NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-5393-16T4
NORMA BLANCO-SANCHEZ,
Plaintiff-Appellant,
v.
PERSONAL SERVICE INSURANCE COMPANY,
Defendant-Respondent. ______________________________
Argued October 23, 2018 – Decided February 28, 2019
Before Judges Rothstadt and Gilson.
On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-2607-16.
Lars S. Hyberg argued the cause for appellant (Hyberg, White & Mann, attorneys; Lars S. Hyberg, on the briefs).
Jared P. Kingsley argued the cause for respondent (Methfessel & Werbel, PC, attorneys; Jared P. Kingsley, on the brief).
PER CURIAM In this appeal we are asked to determine whether the driver of an
automobile who operates a vehicle with an owner's permission that was given
with knowledge that the driver never held a license, is a permissive user who
may recover personal injury protection (PIP) benefits under the New Jersey
Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 to -35, the "No Fault
Act." For the reasons that follow, we conclude that as a matter of public policy,
an owner cannot give permission to a driver who is known to be unlicensed and,
therefore, the unlicensed driver is barred from any recovery under the No Fault
Act for PIP benefits under N.J.S.A. 39:6A-7(b)(2) (authorizing the exclusion
from coverage of any person who "was occupying or operating an automobile
without the permission of the owner or other named insured").
Here, plaintiff Norma Blanco-Sanchez filed a complaint against her
mother Vilma Sanchez's automobile insurance carrier, defendant Personal
Service Insurance Company, after it denied plaintiff's claim for PIP benefits to
cover the cost of her medical treatment for injuries she sustained in an auto
accident. The accident occurred when plaintiff drove her mother's vehicle
without having ever been licensed to drive. Plaintiff appeals from the Law
Division's order granting defendant summary judgment after the motion judge
found that PIP coverage was not available to unlicensed drivers. We affirm.
A-5393-16T4 2 The facts, viewed in the light most favorable to plaintiff, are generally
undisputed. On December 8, 2014, plaintiff was involved in a motor vehicle
accident. On the morning of the accident, Sanchez was driven to work and left
her car on the street. While at work, she remembered that the street sweeper
would be cleaning the roads that day and called plaintiff to have her car moved
to avoid getting a ticket. At the time, Sanchez did not think that plaintiff would
move the car as she knew that plaintiff did not have a driver's license and had
never driven Sanchez's car.
In response to her mother's call, plaintiff said that she was going to get
someone to move the car, as she had done previously when her mother made
similar requests. However, when she could not find anyone to move the car, she
decided to do it herself. The accident occurred while plaintiff was attempting
to relocate the car. Plaintiff sustained shoulder, neck, and arm injuries in the
accident and incurred medical bills for her treatment.
At the time of the accident, Sanchez's insurance policy with defendant
provided PIP coverage for up to $15,000 in covered medical expenses. The
policy specifically defined an "eligible injured person" as "[t]he named insured
or any relative of the named insured, if the named insured or relative sustains
bodily injury . . . [a]s a result of any accident while occupying, using, entering
A-5393-16T4 3 into, or alighting from a private passenger auto . . . ." It excluded from coverage
the "bodily injury of any person at the time of the accident . . . [who] [w]as
operating or occupying a private passenger auto without the permission of the
owner or other named insured."
Plaintiff filed an application for PIP benefits, which defendant denied
because plaintiff did not have Sanchez's permission to operate the vehicle.
Defendant specifically stated that "since the driver . . . was unlicensed, it would
be impossible for the insured to give permission to a person who is not legally
eligible to drive."
Plaintiff filed a complaint for declaratory relief, alleging that "[t]he denial
of benefits [was] wrongful as the issue of permission is a factual [determination],
not a legal argument." She claimed there was "[n]o statutory or regulatory
authority" that stated that an insured could not grant permission to a person
without a license. She requested that judgment be entered "declaring that
[defendant] . . . is required to provide automobile [PIP] benefits[,]" including
payment of plaintiff's "medical expenses, plus cost of suit, attorney fees, [and]
interest . . . ."
Defendant filed its answer, admitting to issuing a policy that included PIP
coverage, but denying that plaintiff was entitled to coverage. Among its
A-5393-16T4 4 defenses, defendant stated that "[a]ny and all claims of the plaintiff are barred
due to the fact that plaintiff did not have permission to operate the vehicle."
Defendant subsequently filed a notice of motion for summary judgment
and plaintiff cross-moved for the same relief. In her motion, plaintiff did not
dispute that she never had a license and Sanchez never argued that she was
unaware of that fact.
