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Bashir v. Commissioner of Department of Insurance

June 16, 1998

HERBERT BASHIR, PLAINTIFF-APPELLANT,
v.
COMMISSIONER OF THE DEPARTMENT OF INSURANCE, DESIGNATED DEFENDANT IN A HIT & RUN CASE, DEFENDANT-RESPONDENT, AND HARTFORD INSURANCE COMPANY, A CORPORATION OR BUSINESS ORGANIZATION, TWIN CITY FIRE INSURANCE COMPANY, A CORPORATION OR BUSINESS ORGANIZATION, SONDHEIM & LOUGHLIN, INC., A CORPORATION OR BUSINESS ORGANIZATION, SPERO MARGEOTES DIAMOND COACH LIMO SERVICE, INC., A CORPORATION OR BUSINESS ORGANIZATION, DEFENDANTS.



Before Judges Dreier, P.g. Levy, and Wecker.

The opinion of the court was delivered by: Wecker, J.A.D.

[9]    Submitted May 5, 1998

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

This appeal addresses the interplay between benefits provided by the Unsatisfied Claim and Judgment Fund (UCJF) pursuant to N.J.S.A. 39:6-61 et seq., and by the Uninsured Employer's Fund pursuant to N.J.S.A. 34:15-120.1 et seq., also known as Article 7A of the Workers' Compensation Act. The legislative history of the statutes creating each Fund provides little guidance to their intended interaction.

Petitioner, Herbert Bashir, was a limousine driver for a company that carried neither workers' compensation nor automobile liability insurance. He was driving the company's vehicle when it was involved in a collision with a hit-and-run driver. Bashir filed for benefits from the Uninsured Employers Fund pursuant to N.J.S.A. 34:15-120.1. That Fund pays "awards against uninsured defaulting employers who fail to provide compensation to employees or their beneficiaries in accordance with the provisions of the workers' compensation law." However, under the 1988 amendment to Article 7A, an award is limited to medical expenses and temporary disability. Pain and suffering and permanent disability awards are no longer available from the Uninsured Employers' Fund. N.J.S.A. 34:15-120.2b and c, as amended by L. 1988, c. 25, § 2.

Plaintiff also sought benefits under the Unsatisfied Claim and Judgment Fund and reached a tentative settlement with the UCJF in the amount of $9,000 "subject to Board approval and an Eligibility Hearing." Thereafter, the UCJF declined payment based upon N.J.S.A. 39:6-70(a), which provides for summary Disposition of UCJF applications at a hearing where the applicant is required to show, among other things, that "[h]e is not a person covered with respect to such injury or death by any workers' compensation law . . . . " Plaintiff brought this action to enforce the claimed settlement. The Law Division Judge concluded that despite the very limited scope of Article 7A Uninsured Employers Fund benefits, petitioner was a "person . . . covered by [a] workers' compensation law," and as such is precluded from receiving benefits under the UCJF statute. The Judge rejected plaintiff's contention that the reasoning of Licata v. Lutz, 48 N.J. 255 (1966), should allow him to recover from the UCJF.

The UCJF was created by statute in 1952. The Uninsured Employers Fund was created in 1966, the same year Licata was published. Section 70(a) of the UCJF Law has never been amended, and there is no indication that the Legislature ever considered the application of §70(a) to beneficiaries of the Uninsured Employers Fund. Principles of statutory interpretation are not especially helpful in deciding whether the "covered by" language of §70(a) applies to the Uninsured Employers Fund. The Supreme Court opinion in Licata is the only direct interpretation of that provision, and therefore our best guidance.

In Licata, the plaintiff employee had signed a waiver of Article 2 workers' compensation benefits and was therefore permitted to pursue his common law remedies pursuant to Article 1 of the Worker's Compensation Act. The Licata Court held that the UCJF barred employees qualified to receive Article 2 remedies, but not employees entitled to common law remedies permitted by Article 1. The plaintiff here has neither remedy, but only recourse to the Uninsured Employers Fund. The Court's reasoning in Licata, concluding that the Article 1 eligible employee is not barred, is instructive:

The employee who is covered by Article II has a remedy that is readily available and difficult to defeat.

The Article I remedy imposes more burdens upon the employee. The employee who is covered by Article I must be ready to face the rigors of litigation in the law courts. He must allege and prove negligence on the part of his employer, N.J.S.A. 34:15-1. Even though his injury arose by accident out of and in the course of his employment, he is not guaranteed a recovery. In no sense can an employee covered only by the provisions of Article I be considered "covered * * * by any workmen's compensation law" within the meaning of N.J.S.A. 39:6-70(a).

[Licata, supra, 48 N.J. at 258 (citations omitted)].

Given the limitations of the remedy afforded by the Uninsured Employers Fund, we conclude that like Licata, plaintiff is not a person "covered" by any workers' compensation law "within the meaning of N.J.S.A. 39:6-70(a)." See id.

We recognize that the literal words of the UCJF statute appear to support the motion Judge's ruling. However, "`[t]he surest way to misinterpret a statute or a rule is to follow its literal language without reference to its purpose.'" Coco Bros., Inc. v. Pierce, 741 F.2d 675, 679 (3d Cir. 1984) (quoting Viacom Int'l Inc. v. Federal Communications Comm'n, 672 F.2d 1034, 1040 (2d Cir. 1982)). See also Dodd v. Copeland, 99 N.J. Super. 481, 486 (App. Div.), aff'd, 52 N.J. 537 (1968) ("The literal sense of terminology cannot prevail over the reason and spirit of the expression as a whole.")

The purposes of both the Uninsured Employers Fund and the UCJF are similar: to protect persons who suffer injury that should have been compensable by an insuror for the responsible party but for that party's defalcation. The similarity of purpose--providing at least some benefits to one who is victimized by another's failure to obtain statutorily-mandated insurance coverage--cannot be overlooked. Of course, there is a concomitantly similar need to protect the public treasury by avoiding duplicate recovery. See, e.g., Wilson v. UCJF, 109 N.J. 271, 281 (1988) ("If there is one definite principle that emerges from our PIP law, policy, and precedent, it ...


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