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McCloud v. New Jersey Property-Liability Insurance Guaranty Association

January 25, 2008


On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-105-07.

Per curiam.


Argued January 14, 2008

Before Judges A.A. Rodríguez and C.S. Fisher.

Plaintiff was a patron of a deli in Linden on November 29, 2006 when the building was struck by an automobile. This allision caused plaintiff to be thrown to the floor. As a result of the personal injuries he claims to have suffered, plaintiff served notice on the New Jersey Property-Liability Insurance Guaranty Association (Association) in its role as statutory administrator of the Unsatisfied Claim and Judgment Fund (Fund), claiming he had no access to insurance that would provide him with personal injury protection (PIP) benefits.

When his claim was denied, plaintiff filed a verified complaint and obtained the entry of an order that required the Association to show cause why it should not provide PIP benefits pursuant to N.J.S.A. 39:6-86.1; the Association immediately cross-moved for dismissal. The trial judge granted plaintiff's application and denied the Association's motion.

The Association has appealed, arguing among other things that plaintiff is not eligible for PIP benefits from the Fund because he was the owner of a registered but uninsured vehicle at the time of the accident. We agree with that contention and reverse.

To succeed on his complaint, plaintiff was required to demonstrate that "[h]e was not at the time of the accident, the owner or registrant of an uninsured motor vehicle . . . ." N.J.S.A. 39:6-70(d). In interpreting this provision, our Supreme Court observed that its language "would appear to create an absolute bar to recovery." Foxworth v. Morris, 134 N.J. 284, 287 (1993). However, the Court held that such an absolute bar would lead to absurd results if applied literally and could not have been what the Legislature intended. Id. at 287-88. Accordingly, in endorsing our earlier holding in Caldwell v. Kline, 232 N.J. Super. 406 (App. Div. 1989), the Court held that "when one has taken a vehicle off the road with no intention of operating the uninsured vehicle, disqualification under N.J.S.A. 39:6-70(d) would 'extend its scope beyond that intended by the Legislature.'" 134 N.J. at 290 (quoting Caldwell, supra, 232 N.J. Super. at 412). As a result, the Court determined that the bar was not absolute and that an exception should apply in appropriate cases.

In crafting this exception to N.J.S.A. 39:6-70(d), the Court held that the burden of proof must be placed on the party seeking the benefit of the exception. In addition, the Court mandated that mere "[a]necdotal evidence" will not suffice, but, instead, the plaintiff must demonstrate "there was no intention to make the vehicle operable in the immediate future after acquisition or withdrawal from the road," and prove "by competent evidence that substantial repairs were required in order to make the vehicle operable." Id. at 291. Here, although plaintiff provided somewhat inconsistent statements at various times, we are satisfied that he never asserted that the vehicle was inoperable within the intendment of Foxworth.

In plaintiff's pre-suit notice of intention to make a claim against the Fund, he stated under oath that he owned a registered 1990 Chevrolet but that he had cancelled the insurance "and taken the car off the road temporarily" (emphasis added). He did not assert that the vehicle was inoperable in any sense of the word or that it required repairs. In the complaint filed by his counsel, plaintiff verified that he owned the aforementioned registered vehicle, but that the vehicle was "not being driven at the time of the accident," because he had "taken the car off the road and was not driving it even near the time of the accident because he didn't need it and there was no insurance on it." The complaint further indicated that it was plaintiff's intention "to get that vehicle insured in the future when he needed the use of the car." Again, plaintiff did not assert that the vehicle was inoperable or that it required substantial repairs to become operable, but only that he had chosen to take it off the road.

Once the Association filed its motion to dismiss, plaintiff filed a certification that attempted to adhere to Foxworth's requirements. Plaintiff explained that he took the car off the road . . . because it had become dangerous to drive. Going up a small hill, the van had no power. There was also oil coming out of the exhaust. There was the imminent threat that the engine would blow up while driving and perhaps cause an accident.

Plaintiff further explained in this certification that on October 15, 2006 he had obtained an estimate for repairs, which indicated the cost of replacing the engine with a used engine. Plaintiff concluded by stating that he then made "the decision that the car should be taken off the road," that he cancelled the insurance and "put the car in my driveway and did not thereafter use it" because "the van was not safely drivable."

We conclude that the trial judge mistakenly determined that these assertions met the Foxworth test. Indeed, accepting as true and broadly interpreting plaintiff's sworn statements, he provided no evidence that the vehicle was inoperable. Instead, he asserted only that it was dangerous to operate. He even gave examples of its operability, stating in his latest sworn statement that he "took the car off the road" and left it in his driveway because the vehicle had "no power" when climbing a small hill. The test of inoperability is not that the vehicle's operation is dangerous or inadequate but that it is not capable of being operated absent substantial repairs. Accepting the truth of plaintiff's most current allegations -- and ignoring both his earlier statement that the vehicle was only taken off the road "temporarily" and his previous failure to mention the vehicle's alleged engine troubles -- we conclude that the plaintiff's proofs failed to meet the Foxworth test.*fn1

Accordingly, we reverse the judgment entered in favor of plaintiff and remand for the entry of a judgment dismissing the ...

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