On June 23, 2017, the parties appeared for oral argument. After
considering their arguments, the motion judge granted defendant's motion,
denied plaintiff's cross-motion, and dismissed plaintiff's complaint. The judge
placed his reasons on the record, which he began by finding that Sanchez gave
plaintiff "implied permission" to drive her vehicle. He then stated that the
question before him was
whether or not the mother could legitimately and legally confer on the plaintiff the right to operate that vehicle under the circumstances of this case where the plaintiff was not a licensed driver and the mother knew that she was not a licensed driver, albeit she says she forgot that she was not a licensed driver at the time of the conversation.
Reviewing the case law argued by the parties, the judge concluded
"whether it's unlicensed or suspended, the fact is that the plaintiff cannot benefit
from his or her own . . . illegal conduct." The judge stated that while the PIP
A-5393-16T4 5 portion of defendant's policy did not contain a specific exclusion for unlicensed
drivers, "the argument is [not] whether it contains an exclusion . . . you can't
give permission to extend the coverage in a situation where they couldn't have
[gotten] coverage to begin with." This appeal followed.
On appeal, plaintiff argues that she is entitled to PIP benefits as a resident
relative under N.J.S.A. 39:6A-4, and that she was specifically given permission
to use the car by her mother, making her a "permissive user" of the vehicle.
Plaintiff contends that denying her those benefits inserts a provision not found
in the statute or PIP policy that improperly limits an insured's or owner's ability
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-5393-16T4
NORMA BLANCO-SANCHEZ,
Plaintiff-Appellant,
v.
PERSONAL SERVICE INSURANCE COMPANY,
Defendant-Respondent. ______________________________
Argued October 23, 2018 – Decided February 28, 2019
Before Judges Rothstadt and Gilson.
On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-2607-16.
Lars S. Hyberg argued the cause for appellant (Hyberg, White & Mann, attorneys; Lars S. Hyberg, on the briefs).
Jared P. Kingsley argued the cause for respondent (Methfessel & Werbel, PC, attorneys; Jared P. Kingsley, on the brief).
PER CURIAM In this appeal we are asked to determine whether the driver of an
automobile who operates a vehicle with an owner's permission that was given
with knowledge that the driver never held a license, is a permissive user who
may recover personal injury protection (PIP) benefits under the New Jersey
Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 to -35, the "No Fault
Act." For the reasons that follow, we conclude that as a matter of public policy,
an owner cannot give permission to a driver who is known to be unlicensed and,
therefore, the unlicensed driver is barred from any recovery under the No Fault
Act for PIP benefits under N.J.S.A. 39:6A-7(b)(2) (authorizing the exclusion
from coverage of any person who "was occupying or operating an automobile
without the permission of the owner or other named insured").
Here, plaintiff Norma Blanco-Sanchez filed a complaint against her
mother Vilma Sanchez's automobile insurance carrier, defendant Personal
Service Insurance Company, after it denied plaintiff's claim for PIP benefits to
cover the cost of her medical treatment for injuries she sustained in an auto
accident. The accident occurred when plaintiff drove her mother's vehicle
without having ever been licensed to drive. Plaintiff appeals from the Law
Division's order granting defendant summary judgment after the motion judge
found that PIP coverage was not available to unlicensed drivers. We affirm.
A-5393-16T4 2 The facts, viewed in the light most favorable to plaintiff, are generally
undisputed. On December 8, 2014, plaintiff was involved in a motor vehicle
accident. On the morning of the accident, Sanchez was driven to work and left
her car on the street. While at work, she remembered that the street sweeper
would be cleaning the roads that day and called plaintiff to have her car moved
to avoid getting a ticket. At the time, Sanchez did not think that plaintiff would
move the car as she knew that plaintiff did not have a driver's license and had
never driven Sanchez's car.
In response to her mother's call, plaintiff said that she was going to get
someone to move the car, as she had done previously when her mother made
similar requests. However, when she could not find anyone to move the car, she
decided to do it herself. The accident occurred while plaintiff was attempting
to relocate the car. Plaintiff sustained shoulder, neck, and arm injuries in the
accident and incurred medical bills for her treatment.
