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Ramirez v. Duenas


June 2, 2008


On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-2620-05.

Per curiam.


Argued April 23, 2008

Before Judges Sapp-Peterson and Messano.

Defendant New Jersey Indemnity Insurance Company (NJIIC) appeals from a series of three orders that 1) permitted plaintiff Johnny Ramirez to amend his complaint and add NJIIC as a party defendant; 2) found plaintiff was "entitled to personal injury protection [PIP] benefits from [NJIIC] for medical bills causally related to his motor vehicle accident o[f] July 26, 2003"; and 3) ordered NJIIC to pay counsel fees and costs to plaintiff. NJIIC contends that plaintiff, though living in its insured's household, was not a member of the insured's family, was not economically dependent upon the insured, Brokenbaugh v. N.J. Manufacturer's Insurance Co., 158 N.J. Super. 424 (App. Div. 1978), and therefore was not entitled to PIP benefits under N.J.S.A. 39:6A-4.

We have considered this argument in light of the record and applicable legal standards. We reverse, vacate the orders that required NJIIC to pay plaintiff PIP benefits and counsel fees, and remand the matter to the trial court for the entry of judgment in favor of NJIIC. As a result, we do not consider the argument NJIIC raises with respect to the order permitting the amendment of plaintiff's complaint since the issue is now moot.


On July 26, 2003, plaintiff was a passenger in a car operated by defendant Carlos Duenas and owned by defendant Sonia Duenas Espana when it was involved in a motor vehicle accident in Elizabeth. Plaintiff made a claim for PIP benefits with New Jersey Manufacturer's Insurance Company (NJM) pursuant to an automobile insurance policy issued to Pedro Arcos. On September 12, 2003, NJIIC issued a denial letter to plaintiff's counsel, noting that plaintiff was "not a relative of [Arcos] and was not in [Arcos's] vehicle." On July 22, 2005, plaintiff filed suit against Carlos Duenas, Sonia Duenas Espana, the Unsatisfied Claim and Judgment Fund, and NJM.*fn1 After discovery ended on September 4, 2006, NJM moved for summary judgment arguing that it did not issue the policy to Arcos, a separate company, NJIIC did. Plaintiff cross-moved to amend his complaint and add NJIIC as a defendant in place of NJM.

Considering both applications, the judge entered two orders, both dated October 20, 2006; one granted NJM's summary judgment motion and dismissed the complaint as to it, and the second granted plaintiff's cross-motion and permitted him to file an amended complaint naming NJIIC as a defendant.*fn2 No additional discovery was permitted and NJIIC's subsequent motion for summary judgment was denied.

The matter proceeded as a bench trial before another judge on May 15 and 16, 2007. Plaintiff, his mother, Sandra Pineda, and Mary Ellen Trogani, a supervisor in NJIIC's PIP department all testified, and we reference that testimony in greater detail below. On June 4, 2007, the trial judge placed her findings of fact and conclusions of law upon the record, which we summarize briefly at this point as follows:

It is clear and unrebutted that since entering the United States [plaintiff] has been dependent upon Pedro Arcos, relying on him for economic support, family and de facto membership in the family unit, membership in the domestic circle that made up the family of Sandra Pineda and Pedro Arcos . . . . Although admittedly [plaintiff] was not a blood or marriage or adopted ward of Pedro Arcos, he was clearly a member of his domestic circle . . . .

[Plaintiff] has never been financially independent . . . . He went from the household of [] Arcos and [] Pineda to his girlfriend, to live together with her mother and uncle, not in a household or family of his own . . . .

Despite his job with Artistic Fence as an independent contractor and the money he had made, he has never independently maintained a household of his own. Even when living with his girlfriend, he lived with her mother and uncle and did not achieve financial, emotional, or emancipated independence as is argued by [NJIIC]. Moreover, the court is satisfied that [plaintiff] lived with and continues to this day to live with Arcos and Pineda as a de facto family within the domestic circle with reciprocal duties of care and support, both financial and emotional. See, Brokenbaugh[,][supra, 158 N.J. Super.] at 433.

