The Appellate Division has ruled that a multi-passenger van owned by a church and utilized to transport members to and from services is not an “automobile” for the purpose of recovering PIP benefits.
In this matter, Jose Perez was involved in an accident on April 3, 2009, while driving a fifteen person van owned by Iglesia Pentecostal Roca de Salvacion. At the time of the accident, Perez was driving member of his family and several other church members to services. Perez has been driving the van for the church for the past ten years. The van was insured under a commercial policy issued by Farmers Mutual. This policy did not provide PIP coverage. Perez had a personal automobile policy issued by Encompass Property and Casualty Insurance Company. This policy provided PIP coverage, but was only applicable to “bodily injury…caused by an accident arising out of the ownership, maintenance or use…of an auto as an automobile.”
As a result of the accident, the Perez family sought PIP benefits from Farmers and Encompass. Both insurers disclaimed coverage for PIP benefits. The Perezes brought a declaratory judgment action for a determination that the Farmers and Encompass policies both provided coverage for PIP benefits for the injuries sustained. The trial court determined that the van was an “automobile” under N.J.S.A. 39:6A-2 and Encompass was required to provide PIP benefits. The court further found that as Farmers issued a commercial policy, they were not required to provide PIP benefits.
On appeal, the court was required to determine whether the church van was an “automobile” under the No Fault Law. The court noted that if the van was determined to be an automobile under the law, Encompass and Farmers would be required to pay PIP benefits to the Perezes.
The court noted that N.J.S.A. 39:6A-4 provides that “every standard automobile liability insurance policy…shall contain [PIP] benefits…to the named insured and members of his family residing in his household who sustain bodily injury as a result of an accident while occupying…or using an automobile,…and to other persons sustaining bodily injury while occupying…or using the automobile of the named insured, with permission of the named insured.” Additionally, the law provides that if a policy does not conform to these requirements, it will be “deemed to be conformed with this statute.”
The definition of “automobile” under New Jersey law sets forth two categories of motor vehicles for which, subject to certain exclusions, coverage for PIP benefits are required. These categories are: (1) private passenger automobiles or station wagon type that is owned or hired and is neither used as a public or livery conveyance for passengers or rented to others with a driver; and (2) various other types of motor vehicles, including vans, owned by an individual or by a husband and wife who are residents of the same household and not regularly used in the occupation, profession or business of the insured.
In determining whether the van was to be considered an automobile, the court noted a prior decision finding that a ‘minivan” was deemed to be an automobile for the purposes of determining whether PIP benefits were available. In that case, the court found that the “minivan” was a “station wagon type” vehicle under the law, and as such the insurer owed PIP benefits.
The Appellate Division found that the church van was completely different as it had five rows of seats and was designed to carry fifteen passengers. It further noted that this type of van was more commonly used by hotels and business to transport customers. Accordingly, the court determined that the church van was not a private passenger automobile or “station wagon type” vehicle.
As such the court looked to the second definition of “automobile” under the No Fault Law and found that the vehicle was a “van”. Next, the court was required to determine if the van was “owned by an individual or by a husband and wife who are residents of the same household.” As the van was owned by the church and not the Perzes, the court found that the van did not satisfy this element of the definition of “automobile.” Accordingly, the court found that the Farmers and Encompass policies policy did not owe PIP benefits as the church van is not an “automobile” under the No Fault Law.
— Erik Anderson, Esq.
Reardon Anderson represents the interests of businesses, insurance companies and individuals throughout New Jersey and the metropolitan New York City area. Please visit our website at http://reardonanderson.com to learn more about our firm.