Opinion
DOCKET NO. A-3089-14T2
06-20-2016
VIDAL PADILLA, Plaintiff-Respondent, v. PERSONAL SERVICE INSURANCE COMPANY, Defendant-Appellant.
Methfessel & Werbel, attorneys for appellant (Michael Eatroff, on the briefs). David K. Cuneo, attorney for respondent.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fisher and Rothstadt. On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-1504-14. Methfessel & Werbel, attorneys for appellant (Michael Eatroff, on the briefs). David K. Cuneo, attorney for respondent. PER CURIAM
In this personal injury protection (PIP) coverage dispute, defendant Personal Service Insurance Company appeals from the Law Division's February 6, 2015 order denying defendant's motion for summary judgment, granting plaintiff Victor Padilla's cross-motion for the same relief, directing that defendant "afford [p]laintiff first[-]party [PIP] benefits arising from [a] January 6, 2014 motor vehicle accident," and requiring defendant to pay counsel fees and costs to plaintiff. The accident occurred while plaintiff drove a vehicle that he did not own and that was insured by defendant. At the time, plaintiff owned an uninsured vehicle that he claimed he did not operate and thus was not required to maintain mandatory PIP insurance coverage. The motion judge agreed, determining the evidence established that plaintiff owned but did not intend to operate his vehicle.
On appeal, defendant contends that plaintiff operated his vehicle and therefore was "culpably uninsured," that the judge should not have strictly construed the exclusionary language of defendant's policy in favor of plaintiff, and that "if the uninsured vehicle was not actually being operated . . . , the question of intent to operate should have been an issue for trial." Plaintiff responds by arguing that because he was not operating and did not intend to operate his uninsured vehicle at the time of the accident, he was not required to maintain insurance under the applicable statutes, and that the judge correctly awarded him counsel fees and costs.
We have considered the parties' arguments in light of our review of the record and applicable legal principles. We reverse.
The salient facts in this case, drawn from the competent evidential materials, and viewed "in the light most favorable to . . . the non-moving part[ies]," Lippman v. Ethicon, Inc., 222 N.J. 362, 367 (2015) (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523, 540 (1995)), can be summarized as follows. At the time of the 2014 accident, plaintiff was operating his nephew's vehicle. Since plaintiff did not have motor vehicle insurance at the time — and alleged that he "did not own an operable motor vehicle" — he submitted to defendant an application for PIP benefits as the insurer of his nephew's vehicle. Upon investigating the claim and conducting a motor vehicle search, defendant discovered that four uninsured vehicles were registered to plaintiff at the time of the accident. Plaintiff provided defendant an affidavit stating that he was in possession of only one vehicle, a 1979 Chevrolet El Camino pickup truck that "was not operational on the accident date" and "would cost more to repair than [it] was worth." Based on its investigation, defendant issued a denial of coverage to plaintiff, relying on N.J.S.A. 39:6A-7(b)(1).
The statute permits an insurer to "exclude from [PIP] benefits . . . any person having incurred injuries or death, who, at the time of the accident . . . was the owner or registrant of an automobile registered or principally garaged in this State that was being operated without personal injury protection coverage." N.J.S.A. 39:6A-7(b)(1). Defendant's policy mirrored the statute's language.
Plaintiff filed this action against defendant, alleging he was owed first-party PIP benefits arising out of the accident. Defendant filed an answer denying coverage for the PIP claim because of plaintiff's status as a culpably uninsured driver.
At his ensuing deposition, plaintiff confirmed that the pickup was registered and continued to display license plates at the time of the accident. According to plaintiff, he had not done anything to ensure that the car could not be driven, and, in fact, he occasionally started the vehicle and drove it "back and forth" in his driveway because he could not "drive it a lot." Plaintiff stated that in order to facilitate cleaning the driveway at his wife's request, he would jump-start the vehicle and drive it around the driveway or would push it into and out of the street.
Plaintiff explained the vehicle was not operational because on April 10, 2012, it had been involved in an accident that damaged the car's transmission and wheel well, rendering it "not operational on the accident date." After the accident, however, plaintiff had the wheel well repaired so that the vehicle's wheels could move. Also, a mechanic later reconnected and "jumped" the battery, and drove the vehicle about a block until he determined that the transmission was slipping and "get[ting] hot." Plaintiff admitted that he planned to keep the vehicle and intended to restore it, until he received a quote to repair the vehicle's transmission at a cost greater than the car's value. As a result, plaintiff cancelled his insurance for the vehicle but did not remove the license plates, maintained the vehicle's registration, and did not do anything to ensure that no one could drive the vehicle.