At the time of the accident, Sanchez's insurance policy with defendant
provided PIP coverage for up to $15,000 in covered medical expenses. The
policy specifically defined an "eligible injured person" as "[t]he named insured
or any relative of the named insured, if the named insured or relative sustains
bodily injury . . . [a]s a result of any accident while occupying, using, entering
A-5393-16T4 3 into, or alighting from a private passenger auto . . . ." It excluded from coverage
the "bodily injury of any person at the time of the accident . . . [who] [w]as
operating or occupying a private passenger auto without the permission of the
owner or other named insured."
Plaintiff filed an application for PIP benefits, which defendant denied
because plaintiff did not have Sanchez's permission to operate the vehicle.
Defendant specifically stated that "since the driver . . . was unlicensed, it would
be impossible for the insured to give permission to a person who is not legally
eligible to drive."
Plaintiff filed a complaint for declaratory relief, alleging that "[t]he denial
of benefits [was] wrongful as the issue of permission is a factual [determination],
not a legal argument." She claimed there was "[n]o statutory or regulatory
authority" that stated that an insured could not grant permission to a person
without a license. She requested that judgment be entered "declaring that
[defendant] . . . is required to provide automobile [PIP] benefits[,]" including
payment of plaintiff's "medical expenses, plus cost of suit, attorney fees, [and]
interest . . . ."
Defendant filed its answer, admitting to issuing a policy that included PIP
coverage, but denying that plaintiff was entitled to coverage. Among its
A-5393-16T4 4 defenses, defendant stated that "[a]ny and all claims of the plaintiff are barred
due to the fact that plaintiff did not have permission to operate the vehicle."
Defendant subsequently filed a notice of motion for summary judgment
and plaintiff cross-moved for the same relief. In her motion, plaintiff did not
dispute that she never had a license and Sanchez never argued that she was
unaware of that fact.
On June 23, 2017, the parties appeared for oral argument. After
considering their arguments, the motion judge granted defendant's motion,
denied plaintiff's cross-motion, and dismissed plaintiff's complaint. The judge
placed his reasons on the record, which he began by finding that Sanchez gave
plaintiff "implied permission" to drive her vehicle. He then stated that the
question before him was
whether or not the mother could legitimately and legally confer on the plaintiff the right to operate that vehicle under the circumstances of this case where the plaintiff was not a licensed driver and the mother knew that she was not a licensed driver, albeit she says she forgot that she was not a licensed driver at the time of the conversation.
Reviewing the case law argued by the parties, the judge concluded
"whether it's unlicensed or suspended, the fact is that the plaintiff cannot benefit
from his or her own . . . illegal conduct." The judge stated that while the PIP
A-5393-16T4 5 portion of defendant's policy did not contain a specific exclusion for unlicensed
drivers, "the argument is [not] whether it contains an exclusion . . . you can't
give permission to extend the coverage in a situation where they couldn't have
[gotten] coverage to begin with." This appeal followed.
On appeal, plaintiff argues that she is entitled to PIP benefits as a resident
relative under N.J.S.A. 39:6A-4, and that she was specifically given permission
to use the car by her mother, making her a "permissive user" of the vehicle.
Plaintiff contends that denying her those benefits inserts a provision not found
in the statute or PIP policy that improperly limits an insured's or owner's ability
to give a third party permission to use an insured vehicle. We disagree.
"We review an order granting summary judgment 'in accordance with the
same standards as the motion judge.'" Johnson v. Roselle EZ Quick LLC, 226
N.J. 370, 386 (2016) (quoting Bhagat v. Bhagat, 217 N.J. 22, 38 (2014)). "Such
a motion will be granted if the record demonstrates that there is no genuine issue
of material fact and 'the moving party is entitled to a judgment or order as a
matter of law.'" Ibid. (quoting R. 4:46-2(c)).
An award of summary judgment based upon a trial court's "statutory
interpretation is a legal issue requiring our de novo review. Accordingly, 'we
accord no deference to the trial judge's interpretive conclusions.'" Leggette v.
A-5393-16T4 6 Gov't Emps. Ins. Co., 450 N.J. Super. 261, 264 (App. Div. 2017) (quoting Brick
Twp. PBA Local 230 v. Twp. of Brick, 446 N.J. Super. 61, 65 (App. Div. 2016)).
The same standard applies to our review of a trial court's interpretation of an
insurance policy on a motion for summary judgment. Templo Fuente De Vida
Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016).
On appeal, there is no question that neither the PIP statutes nor defendant's
policy expressly excluded PIP coverage for injuries plaintiff sustained while
driving her mother's vehicle with permission, but without a license. Under
N.J.S.A. 39:6A-4, "[e]very insurance policy must include PIP benefits, which
guarantee 'without regard to fault,' medical expense coverage for the named
insured and members of his or her household." Perrelli v. Pastorelle, 206 N.J.
