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Zabilowicz v. Kelsey

December 17, 2009

EDWARD ZABILOWICZ, PLAINTIFF-APPELLANT,
v.
ROSLYNE KELSEY, DEFENDANT-RESPONDENT.



On certification to the Superior Court, Appellate Division.

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 plaintiff Edward Zabilowicz, a Pennsylvania resident whose automobile insurance carrier was authorized to do business in New Jersey, is bound by the limitation-on-lawsuit threshold and barred from suing for non-economic injuries caused by another Pennsylvania resident, defendant Roslyne Kelsey, who was not insured by a carrier doing business in New Jersey and therefore was not entitled to New Jersey PIP benefits.

Zabilowicz filed a lawsuit in Atlantic County alleging that on October 18, 2005, Kelsey's automobile struck his Chevy truck from behind while he was stopped in traffic at an intersection in Pleasantville, New Jersey. Zabilowicz alleged that he suffered severe, permanent, and painful bodily injuries. Both Zabilowicz and Kelsey are residents of Pennsylvania and are covered by automobile insurance policies written in that state. Plaintiff is insured by State Farm Mutual Automobile Insurance Company, which is authorized to do business in New Jersey. Kelsey's insurance carrier, Infinity, is not authorized to do business in New Jersey.

Kelsey moved for summary judgment, asserting that Zabilowicz's injuries did not satisfy the limitation-on-lawsuit threshold and therefore he could not collect damages for pain and suffering. Zabilowicz conceded that his injuries would not permit him to sue for non-economic damages if the threshold applied. However, he argued that the threshold can only be invoked by defendants who have been issued insurance policies by companies doing business in New Jersey and are thus entitled to receive PIP benefits. The trial court determined that the limitation-on-lawsuit threshold applied to Zabilowicz by reason of the Deemer Statute, N.J.S.A. 17:28-1.4. Because he did not have a qualifying injury under N.J.S.A. 39:6A-8(a)(identifying six categories of injuries that vault the threshold), the court granted the motion for summary judgment and dismissed Zabilowicz's personal injury action.

The Appellate Division affirmed in an unpublished decision. The Supreme Court granted Zabilowicz's petition for certification. 198 N.J. 474 (2009).

HELD: In this automobile insurance case, under the plain language of N.J.S.A. 39:6A-8(a), the limitation-on-lawsuit threshold can be invoked only by a defendant who is eligible to receive New Jersey PIP benefits. Because the defendant's out-of-state insurance policy does not provide her with this State's PIP benefits, she is subject to suit for non-economic damages without restriction under that statute.

1. Under New Jersey's no-fault insurance system, owners of motor vehicles registered or principally garaged in New Jersey have certain legal obligations. First, they must purchase standard, basic or special insurance coverage for their automobile. Second, every policy must provide personal injury protection (PIP) benefits-the payment of medical expenses to the insured and family household members who suffer bodily injury in an automobile accident. Those medical benefits are paid without regard to who caused the accident ("no-fault insurance"). Third, New Jersey policyholders, in exchange for lower premium payments, have the option of selecting the limitation-on-lawsuit threshold, which restricts their right to sue for "non-economic loss" if they are injured in an accident. Those covered by the threshold may not sue a tortfeasor for non-economic damages unless they suffer a serious or permanent bodily injury, as defined in N.J.S.A. 39:6A-8(a). Under the same provision, a New Jersey policyholder who chooses the threshold may sue for non-economic damages if the tortfeasor is not a participant in this State's no-fault system and therefore is not insured for PIP benefits. (Pp. 1-3)

2. N.J.S.A. 17:28-1.4, the Deemer Statute, and N.J.S.A. 39:6A-8(a) define when the limitation-on-lawsuit threshold shall apply to an out-of-state plaintiff bringing a personal injury action arising from an automobile accident. To interpret these enactments, the Court reads them in context with each other and with the overall legislative scheme governing automobile insurance. The Court presumes that the Legislature intended the outcome dictated by the statutes' clear language. (Pp. 6-8)

