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Jose C. Perez, Marta A. Perez, and Sarah E. Perez v. Farmers Mutual Fire Insurance Company of Salem County

January 11, 2011

JOSE C. PEREZ, MARTA A. PEREZ, AND SARAH E. PEREZ,
A MINOR BY HER PARENTS/GUARDIANS AD LITEM JOSE C. PEREZ AND MARTA A. PEREZ, PLAINTIFFS-RESPONDENTS,
v.
FARMERS MUTUAL FIRE INSURANCE COMPANY OF SALEM COUNTY, DEFENDANT-RESPONDENT, AND ENCOMPASS PROPERTY & CASUALTY INSURANCE CO. OF NEW JERSEY, DEFENDANT-APPELLANT.



On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-4333-09.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued October 26, 2010 - Decided

Before Judges Skillman, Yannotti and Espinosa.

The opinion of the court was delivered by SKILLMAN, P.J.A.D.

The issue presented by this appeal is whether a fifteen-passenger van owned by a church, which it used to transport members of the congregation to church services, falls within the definition of an "automobile" contained in N.J.S.A. 39:6A-2(a), thus requiring the van's insurer to provide coverage for personal injury protection (PIP) benefits. We conclude that such a vehicle does not constitute an "automobile" under this definition.

Iglesia Pentecostal Roca de Salvacion, Inc., a church located in Paterson, was the owner of the van. The church insured the van under a commercial automobile insurance policy issued by defendant Farmers Mutual Fire Insurance Company of Salem County (Farmers). This policy did not provide PIP coverage for the van.

The church used the van to transport its members to services. Plaintiff Jose Perez, a member of the church, drove the van on a regular basis for this purpose over a period of ten years.

Perez had a personal automobile insurance policy for his own car, which provided coverage for PIP benefits, issued by defendant Encompass Property and Casualty Insurance Company of New Jersey (Encompass). However, this coverage was only applicable to "bodily injury . . . caused by an accident arising out of the ownership, maintenance or use . . . of an auto as an automobile."

On April 3, 2009, Perez was involved in an accident with another vehicle while driving his wife Marta, his daughter Sarah, and several other church members to services in the van. The Perezes all suffered serious injuries in the accident, for which they sought PIP benefits from Farmers and Encompass. Although Encompass paid the Perezes $10,000 in "Med-Pay" benefits, both insurers disclaimed coverage for PIP benefits.

The Perezes then brought this declaratory judgment action for a determination that the Farmers and Encompass policies both provide coverage for PIP benefits for the injuries they suffered in the accident. The case was brought before the trial court by an order to show cause.

The court determined on the return date that the church van was an "automobile" within the intent of N.J.S.A. 39:6A-2.

However, the court concluded that only Encompass was liable for the payment of PIP benefits to the Perezes, apparently because the policy Farmers issued to the church was a commercial policy that did not provide PIP coverage. Consequently, ...


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