193, 201 (2011) (quoting Caviglia v. Royal Tours of Am., 178 N.J. 460, 466
(2004)).
The required coverage must be "the primary coverage for the named
insured and any resident relative in the named insured's household who is not a
named insured under an automobile insurance policy of his own." N.J.S.A.
39:6A-4.2. This "first-party coverage was 'intended to serve as the exclusive
remedy for payment of out-of-pocket medical expenses arising from an
automobile accident.'" Walcott v. Allstate N.J. Ins. Co., 376 N.J. Super. 384,
A-5393-16T4 7 388 (App. Div. 2005) (permitting a PIP claim by "an insured motorist who was
intoxicated at the time of the accident") (quoting Caviglia, 178 N.J. at 466.
"[T]he scope of coverage of a PIP policy should be approached liberally,
N.J.S.A. 39:6A-16, and exclusions from coverage, narrowly interpreted." Hardy
ex rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 106 (2009) (Long, J., dissenting)).
N.J.S.A. 39:6A-7 delineates specific individuals that "insurers may
exclude" from PIP coverage. Included among them are persons who were
"occupying or operating an automobile without the permission of the owner or
other named insured." N.J.S.A. 39:6A-7(b)(2). "The statute clearly and
unambiguously directs that an insurer may deny the extension of PIP benefits to
any person who, at the time of the accident, 'was occupying or operating an
automobile without the permission of the owner or other named insured .'"
Hardy, 198 N.J. at 103 (emphasis in original) (quoting N.J.S.A. 39:6A-7(b)(2)).
The clear language of the statute, therefore, authorizes defendant's
policy's exclusion. Ibid. "When the terms of the insurance flow from a statute,
'[t]he statute determines the legal operation of the contract.' . . . That is, when
the plain language of a policy provision is based on statutory authority, the
policy must be interpreted and construed in a manner consistent with the
statute." Id. at 102 (alteration in original) (quoting Saffore v. Atl. Cas. Ins. Co.,
A-5393-16T4 8 21 N.J. 300, 310 (1956)). A policy's "exclusionary provisions 'are
presumptively valid and will be given effect if "specific, plain, clear, prominent,
and not contrary to public policy."'" Ibid. (quoting Princeton Ins. Co. v.
Chunmuang, 151 N.J. 80, 95 (1997)).
Because defendant's policy did not exclude PIP coverage for permissive
drivers who were unlicensed, we turn to the State's public policy to determine if
it bars recovery by plaintiff here. We begin by observing that it is beyond cavil
that public policy requires all drivers to be licensed. See N.J.S.A. 39:3-29
(requiring a driver's license) and N.J.S.A.39:3-40 (making the operation of a
motor vehicle without one an offense). That policy is also incorporated into
New Jersey's automobile insurance scheme, which, while mandating that
liability and PIP coverage be secured by vehicle owners under N.J.S.A. 39:6A-
4 and N.J.S.A. 39:6B-1, allows insurers to decline to issue policies to drivers
whose licenses have been revoked or suspended. See N.J.S.A. 17:33B-13(b)
(defining those ineligible from coverage) and N.J.S.A. 17:29C-7 (allowing for
nonrenewal of policies for individuals whose "driver's license . . . has been
under suspension or revocation during the policy period"); see also Martin v.
Rutgers Cas. Ins. Co., 346 N.J. Super. 320, 326 (App. Div. 2002).
A-5393-16T4 9 Despite that public policy, the Supreme Court has concluded that public
policy dictates that there be coverage for third-party liability claims made by
innocent third parties injured as a result of the negligence of an unlicensed
permissive driver of an insured's vehicle. See Proformance Ins. Co. v. Jones,
185 N.J. 406, 413 (2005); see also Burke v. Auto Mart Inc., 37 N.J. Super. 451,
453 (App. Div. 1955). PIP coverage claims do not involve the same concerns.
PIP coverage is different from third-party liability coverage. It involves
claims made by the owner, insured, or individuals that operate a vehicle with
permission. "PIP coverage is first-party coverage." Garden State Fire & Cas.
Co. v. Commercial Union Ins. Co., 176 N.J. Super. 301, 305 (App. Div. 1980);
see also Rutgers Cas. Ins. Co. v. LaCroix, 194 N.J. 515, 523 (2008). Based on
that distinction, in Martin, we enforced a PIP policy's that "excluded coverage
for bodily injury sustained by a person '[u]sing a vehicle without a reasonable
belief that that person is entitled to do so.'" Martin, 346 N.J. Super. at 323
(alteration in original).