On June 8, 2007, the judge entered an order requiring NJIIC to pay plaintiff's PIP benefits, and on July 20, 2007, after hearing oral argument on plaintiff's motion for counsel fees, she entered an order requiring NJIIC to pay $24,750 in fees, and $574.70 in costs. These orders were stayed pending the outcome of this appeal.


Before we turn to consideration of the testimony at trial, we briefly state the well-known standards that guide our review of the issues presented. Our review of challenges to factual findings of a judge sitting without a jury is limited and typically those findings will remain undisturbed if they are "supported by adequate, substantial and credible evidence." Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974). In particular, we give deference to the judge's ability to assess the credibility of the witnesses, ibid., and will not "engage in an independent assessment of the evidence as if [we] were the court of first instance." State v. Locurto, 157 N.J. 463, 471 (1999). However, the trial judge's "interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty v. Township Comm. of Township of Manalapan, 140 N.J. 366, 378 (1995). In this case, we conclude that the judge's mistaken interpretation of the applicable law, when applied to the factual findings she made, resulted in the erroneous conclusion that plaintiff was entitled to PIP benefits from NJIIC.


Pineda testified that plaintiff was born September 10, 1981, and, in 1985, she brought him with her when she immigrated to the United States from Guatemala. Following her separation from plaintiff's natural father, Pineda sent her son back to Guatemala, where he remained until he immigrated to the United States sometime between 1996 and 1999.*fn3 During plaintiff's absence, sometime in 1987, Pineda, and her two daughters, Sera and Jenny Ramirez, took up residence with Arcos. When plaintiff returned to the United States, he, too, moved in with his mother and Arcos. However, Pineda testified that for approximately one year prior to the accident, plaintiff did not reside with her, her daughters and Arcos, moving back with the family sometime in the first week of July 2003. At the time of the accident, Pineda testified everyone was living at 810 Canton Street in Elizabeth, though they moved shortly thereafter to 18 South Second Street in Elizabeth.

Pineda testified that Arcos paid all the bills associated with the household, though she acknowledged that she would pay for things that her daughters needed. She testified on cross-examination that plaintiff moved out of the house sometime in 2002 and moved in with his girlfriend, with whom he had a child. During this time, Pineda testified that plaintiff was working and paid all the expenses associated with his wife and child, and Arcos did not contribute financially to the situation.

Pineda testified that plaintiff separated from his girlfriend who took plaintiff's son with her. After his injury, plaintiff worked for Arcos, and, assuming he worked a full week, was earning between $500 and $600 per week. Plaintiff "never ask[ed] to be given money" after he moved back into the household, and Pineda testified that he bought things for himself, though Arcos would frequently give him gifts. During his long-term relationship with Pineda, Arcos never sought to adopt plaintiff or the other children.

Trogani was NJIIC's claims supervisor relative to plaintiff's claim for PIP benefits, and she commenced her investigation of the claim upon receipt of an affidavit of no insurance from plaintiff. Trogani testified that plaintiff had never been identified as a member of Arcos's household on the insurance policy and that the police accident report listed an address for plaintiff that was different than the South Second Street policy address. Trogani employed Commercial Investigation to investigate the conflicting addresses and policy information, and, upon review of their investigative report, NJIIC denied plaintiff PIP coverage because 1) he was not in a vehicle insured by NJIIC; and 2) he was not related by blood or marriage to the named insured, Arcos.

Plaintiff testified that when he was fifteen he emigrated from Guatemala with no assistance from his mother or Arcos. Upon locating his mother, plaintiff moved in with her, his sisters, and Arcos. Arcos paid for the food, rent, and utilities of the household. Plaintiff testified that he viewed Arcos as a father figure who always treated plaintiff as a son.

