NJ Supreme Court Holds that Passenger in Own Uninsured Vehicle Cannot Pursue Personal Injury Lawsuit

June 22, 2011

On June 1, 2011, the NJ Supreme Court held that 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 noneconomic damages for those injuries. 

On August 24, 2006, the plaintiff, Denise Perrelli and Geovanni Valverde were driving south on the Garden State Parkway in Perrelli’s uninsured vehicle.  When they left the plaintiff’s home, Perrelli was driving the vehicle but after stopping at a rest area, Valverde took over the driving.  Upon leaving the rest area, the plaintiff’s vehicle was involved in an accident with a car driven by Paul Pastorelle.  As a result of the accident, Valverde was killed and Perrelli sustained serious physical and psychological injuries.

Two years before the accident, the plaintiff had purchased a 1992 Oldsmobile Cutlass and insured it through New Jersey Manufacturers (NJM).  When the plaintiff was first insured by NJM, she lived in Paramus where she received her premium notices.  Thereafter she moved twice.  She could not recall whether she received any premium notices at her last address, but believed her insurance was in effect on the day of the accident.  Perrelli’s coverage remained in effect until August 4, 2006 when NJM canceled her policy for nonpayment of premium.

On August 22, 2008, the plaintiff filed her complaint alleging her injuries were caused by the defendant’s negligence.  The defendant filed an answer and subsequently moved for summary judgment asserting that N.J.S.A. 39:6A-4.5(a) barred the action.  The trial court denied the defendant’s motion and the Appellate Division denied defendant’s motion for leave to appeal.  The Supreme Court granted defendant’s motion for leave to appeal.

N.J.S.A. 39:6A-4.5(a) states, “any person who, at the time of an automobile accident resulting in injuries to that person, is required but fails to maintain medical expense benefits coverage…(mandated by N.J.S.A. 39:6A-4 or N.J.S.A. 39:6A-3.1) shall have no cause of action for recovery of economic or non-economic loss sustained as a result of an accident while operating an uninsured automobile.”

The issue presented to the court was whether the phrase “while operating” required the plaintiff herself to have actually been driving her uninsured automobile at the time of the accident.  The defendant asserted that it was irrelevant whether the plaintiff was physically driving the car.  “The same legislative purpose of deterring the operation of uninsured motor vehicles, and precluding injured persons who caused the operation of an uninsured motor vehicle and did not contribute to the insurance pool from collecting it, apply equally whether the person seeking recovery for their injury is the driver of his or her own uninsured vehicle or a passenger in it.  Each involves an equal attempt to drain from the insurance pool without contributing to it, and each involves an equal violation of the law.”

The plaintiff argued that the statute, by its “clear and unambiguous meaning”, precludes recovery but only if the plaintiff was physically “operating the vehicle.”  The plaintiff’s noted that the statute had been amended on three occasions and the Legislature never added language to the effect of one who “operates or causes to be operated” an uninsured vehicle.  Lastly, the plaintiff argued that the Statute makes clear the uninsured person must be “culpably” or “knowingly” uninsured and in this case because the plaintiff believed she was insured, she could not be culpably uninsured.

The Supreme Court noted that in interpreting the Statute, if the language is clear on its face, courts should enforce the statute according to its terms.  However, where a literal interpretation would create a manifestly absurd result, the spirit of the law should control.  The Court noted that “to reduce the costs of automobile insurance, to protect victims of automobile accidents and reduce public expenditures when accidents are caused by judgment-proof tortfeasors, New Jersey requires all owners of motor vehicles registered or principally garaged in (the State)…to maintain minimum amounts of…insurance coverage for bodily injury, death and property damage caused by their vehicles.” N.J.S.A. 39:6A-4.5, adopted in 1985, was designed to further the costs and judicial objectives of the No Fault Act.  The Legislature wanted to ensure that an injured, uninsured driver did not draw on the pool of accident victim insurance funds to which he (or she) did not contribute.  The Court found that there was no doubt that the Legislature wanted to assure that all automobiles were covered by compulsory insurance by precluding those who do not have the required coverage from recovering from others merely by having someone else drive their vehicle.

The Court then held “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.”


