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Livsey v. Mercury Insurance Group

February 19, 2009

CAMIE LIVSEY, PLAINTIFF-RESPONDENT,
v.
MERCURY INSURANCE GROUP, DEFENDANT-APPELLANT.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 396 N.J. Super. 373 (2007).

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

The Court considers whether Uninsured Motorist (UM) insurance coverage extends to a victim of a random drive-by shooting.

On February 21, 2005, plaintiff Camie Livsey made a purchase at a grocery store in Irvington and was returning to her car when she was shot. Two witnesses stated that they saw an older model Toyota fleeing the scene. It was never determined who fired the shot or whether it came from the Toyota. Livsey filed a UM claim with her own automobile insurance carrier, Mercury Insurance Group. Mercury asserted that there was no accident that involved an uninsured motor vehicle and denied the claim.

Livsey filed a complaint against Mercury, seeking a declaration that UM coverage applied to her injury. She asserted that it was within her reasonable expectations that a drive-by shooting could be a natural and probable incident of the use of an automobile by an uninsured motorist, especially in a high crime area, and that the term "drive-by shooting" was coined to refer to shooters firing at members of the public from motor vehicles, implying a nexus between the vehicle and the shooting.

The trial court granted a motion for summary judgment by Mercury and dismissed the complaint after determining that UM coverage does not extend to victims of random drive-by shootings. The court explained that the UM statute, N.J.S.A. 17:28-1.1(a)(2), requires proof of an accident and that the accident arose out of the ownership, maintenance, operation or use of an uninsured motor vehicle. In this case, the court found that there was not a substantial connection between the use of an uninsured vehicle and the injury suffered by Livsey.

Relying on cases extending personal injury protection (PIP) coverage to drive-by shootings, the Appellate Division reversed and remanded the matter for trial. 396 N.J. Super. 373 (2007). The panel concluded that there was no basis for treating UM coverage differently from PIP coverage in deciding whether there was a sufficient nexus between the use of an uninsured automobile and the injury.

The Supreme Court granted Mercury's petition for certification. 194 N.J. 267 (2008).

HELD: There are fundamental differences between the personal injury protection (PIP) statute and the uninsured motorist (UM) statute sufficient to bar the importation of the extent of PIP coverage in the context of a drive-by shooting to a UM coverage question. Also, because the insured's injuries from the drive-by shooting were not causally connected to the insured's use of her motor vehicle, the Court reverses the judgment of the Appellate Division and reinstates the trial court's judgment in favor of the insurer.

1. The Court's interpretation of N.J.S.A. 17:28-1.1(a)(2) is guided by core principles of statutory construction. These core principles include that a court should not resort to extrinsic interpretative aids if the statutory language is clear and unambiguous and susceptible to only one interpretation. Words and phrases must be given their generally accepted meaning. If there is ambiguity in the statutory language that leads to more than one plausible interpretation, or if the overall statutory scheme is at odds with the plain language of the statute, the Court may resort to extrinsic evidence, including legislative history, committee reports, and contemporaneous construction. (Pp. 9-11).

2. On its face, N.J.S.A. 17:28-1.1(a)(2) appears clear. It states, in relevant part, that "no motor vehicle liability policy or renewal . . . insuring against loss resulting from liability imposed by law for bodily injury or death, sustained by any person arising out of the ownership, maintenance or use of a motor vehicle, shall be issued" unless it includes coverage for injuries to the insured that were "caused by accident and arising out of the ownership, maintenance, operation or use of [an] uninsured or hit and run motor vehicle . . . ." Thus, an insured who seeks UM benefits must satisfy a two-pronged test: first, the insured must demonstrate that his or her injuries were caused by "an accident"; and, second, the insured must prove that the accident arose from the ownership, maintenance, operation or use of an uninsured vehicle. (Pp. 11-12).