Arcos never sought to adopt plaintiff or made any attempt to obtain legal guardianship over him. Plaintiff conceded during cross-examination that the only relationship between himself and Arcos was that his mother lived in the same household as Arcos; however, on re-direct plaintiff testified that Arcos provided him with comfort and advice during the years he lived with him.

Plaintiff testified that he considered himself an adult and that he worked for a living. He was employed by Artistic Fences and worked there for at least three years prior to the July 2003 accident, earning as much as $1000 to $1200 per week. In May 2002, plaintiff left his mother's residence and moved in with his girlfriend and her family at 712 Canton Street, Elizabeth. During this period, plaintiff fathered a son and provided financial support to his girlfriend and child. Also in May 2003, plaintiff bought a Ford pickup truck from Arcos. When plaintiff registered the truck, he used the 712 Canton Street address; however, in attempting to insure the vehicle in June, he furnished the South Second Street address.*fn4


NJIIC argues that the judge misapplied the facts adduced at trial to the law governing the payment of PIP benefits. In essence, NJIIC contends that plaintiff was not a named insured on the policy, or a member of Arcos's "family" as that statutory term has been construed by caselaw.

N.J.S.A. 39:6A-4 provides in pertinent part that

[E]very standard automobile liability insurance policy . . . shall contain personal injury protection benefits for the payment of benefits . . . to the named insured and members of his family residing in his household who sustain bodily injury as a result of an accident while occupying, entering into, alighting from or using an automobile . . . . (Emphasis added).

In order to give the broadest protection to automobile accident victims, we have liberally construed the term "family" as used in the PIP statute to include accident victims that reside in the insured's household but are not related to him by blood or marriage. Brokenbaugh, supra, 158 N.J. Super. at 429; James v. Allstate Ins. Co., 201 N.J. Super. 299 (App. Div. 1985).

In Brokenbaugh, the twenty-year old plaintiff resided with her mother and her mother's boyfriend, Colburn, who was the named insured on the policy. 158 N.J. Super. at 428. Since plaintiff was two years old, and throughout her life thereafter, Colburn had provided "food, shelter and medical care" for her and had acted in the role of a de facto stepfather. Ibid. We noted that the relationship that the plaintiff had with the insured was not affected by the fact that the plaintiff's mother had never married him. Rather, we found that the facts demonstrated that the plaintiff was dependent on Colburn in all respects and viewed him as a father. Id. at 430. We employed a two-part test to determine eligibility for PIP benefits in such circumstances: 1) did the plaintiff live within the insured's domestic circle?; and 2) was the plaintiff economically dependent upon the insured? Ibid. (emphasis added).

Similarly, in James, we recognized that even in the absence of a blood or marital relationship between the insured and the eight-year old son of his live-in girlfriend, there may exist a de facto stepparent/stepchild relationship where "all of the customary attributes and characteristics of the stepparental (sic) relationship are present." 201 N.J. Super. at 304. We held that where there are "reciprocal duties of care and support," evidencing a family relationship, "a de facto stepchild is entitled to the same protection as a de jure one." Id. at 305. Thus, where it can be shown that "there is both an element of financial support and an element of nurturing in the relationship between the child and [the insured], then the child must be regarded as a member of [the insured's] family for PIP coverage purposes." Id. at 306.

To the extent that plaintiff has argued before us that James controls and that he need only show a close familial-type relationship with Arcos and some limited financial support in order to obtain PIP benefits under the policy, we reject that contention. James involved an eight-year old child, not an accident victim who was beyond the legal age of emancipation. Furthermore, even in James, we observed that the facts presented served to distinguish the case from those denying PIP benefits to cohabitating adults because a "dependent child" was involved. James, supra, 201 N.J. Super. at 306; compare Wood v. State Farm Mut. Auto. Ins. Co., 178 N.J. Super. 607, 609 (App. Div. 1981)(noting that adults "who live together, while not married, will not be deemed to be family or relatives for insurance coverage purposes 'no matter how close and intimate that friendship might be'"). Therefore, in order to qualify for PIP benefits under Arcos's NJIIC policy, plaintiff needed to demonstrate that he lived "within the domestic circle of [Arcos], and [was] economically dependent on" him. Brokenbaugh, supra, 158 N.J. Super. at 430.

