief in opposition asserting that the UCJF may not be held liable for counsel fees and costs pursuant to statutory and case law.

The Judge heard oral argument and ordered Rutgers to pay plaintiff all counsel fees and costs, but provided that the UCJF must reimburse Rutgers for fifty percent of the sum. The Judge reasoned that where the UCJF "participate[s] in a decision with the representatives of the carrier to a decision which would ultimately subject the carrier to a payment of counsel fees, that in such a case, it would be appropriate that the UCJF also participate in the payment of those fees." The UCJF appeals from this order. We reverse.

The issue is whether the UCJF can be compelled to contribute to the cost of plaintiff's counsel fees arising from litigation between a plaintiff and an insurance carrier where the UCJF has participated in the decision to litigate the question of entitlement or coverage. See R. 4:42-9(a)(6) and N.J.S.A. 39:6-73.1. Generally, "unless legal fees are authorized by statute, court Rule or contract, they are not recoverable." Satellite Gateway Communications, Inc. v. Musi Dining Car Co., Inc., 110 N.J. 280, 285, 540 A.2d 1267 (1988) (footnote omitted). Pursuant to R. 4:42-9(a)(6), counsel fees may be awarded " [i]n an action upon a liability or indemnity policy of insurance, in favor of a successful claimant."

The purpose of the UCJF is to provide some measure of relief to persons who have sustained injuries or losses and who are otherwise remediless. See, e.g., Wharton v. Knox, 98 N.J. Super. 61, 64, 236 A.2d 151 (App.Div.1967), certif. denied, 51 N.J. 186, 238 A.2d 472 (1968); Downing v. Stewart, 85 N.J. Super. 62, 66, 203 A.2d 724 (App.Div.1964); Dietz v. Meyer, 79 N.J. Super. 194, 196,

191 A.2d 182 (App.Div.1963); Clarke v. Brown, 101 N.J. Super. 404, 413-14, 244 A.2d 514 (Law Div.1968). The relief provided by UCJF does not have to make the plaintiff whole, but must only provide a basic measure to relieve the plaintiff from having to absorb the entire monetary loss. Clarke, supra, 101 N.J. Super. at 413-14, 244 A.2d 514.

In Cheatham v. Unsatisfied Claim and Judgment Fund Bd., 178 N.J. Super. 437, 429 A.2d 407 (App.Div.1981), a person injured by an uninsured driver's pickup brought a declaratory judgment action against the UCJF Board for PIP benefits. The primary issue concerned whether the vehicle that struck plaintiff was an "automobile" pursuant to N.J.S.A. 39:6A-2a. If the vehicle fell within the definition, plaintiff would be entitled to PIP benefits. However, the plaintiff in Cheatham also alleged that he was entitled to counsel fees pursuant to R. 4:42-9(a)(6). We rejected this claim and stated we did ...

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