On appeal from the Superior Court, Appellate Division, whose opinion is reported at 277 N.J. Super. 236 (1994).
Chief Justice Wilentz and Justices Handler, Pollock, O'hern, and Garibaldi join in this opinion. Justices Stein and Coleman have filed a separate Dissenting opinion.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
Nancy Strube v. Travelers Indemnity Company of Illinois, et al. (A-32-95)
(NOTE: This Court wrote no full opinion in this case. Rather, the Court's affirmance of the judgment of the Appellate Division is based substantially on the reasons expressed in the PER CURIAM opinion below.)
Argued October 23,1995 - Decided December 6, 1995
The issue on appeal is whether the immunity granted by N.J.S.A. 17:28-1.9(a) applies to policies issued prior to its effective date, June 29, 1993. N.J.S.A. 17:28-1.9(a) (subsection (a)) provides that no person shall be liable in an action for damages due to a named insured's selection of the given level of motor vehicle insurance. The statute abrogated prior judicial decisions holding insurers, agents and brokers liable for failing to advise the customers of the availability of additional underinsured motorists (UIM) and uninsured motorist (UM) coverage.
On April 3, 1990, Nancy Strube sustained injuries as a result of an automobile accident. She 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 (Travelers) in the amount of $300,000 liability with underinsured motorist coverage of $100,000. Strube settled her case against the driver of the other vehicle for $100,000 and then instituted this suit claiming that the defendants failed to advise Hamilton Auto Center of the availability of the additional UIM coverage.
The Law Division dismissed Strube's complaint on the ground that defendants were immune from damages pursuant to subsection (a). In reaching this Conclusion, the court determined that the statute was intended to apply to policies issued prior to its effective date.
The Appellate Division affirmed the decision of the trial court, holding that the immunity conferred by the statute extends to antecedent policies. The Appellate Division noted the general principle of statutory construction that favors the prospective application of legislation and that the terms of a statute will not be given retroactive effect, unless these terms are so clear, strong, and imperative that no other meaning can be given to them or unless the intent of the Legislature cannot otherwise be satisfied. The Appellate Division found that supervening considerations clearly compelled a prospective application. The court pointed to the statutory language, in which the legislature referred to the New Jersey Automobile Full Insurance Underwriting Association (JUA) and the Market Transit Facility (MTF). The court found it significant that these agencies stopped writing insurance policies before the effective date of subsection (a). However, the Legislature specifically granted the JUA and the MTF immunity under the statute. The court reasoned that the Legislature clearly would not have made specific reference to those defunct organizations unless it intended the statutory immunity extend to claims arising prior to June 29, 1993. This is the only sensible interpretation of subsection (a).
The Appellate Division also found that the legislative history demonstrates an implied expression of retrospective intent. The statute was intended to put an end to the explosion of litigation, concerning insurers', brokers', and agents' liability for providing insufficient information, by providing blanket immunity except in cases of wilful, wanton or gross negligence. Although the Appellate Division found subsection (b) of the statute prospective, the court was satisfied that the Legislature enacted subsection (a) in response to the confused and contentious history of litigation and they intended the immunity provision to extend to all antecedent policies.
Judge Kestin Dissented, finding the statute applied prospectively because the Legislature did not clearly state otherwise. Judge Kestin noted that the statute does not contain an explicit legislative direction regarding the retrospectivity question. However, the Legislature's intent can be inferred from language of the statute, the mechanics of its operations or the available legislative history. According to Judge Kestin, the terms used in subsection (b) can only be seen as prospective in operation. To accept the argument that the Legislature intended the immunity conferred in subsection (a) to be retroactive, while the conduct required in subsection (b) to implement that immunity to be prospective is inconsistent and is at variance with the court's responsibility to give the most sensible interpretation to the statute. Moreover, Judge Kestin noted that to interpret subsection (a), as does the majority renders the fair notice policy embodied in subsection (b) a nullity, at least with respect to all contracts of insurance entered into before the effective date of the statute. A court should avoid interpretations that nullify any provisions by the statute. Thus, if the Legislature's intendment in respect to the retrospectivity/prospectivity issue is ambiguous, the court should not guess at what the Legislature intended or imply its own preference.
HELD: The opinion of the Appellate Division is affirmed, substantially for the reasons stated in Judge Baime's majority opinion below. The statutory immunity from liability for failure to advise customers of availability of additional underinsured and uninsured motorist coverage applies retroactively and, therefore, extends to policies issued before the statute's effective date of June 29, 1993.
JUSTICE STEIN and JUSTICE COLEMAN, Dissent substantially for the reasons expressed by Judge Kestin in his Dissenting ...