The plaintiff in Martin was an unlicensed driver of a vehicle owned by her
fiancé's stepfather, who did not know her driver's license had been revoked.
Ibid. There was a one-car collision. Id. at 321-22. The unlicensed driver sought
PIP and uninsured motorist (UM) coverage for her injuries under the stepfather's
A-5393-16T4 10 policy. She contended that the insurance company's "use of the term 'reasonable
belief' and its definition of that term [were] an unwarranted expansion of . . .
[N.J.S.A. 39:6A-7's] limited exemptions." Id. at 323-24. We disagreed and held
that even if the plaintiff had consent to drive the vehicle, she could not
reasonably believe that she was entitled to drive any car because she was
unlicensed and therefore not entitled to PIP or UM coverage for her injuries. Id.
at 325-26. We stated, as a matter of law, "an individual who knows that her
driver's license has been suspended and remains suspended, could form no
'reasonable belief' that she had permission to drive a vehicle." Id. at 324-25.
Although we denied coverage to the unlicensed driver, we distinguished
the claim from a third-party claim. We stated:
We also note the very limited question presented to us. We are not confronted with a claim for PIP coverage put forth by an unwitting, injured passenger. Neither are we presented with a claim for liability coverage by an individual injured as a result of a collision with a vehicle driven by plaintiff. Rather, we are asked to conclude that an individual who had to know she was not entitled to drive this automobile is entitled to PIP coverage and UM coverage for injuries she received while driving with complete disregard of her lack of entitlement.
[Id. at 325 (emphasis added).]
A-5393-16T4 11 Although we recognize that defendant's policy here did not contain any
exclusion from PIP coverage for a permissive user who drove " without a
reasonable belief that that person is entitled to do so," we conclude that as matter
of public policy the reasoning in Martin is equally applicable to the facts in this
case. See id. at 323. To hold otherwise would require insurer's to provide
coverage for unlicensed individuals who by definition are ineligible for
coverage and contravene the State's public policy. See Reilly v. AAA Mid-Atl.
Ins. Co. of N.J., 194 N.J. 474, 478, 495 (2008) (stating the general proposition
that an entity cannot exceed the scope of its statutory authority, and is therefore,
restricted from overstepping the limitations imposed on it by the State).
We reject as inapposite plaintiff's reliance upon the Supreme Court's
holding in Matits v. Nationwide Mut. Ins. Co., 33 N.J. 488 (1960) that dealt with
an accident caused by a permissive user who drove while intoxicated . In that
case, the Court "first adopted the initial permission rule." Proformance Ins. Co.
185 N.J. at 412.1 It "concluded that the permittee's 'deviation from the purpose
1 The rule states
that 'if a person is given permission to use a motor vehicle in the first instance, any subsequent use short of theft or the like while it remains in his possession, though not within the contemplation of the parties, is a
A-5393-16T4 12 for which she borrowed the vehicle did not annul the protection afforded her and
the injured plaintiffs by the omnibus clause of [the] policy.'" Ibid. (alteration in
original) (quoting Matits, 33 N.J. at 497). Plaintiff argues that if coverage was
afforded to the licensed, but intoxicated driver in Matits, there is no public
policy reason to bar her recovery here. We find that argument to be without any
merit as we are confronted here, not with a third-party claim against a licensed
driver, but with a first-party claim by plaintiff, who was never licensed to
operate any motor vehicle for any purpose.
We are satisfied from our de novo review that the trial court here correctly
dismissed plaintiff's complaint because neither Sanchez's permission nor
defendant's issuing her a policy of insurance gave plaintiff an unlimited right to
permissive use within the terms of . . . an automobile liability insurance policy.
[Jones, 185 N.J. at 412 (quoting Matits, 33 N.J. at 496- 97).]
Consistent with our public policy of protecting innocent third parties, "[u]nderlying the initial permission rule is the intent 'to assure "that all persons wrongfully injured have financially responsible persons to look to for damages " because "a liability insurance contract is for the benefit of the public as well as for the benefit of the named or additional insured."'" Id. at 413 (quoting Verriest v. INA Underwriters Ins. Co., 142 N.J. 401, 414 (1995)). A-5393-16T4 13 operate an automobile knowing that she was unlicensed and then to assert a first-
party claim under defendant's policy.
Affirmed.
A-5393-16T4 14