June 13, 2011

As previously reported, the Appellate Division ruled that a drunk driver who is involved in an accident can sue a tavern, which allegedly over-served him, for personal injuries. At issue in this case is a provision of the New Jersey statute which provides that a driver who is convicted of, or pleads guilty to, driving while intoxicated in connection with an accident “shall have no cause of action for recovery of economic or non-economic loss sustained as a result of the accident.” The Supreme Court upheld the Appellate Division decision and has ruled that an individual who has been convicted of, or pleads guilty to, driving while intoxicated may file a Dram Shop Claim against a tavern for allegedly over-serving him.

By way of background, on November 9, 2006, Frederick Voss was injured when his motorcycle collided with a vehicle operated by Kristoffe Tranquilino. Voss claimed that prior to the accident, he had been a patron at Tiffany’s Restaurant and that Tiffany’s served him while visibly intoxicated. After the accident, Voss’ Blood Alcohol Content was .196. He was charged with and pled guilty to driving while intoxicated.

Voss filed a personal injury claim against the driver of the vehicle he struck as well as Tiffany’s. Tranquilino was dismissed from the case. Tiffany’s filed a motion for summary judgment based on N.J.S.A. 39:6A-4.5(b) which provides that an individual convicted of, or who has pled guilty to, driving while intoxicated shall have no cause of action for recovery of economic or non-economic losses. The trial court denied that motion. Tiffany’s then appealed.

In reviewing this matter, the Appellate Division noted that the Dram Shop Act, N.J.S.A. 2A:22A-1 et seq., provides the exclusive civil remedy for injuries resulting from the negligent service of alcoholic beverages by a licensed server. Under the Dram Shop Act, negligent service of alcoholic beverages occurs “only when the server serves a visibly intoxicated patron…which was in a state of intoxication accompanied by perceptual acts or series of acts which present clear signs of intoxication.” In reviewing the legislative history of the Dram Shop Act, the Appellate Division noted that prior to the Dram Shop Act being enacted, a proposed version of the bill provided that: (1) any person who became intoxicated and sustained personal injuries or property damage as a result of his actions while intoxicated would be prohibited from instituting a civil action for damages against the licensed server; and (2) a person who knowingly rode in a vehicle operated by an intoxicated person would be prohibited from instituting legal action for damages against a licensed server. Both of these proposed provisions were stricken from the final version of the Dram Shop Act.

In addressing N.J.S.A. 39:6A-4.5(b), which was passed ten years after the Dram Shop Act, the Appellate Division noted that the purpose of that section of the statute was to reduce automobile insurance premiums. Accordingly, the Court found that a unilateral bar to intoxicated drivers pursuing a dram shop claim would undermine the public policy of holding licensed alcoholic beverage servers accountable for the service of alcohol to their patrons. The Appellate Division ultimately held that the Dram Shop Act was the sole remedy for claims against licensed servers and as such does not prohibit claims made by individuals who have pled guilty to DWI. As such, the Appellate Division found that it was permissible under New Jersey law for Mr. Voss to pursue his claim against Tiffany’s.

In a two page decision, the Supreme Court affirmed the Appellate Division’s findings. The majority of the court noted that N.J.S.A. 39:6A-4.5(b) was instituted to reduce automobile insurance and applying its language strictly would repeal a portion of the Dram Shop Act. The majority opined that repeal by implication is impermissible. Additionally, the court noted that while N.J.S.A. 39:6A-4.5 was intended to further deter drunk driving, the provision of the statute can coexist with the Dram Shop Act as “permitting a drunk driver to file an action against a liquor establishment and its servers for serving a visibly intoxicated patron similarly advances the goal of deterring drunk driving.”

Justice Albin filed a dissenting opinion which accused the majority of ignoring the legislature and imposing its will in this case. Justice Albin wrote that the majority “has rewritten a clear and unambiguous statute under the dubious assumption that the legislature did not mean what it said.” Justice Albin went on to note that N.J.S.A. 39:4-6.5 was passed a number of years after the Dram Shop Act. As it is presumed the legislature knew the Dram Shop Act existed, if it wished to allow drunk drivers to pursue their own legal actions, it could have easily included such a provision in the statute. The legislature did not, and as such, Justice Alden found that Voss should not be permitted to maintain this action.

Ultimately, this means that licensed liquor servers face potential lawsuits from individuals alleging to have been over-served in their establishment even if they plead or are convicted of driving while intoxicated. However, as a practical matter, in gauging comparative fault, generally a jury should find the majority, if not all, of the happening of the accident was due to the actions of the drunk.