We take no issue with the trial judge's findings and conclusions that support plaintiff's satisfaction of the first part of the test. Although there was some contradictory testimony regarding where plaintiff resided at the time of the accident, we defer to the judge's factual determination that as of the date of the accident, plaintiff was residing "with his mother, sisters, and Arcos at 810 Canton Street." Rova Farms Resort, supra, 65 N.J. at 483-84. However, we conclude that plaintiff failed to establish that he was "economically dependent" on Arcos at the time of the accident, and therefore, to the extent the judge determined otherwise, she erred as a matter of law.

Initially, we note that the judge concluded there "was no evidence in the record to support" NJIIC's argument that plaintiff was emancipated. However, she overlooked the rebuttable presumption of emancipation that attached upon plaintiff reaching his eighteenth birthday in 1999, some four year's before the accident. N.J.S.A. 9:17B-3; see Newburgh v. Arrigo, 88 N.J. 529, 543 (1982)(holding there is a rebuttable presumption of emancipation upon reaching the age of eighteen, though a finding of emancipation is dependent upon the facts of each case). Therefore, the burden was upon plaintiff to demonstrate that at the time of the accident he was an unemancipated adult who was economically dependent upon Arcos. We assume that the judge concluded that plaintiff was not emancipated, though she made no specific findings regarding the statutory presumption.

We do not necessarily suggest that emancipation and financial dependence are mutually exclusive. However, there were numerous facts adduced that demonstrated plaintiff was in fact an emancipated adult who was not economically dependent upon Arcos. First, plaintiff was gainfully employed immediately before the accident and was earning a significant wage as a fencing contractor. Second, he had fathered a child, had moved out of his mother's home and into the home of his mother-in-law, along with his child and the child's mother, and supported them without any financial assistance from Arcos. Third, he continued to reside outside Arcos's domestic unit for more than one year, and only moved back into that home shortly before the accident and after separating from his girlfriend. Fourth, plaintiff purchased a truck from Arcos and attempted to insure the vehicle in his own name. And fifth, plaintiff was financially able to purchase the things he wanted, including, for example, his clothing, and had sufficient funds to socialize with his friends.

Contrary to her assertion that "[t]here was no evidence at trial to support [NJIIC's] argument that [plaintiff] was . . . financially independent," all of the above facts were acknowledged by the trial judge, and in our opinion fully support the conclusion that plaintiff was an emancipated adult child of Pineda who chose to reside in the Arcos domestic unit after living separate and apart for more than a year.

The judge emphasized the fact that Arcos continued to provide the rent, food, and utilities for the entire domestic unit and did not require contribution from plaintiff or the others toward the monthly bills. However, when considered against all the facts we have outlined above, Arcos's voluntary largesse in this regard does not equal evidence upon which to conclude that plaintiff was financially dependent upon him. Notably, plaintiff never claimed that he was financially dependent upon Arcos, answering, "Yes," when asked during cross-examination if he had enough money to support himself.

In short, we conclude that plaintiff failed as a matter of law to satisfy the second prong of the Brokenbaugh test. We therefore reverse the order requiring NJIIC to pay PIP benefits on his behalf. Additionally, although a plaintiff who prevails in a PIP lawsuit is entitled to a discretionary award of counsel fees despite the lack of express authorization for same in Rule 4:42-9, Allstate Ins. Co. v. Sabato, 380 N.J. Super. 463, 473 (App. Div. 2005), as a result of our conclusion, plaintiff has not prevailed in the action and therefore the order awarding him counsel fees is similarly reversed.

Reversed; the matter is remanded to the trial court for the entry of an order dismissing plaintiff's complaint against NJIIC with prejudice.

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