JOHN KARAMISAKIS v. MARK and CAROL BLUMBERG

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6904-03T36904-03T3

JOHN KARAMISAKIS,

Plaintiff-Appellant,

v.

MARK and CAROL BLUMBERG,

husband and wife,

Defendants, Third-Party

Plaintiffs-Respondents

and

ANASTASIA GRAMMENOS,

Third-Party Defendant-

Respondent.

_________________________________________________

 

Argued October 11, 2005 - Decided:

Before Judges Skillman and Payne.

On appeal from the Superior Court of New Jersey, Law Division, Burlington County, L-3552-02.

Vincent A. Campo argued the cause for

appellant, (Louis R. Busico, attorney;

Mr. Busico on the brief).

Frank Caruso appeared for respondents/

third party-plaintiffs (Hoagland, Longo,

Moran, Dunst & Doukas attorneys; Edward

J. Rebenack of counsel, Joseph V. Leone

on the joint brief filed by respondents).

Daniel Distasi argued the cause for

third-party defendant/respondent

(Green Lundgren & Ryan, attorneys;

Mr. Distasi of counsel and on the joint brief).

PER CURIAM

Plaintiff John Karamisakis, a resident of Pennsylvania who had obtained auto insurance in that state with a limited tort option, was injured in an automobile accident in New Jersey while a passenger in a car driven by an unrelated Pennsylvania driver, third-party defendant Anastasia Grammenos. The alleged tortfeasor, defendant Carol Blumberg, driving a car owned by her husband, defendant Mark Blumberg, was a resident of New Jersey. Karamisakis allegedly sustained a L4-5 herniation as the result of the accident.

Karamisakis has appealed from a summary judgment against him, dismissing his suit as the result of his failure to meet New Jersey's limitation on lawsuit threshold. N.J.S.A. 39:6A-8a. The trial court found that threshold applicable as the result of New Jersey's deemer statute, N.J.S.A. 17:28-1.4, which provides in relevant part:

[A]ny insurer . . . controlling or controlled by, or under common control by, or with, an insurer authorized to transact or transacting automobile or motor vehicle insurance business in this State, which sells a policy providing automobile or motor vehicle liability insurance coverage . . . in any other state . . . shall include in each policy coverage to satisfy at least [enumerated New Jersey minimum liability, uninsured motorist and personal injury protection insurance requirements] whenever the automobile or motor vehicle insured under the policy is used or operated in this State.

Any liability insurance policy subject to this section shall be construed as providing the coverage required herein, and any named insured, and any immediate family member . . . shall be subject to the tort option specified in [N.J.S.A. 39:6A-8a].

(Emphasis supplied.)

In a written opinion, the motion judge found the deemer statute applicable to Karamisakis, because his Pennsylvania insurer was affiliated with an insurer authorized to write automobile insurance business in New Jersey a determination that is not challenged on appeal. The judge was not persuaded by the argument that N.J.S.A. 17:28-1.4 requires the use or operation of the insured vehicle in New Jersey as a pre-condition to the applicability of the deemer statute.

The court also held that New Jersey law applied to the case, and that Karamisakis was subject to the limitation on lawsuit threshold of the New Jersey Automobile Insurance Cost Reduction Act (AICRA), not to Pennsylvania automobile insurance law. The motion judge then dismissed Karamisakis's claim, holding in a decision rendered prior to the Supreme Court's opinions in DiProspero v. Penn, 183 N.J. 477 (2005) and Serrano v. Serrano, 183 N.J. 508 (2005), that even if she assumed that Karamisakis had established the existence of a permanent injury, he did not meet the serious life impact prong of Oswin v. Shaw, 129 N.J. 290 (1992) and James v. Torres, 354 N.J. Super. 586 (App. Div 2002), certif. denied, 175 N.J. 547 (2003).

Karamisakis has appealed. He claims that, contrary to the opinion of the motion judge, the deemer statute is inapplicable to him because he was a passenger, not the operator of a car involved in the accident. He has argued additionally that if the limitation of lawsuit provision of AICRA applies to him, he has demonstrated both a permanent injury and a substantial life impact. We note that the latter requirement has now been eliminated by DiProspero, supra, 183 N.J. at 506, and Serrano, supra, 183 N.J. at 515. See also Beltran v. DeLima, 379 N.J. Super. 169 (App. Div. 2005) (according pipeline retroactivity to DiProspero and Serrano). Our resolution of this case does not require us to determine whether Karamisakis offered sufficient proof that he sustained a permanent injury causally related to the accident.

