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Knowles v. Wilson

July 8, 1996

ROBERT J. KNOWLES, PLAINTIFF-RESPONDENT,
v.
SUSAN M. WILSON, WAYNE I. WILSON, DEFENDANTS, AND THE UNSATISFIED CLAIM AND JUDGMENT FUND BOARD OF THE STATE OF NEW JERSEY, DEFENDANT-APPELLANT.



On appeal from a final order of The Unsatisfied Claim and Judgment Fund Board of the State of New Jersey.

Approved for Publication July 8, 1996.

Before Judges Shebell and Dreier. The opinion of the court was delivered by Dreier, P.j.a.d.

The opinion of the court was delivered by: Dreier

The opinion of the court was delivered by

DREIER, P.J.A.D.

Defendant, The Unsatisfied Claim and Judgment Fund Board of the State of New Jersey, appeals from a portion of a judgment requiring the Fund to pay prejudgment interest in the amount of $2305, representing the interest on plaintiff's $10,000 award from the date of filing of the complaint to the date of the judgment. *fn1

Plaintiff was injured in an automobile accident on June 6, 1989 as he and a friend were walking to their automobile across a diner's parking lot. While driving a car owned by defendant Wayne Wilson, defendant Susan Wilson struck plaintiff. Neither the driver nor owner had automobile insurance on the date of the accident. In the ensuing litigation, Ms. Wilson was found to be eighty percent liable and plaintiff twenty percent responsible. Plaintiff received a $12,500 award, reduced by his comparative negligence to $10,000, and the Judge awarded an additional $2305 as prejudgment interest. The Fund agreed to pay, and has paid, the $10,000 damage award. It claims, however, that interest is payable by the Fund only from the date of a court order directing payment of the underlying judgment, and contends that prejudgment interest is unauthorized.

Plaintiff asserts that there are references in N.J.S.A. 39:6-77 to the payment of interest, and therefore plaintiff should be entitled to prejudgment interest. The statute refers, however, only to interest charged against the uninsured motorist which accrues after the judgment creditor has assigned its collection right to the Fund. Thus, this statute does not support plaintiff's claim. Plaintiff also contends that N.J.S.A. 39:6-69 provides for interest to the judgment creditor in stating that a plaintiff's recovery is limited to "the maximum amount or limit of $15,000 exclusive *fn2 of interest and costs." There is no indication in the statute whether the described interest is prejudgment, as opposed to post-judgment. This ambiguity is not resolved by the court rule regarding the inclusion of prejudgment interest, R. 4:42-11(b). This rule provides:

(b) Tort Actions. Except where provided by statute with respect to a public entity or employee, and except as otherwise provided by law, the court shall, in tort actions, including products liability actions, include in the judgment simple interest, calculated ... from the date of the institution of the action or from a date 6 months after the date the cause of action arises, whichever is later, provided that in exceptional cases the court may suspend the running of such prejudgment interest....

The problem before us is succinctly stated in Pressler, Current N.J. Court Rules, comment 7 on R. 4:42-11 (1996):

The rule has also been held not to apply to a judgment required to be paid by the Unsatisfied Claim and Judgment Fund. See Lynch v. Heymann [119 N.J. Super. 151, 290 A.2d 459 (Law Div. 1972)]. But see Bellino v. Strelecki, 121 N.J. Super. 331, 297 A.2d 15 (Law Div. 1972), rejecting Lynch and charging the Fund with interest under the rule. And see Boyd v. Marini, 132 N.J. Super. 324, 333 A.2d 559 (App. Div. 1975), approving Bellino and disapproving Lynch. If prejudgment interest is allowed against the Fund, however, it is clear that it is allowable only on the payable portion of the verdict where the verdict exceeds the statutory maximum. Boyd v. Marini, (supra) .

Although the authorities cited in the comment all precede the current court rule, and therefore do not interpret it, the principles of these cases should still be considered.

First, there appears to be no question that the Fund operates in somewhat different capacities depending upon the situation it faces. In the case of a hit-and-run driver as in Boyd, the Fund is the named party and controls the litigation. Where there is no question that the damages will exceed the Fund's statutory limit, a prohibition against the awarding of interest would remove the only control a court might have over dilatory tactics, including an unreasonable refusal to settle an open-and-shut case. Even before the court rule, we recognized in Boyd, (supra) , that in such a case the judgment chargeable against the Fund could include prejudgment interest. 132 N.J. Super. at 327.

A different situation exists, however, where the case is defended because of a bona fide factual dispute raised by the uninsured defendant who is present and participating in the defense. Should there be a different rule in that instance? We think not. While it is true that the Fund's own obligation to pay any award runs only from an order for payment, N.J.S.A. 39:6-71, the amount that the Fund is required to pay on behalf of the uninsured motorist is the "judgment for bodily injury or death," or for "damages to property." N.J.S.A. 39:6-69. Prior to the promulgation of R. 4:42-11(b), tort judgments did not include prejudgment ...


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