On appeal from Superior Court of New Jersey, Law Division, Mercer County.
Before Judges Gaulkin, Baime and Kestin.
The opinion of the court was delivered by
N.J.S.A. 17:28-1.9a provides that no person shall be liable in an action for damages due to a named insured's selection of a given level of motor vehicle insurance. The statute was intended to abrogate prior judicial decisions holding insurers, agents, and brokers liable for failing to advise their customers of the availability of additional underinsured and uninsured motorist coverage. At issue is whether the immunity granted by the statute applies to policies issued prior to its effective date, June 29, 1993. We hold that the immunity conferred by the statute extends to antecedent policies.
On April 3, 1990, plaintiff sustained injuries as a result of an automobile accident. At the time, plaintiff was driving a tow truck leased by her employer, Hamilton Auto Center. The vehicle was covered by a policy placed by Webster M. Grimm, a broker, through the New Jersey Automobile Insurance Plan (CIAPNJ). The policy was written by Travelers Indemnity Company in the amount of $300,000 liability with underinsured motorist coverage of $100,000. Plaintiff settled her case against the driver of the other vehicle for $100,000, and then instituted this action against Travelers, Grimm, and CIAPNJ, claiming that the defendants failed to advise Hamilton of the availability of additional underinsured motorist coverage. The Law Division dismissed plaintiff's complaint on the ground that defendants were immune from damages pursuant to N.J.S.A. 17:28-1.9a. In reaching this Conclusion, the Law Division determined that the statute was intended to apply to policies issued prior to its effective date. We agree and affirm.
At the outset, we acknowledge the general principle of statutory construction that favors the prospective application of legislation. See Phillips v. Curiale, 128 N.J. 608, 615, 608 A.2d 895 (1992); Twiss v. State Dept. of Treasury, 124 N.J. 461, 466, 591 A.2d 913 (1991); Dewey v. R.J. Reynolds Tobacco Co., 121 N.J. 69, 95, 577 A.2d 1239 (1990); Gibbons v. Gibbons, 86 N.J. 515, 521, 432 A.2d 80 (1981); Rothman v. Rothman, 65 N.J. 219, 224, 320 A.2d 496 (1974); La Parre v. YMCA of the Oranges, 30 N.J. 225, 229, 152 A.2d 340 (1959). The terms of a statute will not be given retroactive effect "unless they are so clear, strong and imperative that no other meaning can be annexed to them, or unless the intent of the Legislature cannot otherwise be satisfied." Kopczynski v. County of Camden, 2 N.J. 419, 424, 66 A.2d 882 (1949). Undoubtedly, this principle expresses a sound rule of statutory interpretation. It is nonetheless only a rule of statutory construction. All such principles "have a single purpose - to aid the court in its quest for legislative intent." Rothman v. Rothman, 65 N.J. at 224. Where, as here, "supervening considerations clearly compel a contrary determination, this, like all other rules of statutory construction must give way." Ibid.; see also State v. Bey, 112 N.J. 45, 103, 548 A.2d 846 (1988), certif. denied, 130 N.J. 19 (1992); Brown v. State Dept. of Personnel, 257 N.J. Super. 84, 88-89, 607 A.2d 1354 (App. Div. 1992); Carnegie Bank v. Shalleck, 256 N.J. Super. 23, 39, 606 A.2d 389 (App. Div. 1992); Grippo v. Schrenell & Co., 223 N.J. Super. 154, 161-62, 538 A.2d 404 (App. Div. 1988), 2 Norman J. Singer Sutherland, Statutory Construction § 41.11 at 410-11 and § 41.05 at 366.
We begin with the operative statutory language. N.J.S.A. 17:28-1.9 provides:
a. Notwithstanding any other provision of law to the contrary, no person, including, but not limited to, an insurer, an insurance producer, as defined in section 2 of P.L. 1987, c. 293 (C.17:22A-2), a servicing carrier or non-insurer servicing carrier acting in that capacity pursuant to P.L.1983, c. 65 (C.17:30E-1 et al.) or section 88 of P.L.1990, c. 8 (C.17:33B-11), the New Jersey Automobile Full Insurance Underwriting Association created pursuant to section 16 of P.L.1983, c. 65 (C.17:30E-4), the Market Transition Facility created pursuant to section 88 of P.L.1990, c. 8 (C.17:33B-11), and any plan established pursuant to section 1 of P.L.1970, c. 215 (C.17:29D-1), shall be liable in an action for damages on account of the election of a given level of motor vehicle insurance coverage by a named insured as long as those limits provide at least the minimum coverage required by law or on account of a named insured not electing to purchase underinsured motorist coverage, collision coverage or comprehensive coverage. Nothing in this section shall be deemed to grant immunity to any person causing damage as the result of his willful, wanton or grossly negligent act of commission or omission.