In their joint brief, the Blumbergs and Grammenos (defendants) argue that Karamisakis has misconstrued the language of the deemer statute, and that the requirement of operation by an out-of-state insured of a vehicle in New Jersey applies only to the provision of the liability, uninsured motorist (UM), and personal injury protection (PIP) benefits enumerated in that paragraph. Defendants argue:

The last paragraph of the deemer statute states: "Any liability insurance policy subject to this section shall be construed as providing the coverage required herein, and any named insured, and any immediate family member . . . under that policy shall be subject to the [verbal threshold]." [N.J.S.A.] 17:28-1.4. If "any liability insurance policy subject to this section" was intended to mean all those policies providing all the coverages listed when the vehicle was operated in New Jersey, the Legislature would not have had to reiterate that policies subject to the section "shall be construed as providing the coverage required herein," as those policies would have already been defined as those providing such coverage.

Defendants contend that in order to avoid finding superfluous or meaningless portions of the deemer statute in which the limitation on lawsuit provisions appear, thereby violating one of the tenets of statutory construction summarized by the Supreme Court in Franklin Tower One, L.L.C. v. N.M., 157 N.J. 602, 623 (1999), the phrase "any liability insurance policy" must be construed as meaning any automobile liability insurance policy issued to an out-of-state insured by an insurer authorized to write insurance business in New Jersey or its affiliate. Otherwise, defendants argue, the phrase "shall be construed as providing the coverage required herein" is surplusage.

We do not construe the deemer statute as defendants suggest. We note in this regard that the final paragraph of the deemer statute requires each insurer subject to its provisions to "file and maintain with the Department of Banking and Insurance written certification of compliance with the provisions of this section." Viewed in light of this provision, the language upon which defendants focus "deems" compliance with the statute's provisions to exist regardless of whether the requirement that a written certification be filed has been met. See Canal Ins. Co., v. F.W. Clukey Trucking Co., 295 N.J. Super. 131, 137 (App. Div. 1996).

We have specifically adopted this construction previously in Lusby By and Through Nichols v. Hitchner, 273 N.J. Super. 578, 583 (App. Div. 1994), where we stated in describing the deemer statute:

In essence, that statute provides that every automobile policy issued to an out-of-state insured by an insurer authorized to transact business in this state shall include the PIP coverage required by the law of this state "whenever the automobile or motor vehicle insured under . . . [that] policy is used or operated in this State." Moreover, the statute provides that every automobile policy subject to its terms shall be "construed as providing the coverage required herein," that is, the statute eponymously "deems" that the policy includes the required coverage.

Thus construed, no surplus language exists, and mandated New Jersey liability, PIP and UM coverage is ensured whenever an out-of-state vehicle covered by a company authorized to transact automobile insurance business in New Jersey or its affiliate is involved in a motor vehicle accident in this State, regardless of whether the insurer has acknowledged its obligation by filing the required certification.

In support of their position that Karamisakis's status as a passenger in a vehicle owned and insured by a Pennsylvania resident has no bearing on the application of the limitation on lawsuit provisions of the deemer statute to him, defendants point to dictum in Weiss v. Thomas, 274 N.J. Super. 37 (App. Div. 1994), a decision discussing the applicability of the then-verbal threshold to a North Carolina passenger in a car owned and insured by a New Jersey resident that was involved in an accident in New York. In that case, we held that New Jersey's deemer statute was inapplicable to the North Carolina plaintiff, observing that the policy would be subject to that statute "only in the event that the insured became entitled to indemnification or other benefits from her insurer under that policy as the result of an event which, unlike plaintiff's New York accident, occurred in New Jersey." Id. at 44. Our focus on the locale of the accident, defendants suggest, demonstrates the irrelevance of the plaintiff's status as a passenger. We do not draw that inference from dictum in an opinion focusing on other aspects of the deemer statute.

In arguing that the deemer statute applies to persons, not vehicles, defendants also rely on the utilization by various courts of "residents" or "insureds" when discussing the application of the verbal threshold under the deemer statute. See Taylor v. Rorke, 279 N.J. Super. 63, 67-68 (App. Div.) (the deemer statute automatically assigns the verbal threshold tort option "to out-of-state residents" involved in New Jersey accidents), certif. denied, 141 N.J. 99 (1995), Dyszel v. Marks, 6 F.3d 116, 119 (3d Cir. 1993) (same) and Whitaker v. DeVilla, 147 N.J. 341, 356 (1997) (referring to a 1988 law "amending the deemer statute to impose the verbal threshold on all out-of-state insureds whose automobile policies were issued by insurers authorized to transact business in New Jersey."). We do not find the cited authority to support defendants' position, since none of the cases upon which reliance is placed considered the issue that is presently before us. We find it more logical to conclude that the references to insureds and residents arose because it was they who filed suit.

