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State, Div. of Motor Vehicles v. Caruso

June 26, 1996


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

Approved for Publication June 26, 1996.

Before Judges Petrella and P.g. Levy. The opinion of the Court was delivered by P.g. Levy, J.A.D.

The opinion of the court was delivered by: Levy

The opinion of the Court was delivered by P.G. LEVY, J.A.D.

N.J.S.A. 17:29A-35(b) establishes a Merit Rating Plan under which the New Jersey Division of Motor Vehicles (DMV), levies surcharges each year on drivers who have accumulated six or more points on or after February 10, 1983, in the amount of $100 plus $25 for each point over six. Drivers convicted of operating a motor vehicle under the influence of liquor or drugs (N.J.S.A. 39:4-50) or refusing to submit to a chemical test (N.J.S.A. 39:4-50.4a) are surcharged $1000 for the first two convictions and $1500 for the third, each year for three years. DMV remits the funds it collects to the New Jersey Automobile Insurance Guaranty Fund (N.J.S.A. 17:33B-5) to be transferred to the Market Transition Facility Revenue Fund (N.J.S.A. 34:1B-21.12). In 1994 N.J.S.A. 17:29A-35 was amended to authorize the Director of DMV to issue a certificate of debt to the Clerk of the Superior Court, when a driver fails to pay a surcharge. The docketing of the certificate "shall have the same force and effect as a civil judgment," with all the remedies and proceedings for collection, "but without prejudice to any right of appeal." L. 1994, c. 64, § 1.

Defendant Louis Caruso accrued over $14,000 of surcharges since 1985, and DMV utilized this procedure in order to collect the accruals, with due notice to defendant. Defendant moved to set aside the resulting judgment, and appeals from the denial of his motion. He contends that: DMV should be estopped from arguing that the surcharges constituted a debt, since it previously contended that surcharges were not a debt in a bankruptcy case; *fn1 the amendment of N.J.S.A. 17:29A-35 should not be applied retroactively; the amendment constituted an ex post facto law and imposed double jeopardy; and the amendment violated defendant's right to due process.

Defendant has frequently violated the statutes regulating traffic and driver licensing. He accumulated forty-seven points from 1979 to 1983, from eleven offenses for speeding, two for disregarding stop signs, and one for failing to observe a traffic control device. One of his speeding violations was for driving eighty-four miles per hour in a forty-mile-per-hour zone. Defendant was involved in four accidents in 1980, 1981 and 1984. At the time of the 1984 accident, he refused to submit to a chemical test, and his license was suspended for this violation. Nevertheless, defendant operated a vehicle while suspended and while intoxicated in 1985, 1987, and 1990; he was convicted of each violation and his license was again suspended. The latest suspension was for ten years.

In addition to the suspensions, DMV assessed insurance surcharges against defendant for his various offenses every year from 1984 through 1994, except 1991, pursuant to N.J.S.A. 17:29A-35, and sent him bills for the amounts due. Defendant paid only his 1984 surcharge; the balance due on the unpaid surcharges was $15,100 as of October 2, 1994. Each time defendant failed to pay his surcharge, DMV suspended his driving privilege.

On October 2, 1994, DMV issued and sent defendant a "Proposed Notice of Judgment," advising that since defendant's driving privilege was suspended and since he operated a vehicle during the suspension period, "we now have the authority to impose a judgment against you pursuant to N.J.S.A. 17:29A-33." The notice gave defendant the option to pay the amount due ($15,100) in one lump sum or in five monthly installments. If no payment was received by November 1, 1994, DMV stated it would file a certificate of debt with the Superior Court.

On the back of its notice, DMV explained that once it filed the certificate of debt, it "may take judgment action against you and collect the surcharge debt through involuntary means," including liens against real property and garnishment of salary. DMV advised defendant that he was "not entitled to a hearing in regard to this notice as you have exhausted your right to appeal the billings on which this notice is based." However, DMV gave defendant an address and phone number to report any "error regarding a surchargeable offense on your driving record."

On October 7, 1994, defendant's attorney wrote to DMV, questioning its authority to impose judgment, and questioning the violations for operating a vehicle during a suspension period. Defendant did not otherwise dispute the $15,100 due. DMV responded on October 20, 1994, citing N.J.S.A. 17:29A-35 for its authority. DMV also reduced the amount due by $750 since an April 14, 1991, violation for driving while suspended was not surchargeable.

On December 6 and 14, 1994, DMV's collection attorney wrote to defendant advising that the judgment against him had been docketed and that he now owed $17,253.40 as of December 6 and $17,268.43 as of December 14. *fn2 On January 6, 1995, DMV's attorney issued defendant an "Information Subpoena and Written Questions" asking about his assets and income.

Defendant moved to set aside the judgment and quash the subpoena. The motion Judge denied the motion, but stayed compliance with the subpoena pending appeal, finding that the filing of an ex parte certificate of debt did not violate due process, since it was "a mere additional collection method," there was notification that it would be filed, and there was a right to appeal. He agreed with DMV that the entry of the judgment did not constitute a new liability, but was an "enforcement tool." He rejected defendant's argument that the new collection scheme changed payment of surcharges from voluntary, as a condition to the driving privilege, to mandatory. The Judge reasoned ...

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