After plaintiff's deposition, the parties filed cross-motions for summary judgment. On February 6, 2015, the motion judge considered counsels' oral arguments and entered an order denying defendant's motion and granting plaintiff's cross-motion. The judge concluded that resolution of the parties' dispute "g[o]t down to [plaintiff's] intent," finding that plaintiff "did not own th[e] vehicle with the intent . . . to operate [it], even on a sporadic basis. . . . It was a vehicle that for all intents and purposes was unable to be moved outside of the driveway."
Although copies of the notices of motion and cross-motion are included in defendant's appendix, we have not been supplied with copies of the supporting certifications. There is no dispute, however, that the documents included in the appendix were part of the motion record.
The judge determined plaintiff's intent not to operate the vehicle based upon the fact that at the time of the 2014 accident, plaintiff already had an estimate that it would cost too much to repair the vehicle. The judge found plaintiff held on to the estimate with the intent that, once he saved enough money, he could have the vehicle restored and then would be obligated again to insure it. The judge noted that "issues regarding registration . . . don't come to bear in this circumstance." He concluded by awarding plaintiff counsel fees and costs and entering the order. This appeal followed.
Our review of a ruling on summary judgment is de novo, applying the same legal standard as the trial court. Townsend v. Pierre, 221 N.J. 36, 59 (2015). "Summary judgment must be granted if 'the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show . . . there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment . . . as a matter of law.'" Town of Kearny v. Brandt, 214 N.J. 76, 91 (2013) (quoting R. 4:46-2(c)). "If there is no genuine issue of material fact, we must then 'decide whether the trial court correctly interpreted the law.'" DepoLink Court Reporting & Litig. Support Servs. v. Rochman, 430 N.J. Super. 325, 333 (App. Div. 2013) (quoting Massachi v. AHL Servs., Inc., 396 N.J. Super. 486, 494 (App. Div. 2007), certif. denied, 195 N.J. 419 (2008)). We accord no deference to the trial judge's conclusions on issues of law and review issues of law de novo. Nicholas v. Mynster, 213 N.J. 463, 478 (2013).
Applying these standards, we conclude the evidence in the motion record established a prima facie case supporting exclusion of PIP coverage that plaintiff failed to rebut. "Our courts have precluded a person from collecting PIP benefits under N.J.S.A. 39:6A-7(b)(1) simply because he or she was the owner of an uninsured automobile at the time of an accident even when the accident occurred in someone else's insured vehicle." Perrelli v. Pastorelle, 206 N.J. 193, 204 (2011). "The mere fact that a person owns a vehicle that is being operated without insurance around the time of an accident disqualifies that person from PIP coverage regardless of whether the person's vehicle is involved in the accident . . . ." Id. at 206 (quoting Craig & Pomeroy, N.J. Auto Insurance Law 306 (2011)). A vehicle owner becomes "culpably uninsured" if he or she is "required by statute to maintain PIP coverage but . . . ha[s] failed to do so." Id. at 202 (quoting Craig & Pomeroy, supra, at 305). "The owner need not be 'actually operating the unprotected vehicle.'" Id. at 204 (quoting Gibson v. N.J. Mfrs. Ins. Co., 261 N.J. Super. 579, 585 (App. Div. 1993)).
"[I]f an insurer comes forward with evidence that [the] owner or registrant of vehicle does not have PIP coverage, 'a prima facie case of exclusion has been established.'" Ibid. (quoting Gibson, supra, 261 N.J. Super. at 585). "The PIP claimant must then come forward and show that the vehicle was not being operated in or around the time of the accident, based on a conscious determination to prevent use of the uninsured vehicle as demonstrated by the conduct of the owner or registrant." Carmichael v. Bryan, 310 N.J. Super. 34, 48 (App. Div. 1998) (quoting Gibson, supra, 261 N.J. Super. at 585-86).
A vehicle owner is required to maintain compulsory insurance under New Jersey's Compulsory Motor Vehicle Insurance Law, N.J.S.A. 39:6B-1 to -3, if he or she "operates or causes to be operated a motor vehicle upon any public road or highway in this State." Perrelli, supra, 206 N.J. at 204 (quoting N.J.S.A. 39:6B-2). Cases addressing the issue of whether a vehicle can be operated look to whether the automobile has been actually operated or whether the owner has taken sufficient action to render the vehicle inoperable, thereby evincing an intent not to operate the vehicle on the roads. See Carmichael, supra, 310 N.J. Super. at 42-43; see also Caldwell v. Kline, 232 N.J. Super. 406, 412-14 (App. Div. 1989) (finding an owner of a temporarily inoperable vehicle excluded from recovery under the Unsatisfied Claim and Judgment Fund); Lilly v. Prudential Ins. Co., 246 N.J. Super. 357, 358, 362 (Law Div. 1990) (holding PIP benefits "c[ould not] be denied to an owner of an uninsured operable automobile"), aff'd o.b., 246 N.J. Super. 280 (App. Div. 1991); Kennedy v. Allstate Ins. Co., 211 N.J. Super. 515, 518-20 (Law Div.) (excluding claimant from PIP coverage benefits under another's insurance where claimant operated his uninsured vehicle up until time of accident), aff'd o.b., 213 N.J. Super. 137 (App. Div. 1986). The exclusion from eligibility for PIP benefits is "not meant to apply to owners of vehicles which are not operable at the time of the accident so long as there was no intent to operate them in or around that time." Carmichael, supra, 310 N.J. Super. at 46.