We note as well, as defendants acknowledge, that the Supreme Court's opinion in Whitaker commences with the following description of the verbal threshold provisions of the deemer statute that is consistent with our interpretation of its language, stating:

That statute deems New Jersey's "verbal threshold," which allows automobile accident tort recovery for non-economic losses only for bodily injury of a type or degree within one of the nine defined categories set forth in N.J.S.A. 39:6A-8a, to apply to the policies of out-of-state residents using their automobiles in New Jersey if their insurers are authorized to do business in New Jersey.

[Id. at 344 (emphasis supplied).]

See also id. at 348 ("irrespective of the minimum insurance requirements of the insured's state, the deemer statute guarantees that if the insured's vehicle is operated in New Jersey, the insurer will provide [mandated New Jersey coverage].") (emphasis supplied); Martin v. Home Ins. Co., 141 N.J. 279, 282 (1995) (requiring payment of New Jersey PIP benefits in accidents involving out-of-state cars "operated in New Jersey" that are insured by companies qualified to do business in this State); Government Employees Ins. Co. v. Allstate Ins. Co., 358 N.J. Super. 555, 562 (App. Div 2003) (same); Canal Ins. Co., supra, 295 N.J. Super. at 137 (any insurer authorized to transact auto insurance business in New Jersey must provide insurance protection complying with New Jersey law to out-of-state insureds with respect to "any claims arising from accidents which occur while the vehicle 'is used or operated in this State.'"); Lusby, supra, 273 N.J. Super. at 583 (interpreting together the mandatory coverage and deemer provisions of the statute); Adams v. Keystone Ins. Co., 264 N.J. Super. 367, 374 (App. Div. 1993) ("N.J.S.A. 17:28-1.4 applies only to 'automobiles' which are 'used or operated in New Jersey.'"); Cynthia M. Craig & Daniel J. Pomeroy, New Jersey Auto Insurance Law, 1:2-6 at 13 (2005 ed.) (the deemer law "applies only to out-of-state vehicles which are used and operated in New Jersey, and only while they are being so used or operated.").

As a final matter, defendants argue that the construction that we adopt is inconsistent with the legislature's purpose to "prevent an increase in New Jersey automobile insurance premiums." The limitation on tort recovery in exchange for the enhanced PIP and other benefits provided by the deemer statute has been recognized in Whitaker and other cases as the mechanism chosen by the Legislature to contain costs arising from accidents involving out-of-state vehicles that would otherwise be borne by the New Jersey insurance market. 147 N.J. at 351 (quoting Adams, supra, 264 N.J. Super. at 377-78); see also, e.g., Dyszel, supra, 6 F.3d at 126.

Although defendants are correct that our determination that New Jersey's limitation on lawsuit provisions are inapplicable in this case does not further the Legislature's cost-containment goals, we cannot for that reason rewrite the legislation, which is clear on its face. DiProspero, supra, 183 N.J. at 492; O'Connell v. State, 171 N.J. 484, 488 (2002) (we cannot "rewrite a plainly-written enactment of the Legislature []or presume that the Legislature intended something other than it expressed by way of the plain language."). We note in this regard that suits seeking damages for pain and suffering by out-of-state drivers insured by companies that are not authorized to write auto insurance in New Jersey or affiliated with such companies likewise are not governed by the limitation of lawsuit provisions of N.J.S.A. 39:6A-8a. Canal Ins. Co., supra, 295 N.J. Super. at 137. The Legislature's cost-containment remedy thus can be considered imperfect in other respects.

We therefore reverse the order of summary judgment insofar as it resulted from the application of the limited tort option of N.J.S.A. 39:6A-8a to Karamisakis through the operation of the deemer statute, N.J.S.A. 17:28-1.4. We do not address whether any other law serves to limit Karamisakis's recovery, or the construction of potentially applicable statutory provisions.

Reversed.

 

Persons covered by such policies likewise cannot benefit from mandated New Jersey PIP, UM and liability coverage limits.

(continued)

(continued)

12

A-6904-03T3

November 28, 2005