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I/M/O Order of Commissioner of Insurance v. New Jersey Automobile Full Insurance Underwriting Association

Decided: May 17, 1994.

I/M/O THE ORDER OF THE COMMISSIONER OF INSURANCE DATED OCTOBER 19, 1992 DEFERRING CERTAIN CLAIM PAYMENTS BY THE NEW JERSEY AUTOMOBILE FULL INSURANCE UNDERWRITING ASSOCIATION. I/M/O THE ORDER OF THE COMMISSIONER OF INSURANCE DATED NOVEMBER 9, 1992 DEFERRING CERTAIN CLAIM PAYMENTS BY THE NEW JERSEY AUTOMOBILE FULL INSURANCE UNDERWRITING ASSOCIATION. HYACENTH WALCOTT, APPELLANT,
v.
NEW JERSEY AUTOMOBILE FULL INSURANCE UNDERWRITING ASSOCIATION AND THE COMMISSIONER OF INSURANCE, RESPONDENTS.



On appeal from the Commissioner of Insurance.

Before Judges Skillman, Kestin and Wefing.

Kestin

The opinion of the court was delivered by

KESTIN, J.A.D.

We have previously recounted the history and procedural background of this matter. In re Order of Comm'r of Ins. Deferring Certain Claim Payments, etc., 256 N.J. Super. 553, 607 A.2d 992 (1992). Pursuant to our remand therein for compliance with the notice and hearing requirements of the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -21, the Commissioner of Insurance (Commissioner), on October 19, 1992, adopted an order authorized in the Fair Automobile Insurance Reform Act of 1990, N.J.S.A. 17:33B-3b(2), deferring for twelve months payments for residual bodily injury losses reflected in claims against the New Jersey Automobile Full Insurance Underwriting Association (JUA). Simultaneously with efforts to perfect the procedure leading to that deferral, a new eighteen-month deferral period for subsequent claims was being implemented. It was adopted in the Commissioner's order of November 9, 1992. The appeals filed from the adoption of both orders were consolidated.

Appellants jointly challenge the constitutionality of the Commissioner's orders on four grounds. They argue further that the Commissioner has failed to comply with APA notice requirements for the public hearing on a proposed rulemaking, and with those APA provisions mandating that all interested or affected persons be afforded reasonable opportunity to make submissions to be

fully considered by the adopting agency. Our review of the record and the arguments advanced by the parties discloses that the issues raised are without merit. Accordingly, we affirm.

We discern no proper basis for invalidating the orders on the basis of the equal protection guarantees embodied in the Fourteenth Amendment to the United States Constitution and article I, paragraph 1 of the New Jersey Constitution. Appellants have not argued that an invalid classification occurred when all persons with claims against the JUA for residual bodily injury were identified as a class warranting particularized treatment. Certainly, there has been no disparity of treatment within the class. All persons with claims against the JUA for residual bodily injury losses are treated in the same fashion. Whether they elect to settle or avail themselves of their right to a jury trial, payment of that portion of the recovery which reflects compensation for residual bodily injury is to be deferred. An equal protection violation does not exist in the absence of disparate treatment of persons who are or ought to be considered to be members of the same class. Gregory v. Ashcroft, 501 U.S. 452, , 111 S. Ct. 2395, 2406-08, 115 L. Ed. 2d 410, 430-32 (1991); Brady v. New Jersey Redist. Comm'n, 131 N.J. 594, 610-11, 622 A.2d 843 (1992).

No federal or state due process violation has been made out, either. The factual background which we depicted in previously addressing this matter, In re Order of Comm'r, supra, 256 N.J. Super. at 555-559, highlights the critical financial condition of the JUA. Given the crisis at hand, it is clear that the means chosen to deal with it, deferral of payment for certain types of claims, is reasonable, i.e., designed as a principled method of addressing the problem and clearly having the capacity to achieve the result sought, here, some release of the immediate fiscal pressures facing the JUA. Where a coordinate branch of government has adopted reasonable measures designed to achieve a permissible governmental objective and seemingly having the capacity to do so, the judicial branch will not substitute its judgment for that of the legislative or executive by invalidating

the choices made. Ferguson v. Skrupa, 372 U.S. 726, 730, 83 S. Ct. 1028, 1031, 10 L. Ed. 2d 93, 97 (1963); City of Newark v. Natural Resource Council, 82 N.J. 530, 539-40, 414 A.2d 1304, cert. denied, 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980).

Appellants argue that other means less onerous than those adopted were available, and should have been implemented. In order to carry the day on this argument, appellants must first establish the existence of a right or interest of special or fundamental significance before restrictions on legislative or executive choice will be imposed. Hobby v. United States, 468 U.S. 339, 346, 104 S. Ct. 3093, 3097, 82 L. Ed. 2d 260, 267 (1984); In re American Reliance Ins. Co., 251 N.J. Super. 541, 552, 598 A.2d 1219 (App. Div. 1991), certif. denied, 127 N.J. 556 (1992). They must then establish either that the means chosen unduly interfere with the special right or interest so as to render invalid the contemplated reach of governmental action, Roe v. Wade, 410 U.S. 113, 155, 93 S. Ct. 705, 728, 35 L. Ed. 2d 147, 178 (1973); Greenberg v. Kimmelman, 99 N.J. 552, 564, 494 A.2d 294 (1985), or that there is an effective lack of telic relationship between the means chosen ...


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