The owner's actions must establish that he or she "has taken a vehicle off the road with no intention of operating the uninsured vehicle, . . . and without registration and license plates, [so that] the vehicle could be no danger to anyone." Id. at 44 (citations omitted) (quoting Foxworth v. Morris, 134 N.J. 284, 290-91 (1993)). "[A]lthough the owner need not show an intent to abandon the vehicle, he must demonstrate that 'there was no intention to make the vehicle operable in the immediate future after . . . withdrawal from the road, and present competent proof that the basis for inoperability was substantial.'" Ibid. (quoting Foxworth, supra, 134 N.J. at 291). The plaintiff must prove "by competent evidence that substantial repairs were required in order to make the vehicle operable." Foxworth, supra, 134 N.J. at 291.
Factors that a court should consider include the "length and extent of inoperability, whether the vehicle was in storage before being repaired, whether the owner intended to maintain it for use, whether the vehicle was currently registered and licensed, and whether insurance lapsed as a result of factors unrelated to its inoperability." Caldwell, supra, 232 N.J. Super. at 413. Some instances manifesting "an owner's intent not to operate his motor vehicle" include "the student who stores his automobile while away at school; the businessman living in Europe for a short period of time; the driver who has lost his license; the owner of an antique but operable automobile[;] and the elderly person who has decided not to drive any longer." Lilly, supra, 246 N.J. Super. at 360. "[A] vehicle that is inoperable because it has no battery [does] not meet the test." Carmichael, supra, 310 N.J. Super. at 44. Nor does a "car need[ing] more than minor repairs [where its] owner intended to repair the vehicle and operate it" but for being "short of cash," unless, without registering the vehicle, the owner "never drove the vehicle, had stored the car . . . , and eventually junked it." Foxworth, supra, 134 N.J. at 290. Similarly, PIP benefits are properly denied to an owner who "admit[s] during depositions that he had operated his vehicle up until the time of the accident" for which benefits were sought. Carmichael, supra, 310 N.J. Super. at 45 (quoting Kennedy, supra, 211 N.J. Super. at 518). Conversely, an owner who registers his or her vehicle, but places it in storage, demonstrates an intent not to operate the vehicle, thereby entitling him or her to PIP benefits when appropriate. Id. at 46.
As "registering a car in New Jersey without certifying that insurance is in effect is not possible, any registration would have been fraudulent." Id. at 45 (quoting Foxworth, supra, 134 N.J. at 290). Registering an uninsured vehicle "demonstrate[s] that . . . ownership of the vehicle . . . present[s] a danger to the motoring public." Id. at 45 (quoting Foxworth, supra, 134 N.J. at 291). --------
We recognize that "a court should be 'particularly hesitant' to apply the summary judgment model when dealing with a 'subjective element[] such as intent.'" Id. at 47 (alteration in original) (quoting Shanley & Fisher, P.C. v. Sisselman, 215 N.J. Super. 200, 212 (App. Div. 1987)). However, based on plaintiff's testimony and undisputed conduct, we conclude that the motion judge mistakenly determined that plaintiff proved he manifested an intent not to operate his vehicle. Indeed, accepting as true plaintiff's statements, he provided no evidence that the vehicle was inoperable. Instead, he asserted that his pickup truck was operational and that he, in fact, drove it around his driveway when his wife requested that he clean the driveway. Further, he had the wheel well repaired so the tire would not be stuck and was also able to have his mechanic test drive the vehicle to determine whether the transmission needed repairs. Significantly, despite not having insurance, plaintiff kept the vehicle registered and its license plates displayed at or about the time of his 2014 accident.
The test of inoperability is not that the vehicle's operation is dangerous or inadequate but that it is not capable of being operated absent substantial repairs. Accepting the truth of plaintiff's testimony, we conclude that he established his vehicle was operational at the time of his 2014 accident so as to require him to maintain PIP coverage for his injuries.
We reverse the judgment entered in favor of plaintiff and remand for the entry of summary judgment in favor of defendant dismissing the complaint. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION