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Finegan v. Dickenson

United States District Court, D. New Jersey, Camden Vicinage

August 10, 2017

ANNE M. FINEGAN, Plaintiff,
v.
SUSAN M. DICKENSON, et al., Defendants.

          ORDER [DOC. NO. 7]

          JOEL SCHNEIDER, UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on the “Motion to Apply the Verbal Threshold Pursuant to the Deemer Statute” filed by defendant Susan M. Dickenson. [Doc. No. 7]. The Court received plaintiff's opposition [Doc. Nos. 11, 12] and Dickenson's reply [Doc. No. 16]. The Court exercises its discretion not to hold oral argument. Fed.R.Civ.P. 78; L. Civ. R. 78.1. For the reasons to be discussed, Dickenson's motion is granted.

         Background

         On August 6, 2016, plaintiff (Pennsylvania resident) was a passenger in a vehicle driven by Kevin Connor (Pennsylvania resident) when the vehicle was involved in a motor vehicle accident in New Jersey driven by defendant Susan M. Dickenson. The Connor vehicle was registered to Connor's parents and insured by Chubb (New Jersey authorized insurer). Plaintiff is a named driver on her parents' insurance policy from Cincinnati (New Jersey authorized insurer) with limited tort option under PA law. Defendant is a New Jersey resident insured by a New Jersey insurer.

         Plaintiff alleges that defendant was distracted by the use of her cell phone, causing defendant's vehicle to cross the center line, resulting in a head-on collision with the Connor vehicle. Following the accident, Chubb (Connor's insurer) denied PIP coverage to plaintiff stating: “Under an automobile policy issued in the State of Pennsylvania, Priority of Coverage is the injured person's own automobile insurance policy, a household automobile insurance policy and then possibly the involved vehicle's policy.” Ex. E to Pl.'s Opp'n [Doc. No. 11-1]. Plaintiff subsequently filed a claim with her parents' Cincinnati policy which paid $10, 000 in PIP medical bills, exhausting her First Party Benefits under the Cincinnati policy. Ex. G to Pl.'s Opp'n [Doc. No. 11-3].

         On December 27, 2016, plaintiff filed this lawsuit. Defendant filed her answer and the present motion on February 22, 2017. [Doc. Nos. 6, 7]. The Court granted motions to intervene filed by Chubb and Cincinnati on April 7, 2017. [Doc. No. 18]. Pursuant to 28 U.S.C. § 636(c), the parties consented to the jurisdiction of this Court to hear the case. [Doc. No. 21].

         Discussion

         New Jersey's “Deemer” Statute (N.J.S.A. 17:28-1.4) addresses the situation when non-resident motorists are involved in accidents in New Jersey. The statute requires that if a nonresident's insurer is authorized to do business in New Jersey, the insurer must provide personal insurance protection (“PIP”) benefits to the non-resident. New Jersey's automobile insurance scheme allows prospective insureds to choose between two coverage options. “The first type of coverage, outlined in section 39:6A-8(a), is known as ‘verbal threshold' coverage, and precludes tort recovery for non-economic injuries except those that fall into six specific categories.”[1] Staub v. United States, C.A. No. 08-2061(JBS/KMW), 2010 WL 743926, at *2 (D.N.J. Mar. 3, 2010). The second type of coverage (Section 39:6A-8(b)), allows for unlimited recovery for non-economic injuries in exchange for higher premiums. Id. As noted, the “Deemer” Statute requires New Jersey authorized insurers (licensed in New Jersey) to provide non-resident insureds, among other things, PIP coverage. Id. at *3. Importantly, if PIP coverage is provided the verbal threshold provision of N.J.S.A. 39:6A-8(a) is deemed to apply. Nortesano v. Torres-Romero, 2006 WL 3475201 ( N.J.Super. App. Div. Dec. 4, 2006); Dyszel v. Marks, 6 F.3d 116, 120 (3d Cir. 1993). The parties dispute whether the verbal threshold applies to plaintiff.

         In determining whether the verbal threshold applies to nonresident drivers, New Jersey courts have created a two-prong test. Staub, at *3. The first prong requires an examination of whether the defendant is the owner or operator of an “automobile” and is entitled to receive no-fault PIP benefits under section 39:6A-4. The second prong focuses on whether the plaintiff is a person subject to the verbal threshold statute and is required to maintain PIP coverage, or has a right to receive PIP benefits under N.J.S.A. 39:6A-4. Id. (citing Beaugard v. Johnson, 281 N.J.Super. 162, 167 (App. Div. 1995)). In the present matter the first part of the two-prong test is easily satisfied. Defendant is the owner/operator of her car and is entitled to receive PIP benefits as a New Jersey resident. The crux of the present dispute is whether plaintiff's characteristics satisfy the second prong.

         1. Plaintiff is Subject to the Verbal Threshold by Operation of Law

         The parties concede the Connor vehicle is the vehicle pertinent to the present analysis as it is subject to the “Deemer” Statute by being used in New Jersey and insured by a New Jersey authorized insurer-Chubb. See Pl.'s Opp'n at 6 (“Defendant argues and Plaintiff agrees that Deemer does apply to the Connor vehicle.”). Plaintiff argues, however, that the Deemer statute does not apply to her. Defendant disagrees. The Court sides with defendant. Def.'s Reply at 1 [Doc. No. 16]. Pursuant to N.J.S.A. 39:6A-8(a), plaintiff is subject to the verbal threshold because she is entitled to receive PIP benefits under N.J.S.A. 39:6A-4 by operation of law. The relevant portion of N.J.S.A. 39:6A-8(a) provides: “Every owner, registrant, operator or occupant of an automobile to which [PIP coverage, Section 39:6A-4] . . . regardless of fault, applies, and every person or organization legally responsible for his acts or omissions, is hereby exempted from tort liability for noneconomic loss to a person who . . . is a person who has a right to receive benefits under [PIP coverage, Section 39:6A-4]. The decision in Koff v. Carrubba, 290 N.J.Super. 544, 547 (App. Div. 1996) is instructive:

A person who is neither a named insured under a New Jersey automobile liability policy nor a family member residing with such a named insured is entitled to receive PIP benefits only for an injury . . . which he or she has suffered while occupying, entering into, alighting from or using a named insured's automobile with the named insured's permission . . . .

Id. at 185.

         As noted, the parties concede that the Connor vehicle is subject to the “Deemer” Statute. Accordingly, plaintiff's status as a passenger or occupant in the Connor vehicle demonstrates that she was “occupying . . . a named insured's automobile with the named insured's permission.” Therefore, by virtue of her occupancy in the Connor vehicle, plaintiff is deemed to have the right to receive PIP benefits pursuant to the provisions of the Deemer Statute and N.J.S.A. 39:6A-4. Thus, plaintiff's claim for non-economic damages is subject to the verbal threshold. This is consistent with the holding in Beaugard, 281 N.J.Super. at 171, which held: ...


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