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Roig v. Kelsey

Decided: May 19, 1994.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 262 N.J. Super. 579 (1993).

Garibaldi, Wilentz, Clifford, Handler, Pollock, O'Hern, Stein


The opinion of the court was delivered by GARIBALDI, J.

The issue is whether N.J.S.A. 39:6A-12 of the New Jersey Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 to -35 (No-Fault Law), prohibits an injured party from recovering from a tortfeasor the medical-expense deductible and twenty-percent copayment under a personal-injury-protection (PIP) policy. We conclude that the Legislature intended the No-Fault Law to bar that type of fault-based recovery.


On January 15, 1990, David Kelsey was a passenger in an automobile driven by his sister when it was struck from behind by an automobile driven by Michael Roig. Kelsey was injured and incurred medical expenses of $1,769. Kelsey, who lived with his sister, was eligible for PIP medical-expense benefits under his sister's automobile-insurance policy, which contained the basic $250 medical-expense deductible and twenty-percent copayment for medical expenses between $250 and $5,000. Because of the deductible and copayment, $553.80 of Kelsey's medical expenses were unpaid. Kelsey had no other health-insurance policy that would have paid those medical expenses, and therefore he sought recovery from Roig.

Roig refused to pay and filed a declaratory-judgment action seeking relief from payment of Kelsey's outstanding medical expenses. He also moved for summary judgment on the ground that N.J.S.A. 39:6A-12 (section 12) prohibited recovery of the deductible and copayment. Kelsey cross-moved for summary judgment, asserting that section 12 allowed payment of expenses incurred up to the deductible amount. The trial court, concluding that the Legislature's intent to bar recovery of the medical deductible and copayment under section 12 was so clear that any indication in the statute to the contrary must yield to it, granted Roig's motion.

The Appellate Division reversed the trial court and remanded the case for further proceedings. 262 N.J. Super. 579 (1993). That court held, however, that only if an injured party qualified to bring suit for non-economic losses under N.J.S.A. 39:6A-8 could that party include in that action against the tortfeasor the amount of the deductible and copayment not otherwise collectible from other insurance sources. 262 N.J. Super. 579 at 580-81.

Kelsey sought certification, and Roig filed a cross-petition for certification. We granted both petitions, N.J. (1993).


No-Fault Law

The original No-Fault Law enacted in 1972, L. 1972, c. 70, was largely the work of the Automobile Insurance Study Commission, created in 1970 by a joint resolution of the Senate and General Assembly. L. 1970, J. Res. 4. The adoption of that law was hailed as a major innovation in tort and insurance law that would end high automobile-insurance rates and congestion-causing numbers of personal-injury suits.

The No-Fault Law's goal was "'compensating a larger class of citizens than the traditional tort-based system and doing so with greater efficiency and at a lower cost."' Oswin v. Shaw, 129 N.J. 290, 295, 609 A.2d 415 (1992) (quoting Emmer v. Merin, 233 N.J. Super. 568, 572, 559 A.2d 845 (App. Div.), certif. denied, 118 N.J. 181 (1989)). That "new approach" to automobile insurance was to result

in the motoring public's securing protection at lesser cost, expediting the relief of the accident victim and his family from a frequently staggering and intolerable economic burden, and yet preserving that victim's right to full and adequate compensation in cases which involve more serious and disabling injury.

In addition to bringing about an intended reduction in insurance premiums, another major benefit of the proposed system would be a reduction of the present court backlog. A substantial percentage of civil court actions are automobile accident cases. Under the proposed plan, it is expected that many of these cases would be settled outside the court, thereby permitting other more serious and meritorious causes to be heard with more dispatch.

[Governor's Second Annual Message (January 11, 1972) (emphasis added).]

Although the movement to adopt no-fault legislation was the "result of ever-increasing automobile-insurance premiums," Oswin, supra, 129 N.J. 290 at 295, it also arose from the recognition that the necessity of determining fault in a lawsuit before recovery of medical expenses resulted in great hardship for many injured parties. See Governor's First Annual Message (January 12, 1971) (stating, "Too many injured persons must wait too long for an uncertain remedy while enduring physical and financial injury.") Thus, the proponents of the legislation anticipated that the elimination of minor personal-injury claims from the court system not only would reduce insurance premiums but also would provide prompt payment of medical expenses to injured parties.

To achieve those purposes the Legislature created the no-fault statutory scheme. Under that scheme every automobile liability-insurance policy issued in New Jersey had to provide PIP coverage, including medical-expense benefits, "without regard to negligence, liability or fault of any kind, to the named insured and members of his family residing in his household who sustained bodily injury as a result of an automobile accident." N.J.S.A. 39:6A-4. A person's no-fault insurance was to be an injured person's exclusive remedy for medical-expense claims arising out of an automobile accident. See Smelkinson v. Ethel & Mac Corp., 178 N.J. Super. 465, 467, 429 A.2d 422 (App. Div. 1981) (holding that right of plaintiff to recover medical expenses directly from tortfeasor's insurer was to substitute the plaintiff's right to recover from insured tortfeasor).

As a trade-off for the payment of medical expenses, regardless of fault, no-fault systems provided for "either a limitation on or the elimination of conventional tort-based personal-injury lawsuits." Oswin, supra, 129 N.J. at 295. N.J.S.A. 39:6A-8 (section 8) provided such a limitation by holding that an injured person could file a lawsuit only if medical expenses exceeded a $200 threshold.

Section 12 also was part of the trade-off. In the original No-Fault Law, it read as follows:

Evidence of the amounts collectible or paid pursuant to sections 4 and 10 of this act to an injured person is inadmissible in a civil action for recovery of damages for bodily injury by such injured person.

N.J.S.A. 39:6A-4 (section 4) and N.J.S.A. 39:6A-10 (section 10) were the provisions allowing for PIP coverage. Section 12 therefore disallowed recovery of PIP benefits "collectible" or "paid" in a civil suit.

In frequent attempts to lower the cost of insurance and eliminate minor personal-injury claims, the Legislature amended the No-Fault Law again in 1983, 1988, and 1990. L. 1983, c. 362; L. 1988, c. 119; L. 1990, c. 8. In the 1983 amendments, the insured was presented with a number of options for coverage. The first choice was between a $200 or a $1,500 medical-expense threshold before a personal-injury suit could be instituted. The second choice was the selection of either a $500, $1,000, or $2,500 medical-expense deductible. Ibid.; Cynthia M. Craig & Daniel J. Pomeroy, New Jersey Auto Insurance Law § 5:2-1b, at 49 (1994) (hereinafter Craig & Pomeroy).

Included in the legislative history for the 1983 amendment, the New Jersey Automobile Freedom of Choice and Cost Containment Act of 1984, N.J.S.A. 39:6A-1 to -35, is a sponsor statement that explains the options available to motorists for no-fault medical benefits. It states:

There would continue to be unlimited medical[-]expense benefits but insureds would have the option to choose, at reduced premiums stated as a percentage of the coverage premium, medical expense deductibles in amounts of $500, $1000 and $2500. This option would permit an insured to coordinate his automobile[-] insurance coverage with other forms of health coverage.

[Sponsor Statement to Assembly Bill No. 3981, at 26 (1983) (emphasis added).]

The Legislature hoped that those optional deductibles would reduce the cost of automobile insurance by shifting some of the rising medical-expense costs to alternative forms of health insurance. Ibid.

Under the heading "Tort Limitation Option," that same Sponsor Statement posits that the statutory provision instituting ...

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