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Unsatisfied Claim and Judgment Fund Bd. v. New Jersey Mfrs. Ins. Co.

Decided: February 3, 1994.

UNSATISFIED CLAIM AND JUDGMENT FUND BOARD AND COMMISSIONER OF INSURANCE ON BEHALF OF THE UNSATISFIED CLAIM AND JUDGMENT FUND BOARD, PLAINTIFFS-APPELLANTS,
v.
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, DEFENDANT-RESPONDENT



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

King, A.m. Stein and A.a. Rodriguez. The opinion of the court was delivered by A.a. Rodriguez, J.s.c. (temporarily assigned).

Rodriguez

The issue presented in this case is whether the Unsatisfied Claim and Judgment Fund (Fund) can recover personal injury protection (PIP) benefits paid to passengers injured while traveling in an uninsured motor vehicle from the insurer of a third party tortfeasor. We hold that the Fund cannot make such a recovery.

On January 7, 1989, Jose Fernandez, the owner and operator of an uninsured vehicle was travelling north on Paulson Avenue in Clifton, New Jersey at the same time that a vehicle owned and operated by John S. Zane was traveling south on the same street. The two vehicles collided injuring Fernandez and his two passengers. Zane's vehicle was insured by New Jersey Manufacturers Insurance Company, (NJM).

The passengers sued Zane and the Fund for bodily injuries. After lengthy negotiations, the Fund agreed to pay the passengers' PIP benefits in exchange for the right to recover such benefits from Zane's insurer.

The Fund filed this action against NJM as the insurer of third party tortfeasor John Zane to recover all PIP benefits paid to the passengers. It promptly moved for summary judgment. The Law Division Judge denied the Fund's motion, granted NJM's cross-motion and dismissed the complaint. We affirm.

The Fund advances two theories for recovery and cites as authority N.J.S.A. 39:6-86.6 (the Fund Law) and N.J.S.A. 39:6A-9.1 (the No-Fault Law), as interpreted in Wilson v. Unsatisfied Claim and Judgment Fund Bd., 109 N.J. 271, 536 A.2d 752 (1988).

I. N.J.S.A. 39:6-86.6 (THE FUND LAW)

The Fund wants this court to interpret the last four lines of N.J.S.A. 39:6-86.6 to permit recovery of PIP benefits from the PIP carrier of any party which was insured at the time of the accident. This is an improper and unreasonable reading of the statute which provides in relevant part:

The Commissioner shall be entitled to recover on behalf of [the Fund] for all payments made by it pursuant to sections 7 and 10 of this Act, regardless of fault,

from any person who owned or operated the automobile involved in the accident and whose failure to have the required insurance coverage in effect at the time of the accident resulted in the payment of personal injury protection benefits.

If the identity of the owner and operator is not ascertained until after [PIP] benefits have been paid then the Commissioner shall be entitled to recover for such payments, regardless of fault, from the operator if he was driving without the owner's permission or from the operator and the owner if he was driving with the owner's permission, or, in either case, from the insurer if there is an insurance policy ...


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