3. The Deemer Statute requires that insurers authorized to transact automobile insurance business in New Jersey provide coverage to out-of-state residents consistent with New Jersey law whenever the automobile insured under the policy is used or operated in this State. The required coverage includes liability insurance, uninsured motorist insurance, and personal injury protection benefits. In addition, the Deemer Statute provides that the named insured and the immediate family members "shall be subject to the tort option specified in subsection a. of [N.J.S.A. 39:6A-8]." In short, the Deemer Statute furnishes the covered out-of-state driver with New Jersey's statutory no-fault PIP and other benefits and, in exchange, deems that driver to have selected the limitation-on-lawsuit option of N.J.S.A. 39:6A-8(a). Here, Zabilowicz is insured by a carrier transacting automobile insurance in New Jersey and therefore is bound by the Deemer Statute. Because Kelsey is not insured by a carrier doing business in this State, she does not fall within the sweep of the Deemer Statute and is not covered by the no-fault PIP provisions. The question before the Court in this case is whether an out-of-state defendant not eligible for New Jersey PIP benefits can invoke the limitation-on-lawsuit threshold against a plaintiff covered by the Deemer Statute. (Pp. 8-11)

4. N.J.S.A. 39:6A-8(a) states that a defendant who wishes to invoke the limitation-on-lawsuit threshold against a plaintiff must demonstrate eligibility for no-fault PIP benefits under N.J.S.A. 39:6A-3.1, -3.3, or -3.4. Unless the defendant meets this burden, the remainder of the statute does not apply, including the requirement that a plaintiff prove that he or she sustained one of the six qualifying injuries. One of the rationales for the limitation-on-lawsuit threshold is to offset the costs to insurers of a system that mandates the prompt payment of medical expenses resulting from automobile accidents. An insurer of a defendant not participating in New Jersey's no-fault system is not subject to the monetary quid pro quo that justifies making the threshold available to a PIP defendant. For that reason, a defendant ineligible for PIP benefits cannot assert the threshold as a defense. (Pp. 11-13)

5. The plain language of the statutes makes clear that an out-of-state defendant who is not eligible to receive New Jersey PIP benefits may be sued for pain and suffering damages without regard to the threshold. If the Legislature, through the Deemer Statute, intended to restrict Zabilowicz's right to sue for pain and suffering caused by the negligence of an out-of-state driver who is not part of New Jersey's PIP system, it could have drafted the statute to achieve that result. Nothing in the legislative history conflicts with this finding. The quid pro quo presented to New Jersey drivers under our no-fault system is no different for out-of-state residents insured by carriers doing business in this State. Under the Deemer Statute, in exchange for prompt payment of medical bills, the out-of-state insured gives up the unlimited right to sue for pain and suffering, provided that the defendant is eligible to receive New Jersey PIP benefits. A defendant-such as the one here-who is not participating in New Jersey's no-fault system does not receive the benefit of invoking the N.J.S.A. 39:6A-8(a) limitation-on-lawsuit as a defense. (Pp. 13-16)

6. A defendant who causes an automobile accident and is not eligible for PIP benefits cannot bind a plaintiff to the limitation-on-lawsuit threshold set forth in N.J.S.A. 39:6A-8(a). Under the Deemer Statute, Zabilowicz could have been subject to the limitation-on-lawsuit threshold because he had no qualifying injury under N.J.S.A. 39:6A-8(a). In this case, however, he is not statutorily barred from recovering pain and suffering damages because Kelsey is ineligible to collect New Jersey PIP benefits. (Pp. 16-17)

The grant of summary judgment in Kelsey's favor is REVERSED, and the matter is REMANDED to the trial court for proceedings consistent with this opinion.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, WALLACE, RIVERA-SOTO and HOENS join in JUSTICE ALBIN's opinion. ...


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