3. With regard to the first prong of the test, New Jersey courts have consistently held that the determination whether an incident qualifies as an "accident" under the UM statute is gauged from the perspective of the insured/victim, not the tortfeasor. Here, there can be little doubt that Livsey's injury qualifies as an "accident" under the UM statute. However, with regard to the second prong of the test-whether there was a sufficient nexus between the accident and the ownership, maintenance, operation or use of an uninsured vehicle-the Court disagrees with the Appellate Division. In order to trigger UM coverage under the statute, the accident must be one "arising out of" the ownership, maintenance, operation or use of an uninsured motor vehicle. That was not the case here. (Pp. 12-13).

4. Although the Appellate Division relied on prior cases that interpreted the PIP statute as providing coverage for drive-by shootings, the PIP and UM statutes, by their own clear terms, are fundamentally different. The UM statute requires a two-pronged test for coverage-an accident and a causal link between the accident and the uninsured vehicle. On the other hand, the PIP statute, N.J.S.A. 39:6A-4, expressly permits recovery for injuries "caused by . . . an object propelled by or from an automobile." That language appears nowhere in the UM statute. Therefore, while the PIP statute's language specifically encompasses a projectile discharged in a drive-by shooting, the reach of the UM statute is not nearly as broad. Both the UM statute, and the cases interpreting it, hold that there must be a "substantial nexus"-that is, a substantial connection or link-between the injury and the use of the vehicle in order for there to arise the obligation to provide coverage. (Pp. 13-15).

5. Moreover, the different purposes of the PIP and UM statutes are designed to serve different results. In enacting the PIP statute, the Legislature's intent was to ensure the broadest coverage possible so long as an automobile was involved. In contrast, the UM statute has two purposes: to relieve the financial burden on the Unsatisfied Claim and Judgment Fund and to protect insured drivers from uninsured financially irresponsible drivers. It ill fits to extrapolate coverage concepts from the broad coverage afforded by the PIP statute to the more tailored coverage provided under the UM statute. The limited purpose of UM coverage-to provide insurance benefits to a covered person when the automobile that causes the harm is uninsured-drives the Court's conclusion that, in these circumstances, Mercury cannot be called on to respond with UM coverage to Livsey's benefit. (Pp. 15-18).

The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Law Division for reinstatement of the order granting summary judgment to Mercury and dismissing the complaint with prejudice.

JUSTICE WALLACE, joined by JUSTICES LONG and ALBIN, disagrees with the majority's determination that there was an insufficient nexus between the accident and the operation of an uninsured motor vehicle to support UM benefits in this case. Applying the same reasoning that the Court used in an earlier PIP case involving a drive-by shooting, Justice Wallace explains that the uninsured vehicle provided the opportunity for the assault and the assault would not likely have occurred otherwise. He would have affirmed the judgment of the Appellate Division.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA and HOENS join in JUSTICE RIVERASOTO's opinion. JUSTICE WALLACE filed a separate, dissenting opinion in which JUSTICES LONG and ALBIN join.

The opinion of the court was delivered by: Justice Rivera-soto

Argued September 9, 2008

This appeal presents a discrete issue involving the interplay, if any, between uninsured motorist (UM) coverage and personal injury protection (PIP) coverage in the context of an insured injured in a drive-by shooting, but who at the time was not operating her own vehicle. The insurance carrier denied the insured's UM claim, and the insured filed a declaratory judgment action. The trial court concluded that, unlike PIP coverage, UM coverage does not extend to victims of random drive-by shootings, reasoning that there was an insufficient relationship between the claimed use of an uninsured vehicle and the injury she suffered. The Appellate Division reversed, concluding that it "perceive[d] no principled basis in these circumstances, a random, drive-by shooting, for treating UM coverage differently from PIP coverage on the central question of whether there was a sufficient nexus between the use of the automobile and the injury." Livsey v. Mercury Ins. Group, 396 N.J. Super. 373, 377-78 (App. Div. 2007), certif. granted, 194 N.J. 267 (2008).

There are fundamental differences between the PIP statute and the UM statute sufficient to bar the importation of the extent of PIP coverage in the context of a drive-by shooting to a UM coverage question. Also, because the insured's injuries from the drive-by shooting were not causally connected to the insured's use of her motor vehicle, we reverse the ...


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