On appeal from the Superior Court, Appellate Division.
The opinion of the court was delivered by: Judge Stern
(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).
Denise A. Perrelli v. Bridget Pastorelle and Paul Pastorelle (A-22-10)
JUDGE STERN (temporarily assigned), writing for a unanimous Court.
In this appeal, the Court considers whether N.J.S.A. 39:6A-4.5(a) bars a person who was injured while a passenger in her own uninsured automobile from pursuing a personal injury action to recover economic and non-economic damages for those injuries.
In 2004, plaintiff Denise Perrelli insured her vehicle with New Jersey Manufacturers (NJM), understanding her insurance would be cancelled if she stopped paying premiums. While insured by NJM, Perrelli moved twice. She notified NJM of her first new address, but she could not recall if she notified the post office or NJM of her last address change or whether she received any premium notices there. Perrelli believed the last time she sent NJM a premium check was in 2004 or 2005, and she could not recall sending checks to NJM while living at the third address, although she also believed she still had coverage on the day of the accident. On August 4, 2006, NJM cancelled her policy for non-payment of premium. On August 24, 2006, Perrelli and Geovanni Velverde were driving in Perrelli's uninsured vehicle. While Velverde was driving and Perrelli was a passenger, they were involved in an automobile accident with defendants Bridget and Paul Pastorelle. Velverde was killed and Perrelli was seriously injured. Perrelli filed her complaint alleging that her injuries were caused by defendants' negligence. Defendants filed an answer and moved for summary judgment, asserting that N.J.S.A. 39:6A-4.5(a) barred the action. The trial court denied defendants' motion, and the Appellate Division denied leave to appeal. The Supreme Court granted defendants' motion for leave to appeal. 204 N.J. 33 (2010).
HELD: N.J.S.A. 39:6A-4.5(a) bars a person who was injured while a passenger in her own uninsured automobile from pursuing a personal injury action to recover economic and non-economic damages for those injuries.
1. N.J.S.A. 39:6A-4.5(a) states that a person who fails to maintain required automobile insurance cannot pursue an action to recover damages resulting from an accident "while operating" an uninsured vehicle. The issue is whether that phrase requires plaintiff herself to have been driving her uninsured automobile at the time of the accident. The term "operating" is not defined, but N.J.S.A. 39:1-1 defines "operator" as "a person who is in actual physical control of a vehicle." (pp. 4-7)
2. Following a motion for summary judgment, the Court applies the same standard of review that governs trial courts: Summary judgment should be granted if there is no genuine issue of material fact challenged and the moving party is entitled to judgment as a matter of law. (pp. 7-8)
3. In interpreting a statute, courts should enforce clear language according to its terms, but if a literal interpretation would create an absurd result, inconsistent with the statute's purpose, the spirit of the law should control. (pp. 8-9)
4. The "No Fault Act," N.J.S.A. 39:6A-1 to -35, adopted in 1972, requires all motor vehicle owners to maintain minimum amounts of auto insurance and requires every policy to include personal injury protection (PIP) benefits, which guarantee medical coverage to the insured. The statute was designed to provide prompt benefits to victims, reduce insurance costs, make coverage readily available, and streamline judicial procedures. As a trade-off, the No Fault Act placed several restrictions on the right to sue. The Legislature continued to adopt legislation to further those goals. In 1985, N.J.S.A. 39:6A-4.5 was adopted to restrict an uninsured driver's ability to sue third parties for non-economic damages. As a result of 1997 amendments, N.J.S.A. 39:6A-4.5(a) bars three groups of people from recovering for personal injuries, including vehicle owners who fail to maintain PIP coverage who are injured when operating an uninsured vehicle. The Legislature wanted to ensure that an injured, uninsured driver does not draw on the pool of accident-victim insurance funds to which he or she did not contribute, and to provide an incentive to comply with compulsory insurance laws. (pp. 10-13)
5. Given N.J.S.A. 39:6A-4.5(a)'s purpose, there is no doubt that the Legislature wanted to assure that all automobiles were covered by compulsory insurance by precluding those who do not have required coverage from recovering from others merely by having someone else drive their car. Because statutes should be read to give sense to the legislation as a whole, it is helpful to review other sections of title 39 on compulsory automobile insurance.