b. The coverage selection form required pursuant to section 17 of P.L.1983, c. 362 (C39:6A-23) shall contain an acknowledgement by the named insured that the limits available to him for uninsured motorist coverage and underinsured motorist coverage have been explained to him and a statement that no person, including, but not limited to, an insurer, an insurance producer, as defined in section 2 of P.L.1987, c. 293 (C.17:22A-2), a servicing carrier or non-insurer servicing carrier acting in that capacity pursuant to P.L. 1983, c. 65 (C.17:30E-1 et al.) or section 88 of P.L.1990, c. 8 (C.17:33B-11), the New Jersey Automobile Full Insurance Underwriting Association created pursuant to section 16 of P.L.1983, c. 65 (C.17:30E-4), the Market Transition Facility created pursuant to section 88 of P.L.1990, c. 8 (C.17:33B-11), and any plan established pursuant to section 1 of P.L.1970, c. 215 (C.17:29D-1), shall be liable in an action for damages on account of the election of a given level of motor vehicle insurance coverage by a named insured as long as those limits provide at least the minimum coverage required by law or on account of a named insured not electing to purchase underinsured motorist coverage, collision coverage or comprehensive coverage, except for that person causing damage as the result of his willful, wanton or grossly negligent act of commission or omission.
Critical to our Disposition of the issue presented is the Legislature's reference to the New Jersey Automobile Full Insurance Underwriting Association (JUA) and the Market Transition Facility (MTF). It is significant that these agencies stopped writing insurance policies well in advance of the effective date of N.J.S.A. 17:28-1.9.*fn1 However, the Legislature specifically granted these entities immunity under this statute. Clearly, the Legislature would not have made specific reference to those defunct organizations unless it intended the statutory immunity to extend to claims arising prior to June 29, 1993. The JUA and the MTF would not need protection from claims arising out of policies written after their demise. Accordingly, the only sensible interpretation of N.J.S.A. 17:28-1.9a is that the Legislature intended the statute to apply to transactions which occurred prior to its effective date.
This implied expression of retrospective intent is also impelled by the pertinent legislative history. Uninsured motorist coverage was introduced in New Jersey with the enactment of L. 1983, c. 65, § 5 and L. 1983, c. 362, § 1 which amended N.J.S.A. 17:28-1.1. Prior to these amendments, insurers were only required to provide optional uninsured motorist coverage in the amount of $15,000/$30,000 for bodily injury. The amendments to N.J.S.A. 17:28-1.1 mandated a minimum of $15,000/$30,000 for bodily injury. N.J.S.A. 17:28-1.1(a). In addition, insurers were required to offer optional underinsured motorist coverage up to $250,000/$500,000 for bodily injury. N.J.S.A. 17:28-1.1(b). However, neither uninsured nor underinsured motorist coverage could be written in amounts larger than the liability limits chosen by the insured.
In order to implement these changes, the Legislature required that a written notice, buyer's guide, and coverage selection form be sent for policies in force on July 1, 1984 and, thereafter, to accompany any notice of renewal. N.J.S.A. 39:6A-23(a),(c). The statute also required the Commissioner of Insurance to promulgate regulations to insure that the buyer's guide and written notice fairly apprise customers of all possible coverage options and limits. N.J.S.A. 39:6A-23(c). The legislative and regulatory design "was to create a milieu in which New Jersey insureds would inform themselves about available coverage from the written notice and buyer's guide and make intelligent choices based on that information, asking for their agent's/broker's assistance if they had questions." Avery v. Arthur E. Armitage Agency, 242 N.J. Super. 293, 305, 576 A.2d 907 (App. Div. 1990).
Following in the wake of this legislation and its implementing regulations came a series of claims in which insureds alleged that they received improper or insufficient advice from insurance agents or brokers concerning the options available to them. In a series of decisions, both the Supreme Court and the Appellate Division held that brokers and agents were required to inform insureds of available coverage and were obliged to exercise reasonable skill and good faith in advising their customers. See Weinisch v. Sawyer, 123 N.J. 333, 340, 587 A.2d 615 (1991); Avery v. Arthur E. Armitage Agency, 242 N.J. Super. at 299. However, these cases were fact sensitive, and a myriad of questions arose as to whether an agent or broker had an affirmative, independent duty to communicate with an insured regarding the availability of added underinsured coverage. Compare Pinto v. Garretson, 237 N.J. Super. 444, 450, 568 A.2d 119 (App. Div. 1989); Bruce v. James P. MacLean Firm, 238 N.J. Super. 501, 508, 570 A.2d 49 (Law Div.), aff'd, 238 N.J. 408 (App. Div. 1989) with Wasserman v. Wharton, Lyon & Lyon, 223 N.J. Super. 394, 405-07, 538 A.2d 1270 (App. Div. 1988); Sobotor v. Prudential Property & Cas. Ins. Co., 200 N.J. Super. 333, 337-42, 491 A.2d 737 (App. Div. 1984). Additional issues were raised regarding whether a "direct writing" insurer owed a duty to its insured beyond mailing the coverage selection form, written notice, and buyer's guide. Andriani v. N.J. Mfs. Ins. Co., 245 N.J. Super. 252, 256-57, 584 A.2d 875 (App. Div.), certif. denied, 126 N.J. 327 (1991). Other questions addressed what type of initiating inquiry from the insured might trigger an agent or broker's duty to provide advice concerning the availability of additional uninsured or underinsured motorist options. Avery v. Arthur E. Armitage Agency, 242 N.J. Super. at 301-02. So too, the question of indemnity between brokers and ...