N.J.S.A. 39:6A-7(b)(1) precludes collection of PIP benefits by a person who owned a vehicle "that was being operated without" PIP coverage. That statute has been held to preclude benefits even when the accident occurred in someone else's insured vehicle. Another law, N.J.S.A. 39:6B-2, provides that a motor vehicle owner "who operates or causes to be operated a motor vehicle" without liability insurance is guilty of an offense. (pp. 13-15)
6. In Dziuba v. Fletcher, 382 N.J. Super. 73 (App. Div. 2005), aff'd o.b., 188 N.J. 339 (2006), the plaintiffs were passengers in the defendants' insured automobile when an accident occurred. The Appellate Division held that the plaintiffs could not recover PIP benefits pursuant to N.J.S.A. 39:6A-7(b)(1) because they regularly drove their own uninsured vehicles around the time of the accident, but they were not barred by N.J.S.A. 39:6A-4.5(a) from making a claim for economic and non-economic losses because "the uninsured vehicle must be the vehicle involved in the accident to preclude its owner" from recovery. It was the fact that the uninsured vehicle was not involved in the accident, and not whether the culpably uninsured person was "operating" it at the time of the accident, that led to the Appellate Division's conclusion which the Court affirmed. (pp. 15-18)
7. In State v. Schumm, 146 N.J. Super. 30 (App. Div. 1977), aff'd o.b., 75 N.J. 199 (1978), the defendant-passenger was convicted of violating N.J.S.A. 39:6B-2's compulsory insurance requirement, even though he was not an "operator" as defined by N.J.S.A. 39:1-1, becausehe "caused" the vehicle "to be operated" when he knew it was uninsured. While N.J.S.A. 39:6B-2 uses "causes to be operated" language, the case underscores the legislative purpose of chapter 6. The panel noted -- and the Court agreed -- that the purpose is to keep uninsured vehicles off the road to protect the public and to penalize those responsible by denying them statutory protection. In Caviglia v. Royal Tours of America, 178 N.J. 460 (2004), the Court emphasized the Legislature's intent to ensure that injured, uninsured drivers do not collect from accident-victim insurance funds to which they did not contribute. Thus, N.J.S.A. 39:6A-4.5(a) requires that a vehicle owner comply with compulsory insurance laws or lose the right to sue for damages. The incentive to comply is just as powerful if the culpably uninsured is the driver or passenger in his own uninsured vehicle. (pp. 18-20)
8. A literal reading of "while operating" as used in N.J.S.A. 39:6A-4.5(a) to only bar recovery if the individual was driving would be contrary to the public policy as described in Caviglia and allow the culpably uninsured person to violate the law and not suffer its consequences. The Court holds that the preclusion of recovery contained in N.J.S.A. 39:6A-4.5(a) applies to the owner of an uninsured vehicle whether injured as a driver or passenger. (pp. 21-22)
The denial of summary judgment is REVERSED and the matter is REMANDED to the Law Division for entry of judgment dismissing the complaint.
CHIEF JUSTICE RABNER and JUSTICES LONG, LaVECCHIA, ALBIN, RIVERA-SOTO, and HOENS join in JUDGE STERN's opinion.
JUDGE STERN (temporarily assigned) delivered the opinion of the Court.
We granted leave to appeal to decide whether N.J.S.A. 39:6A-4.5(a) bars a person who was injured while a passenger in her own uninsured automobile from pursuing a personal injury action to recover economic and non-economic damages for those injuries. We hold that it does and that the complaint must be dismissed.
The following undisputed facts were developed in the defendants' motion for summary judgment.
On August 24, 2006, plaintiff Denise Perrelli (plaintiff or Perrelli) and Geovanni Velverde*fn1 were driving south on the Garden State Parkway, in Perrelli's uninsured vehicle. They were en route to Seaside Heights. When they left her home in Paramus, Perrelli was driving the vehicle, but after stopping at a rest area, Velverde took over the driving. Upon leaving the rest area, Perrelli's vehicle was involved in an accident with a car owned and driven, respectively, by defendants Bridget and Paul Pastorelle (defendants). As a result of the accident, ...