FINEGAN v. DICKENSON et al

Filing 25

ORDER granting 7 Motion to Apply the Verbal Threshold Pursuant to the Deemer Statute. Signed by Magistrate Judge Joel Schneider on 8/10/17. (dd, )

[Doc. No. 7]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

ANNE M. FINEGAN,
Plaintiff,
Civil No. 16-9516 (JS)
v.
SUSAN M. DICKENSON, et al.,
Defendants.
ORDER
This matter is before the Court on the “Motion to Apply the
Verbal

Threshold

Pursuant

to

the

Deemer

Statute”

filed

by

defendant Susan M. Dickenson. [Doc. No. 7]. The Court received
plaintiff’s opposition [Doc. Nos. 11, 12] and Dickenson’s reply
[Doc. No. 16]. The Court exercises its discretion not to hold
oral argument. Fed. R. Civ. P. 78; L. Civ. R. 78.1. For the
reasons to be discussed, Dickenson’s motion is granted.
Background
On August 6, 2016, plaintiff (Pennsylvania resident) was a
passenger

in

a

resident)

when

vehicle
the

driven

vehicle

by

was

Kevin

involved

Connor
in

a

(Pennsylvania
motor

vehicle

accident in New Jersey driven by defendant Susan M. Dickenson.
The

Connor

vehicle

was

registered

to

Connor’s

parents

and

insured by Chubb (New Jersey authorized insurer). Plaintiff is a
1

named driver on her parents’ insurance policy from Cincinnati
(New Jersey authorized insurer) with limited tort option under
PA law. Defendant is a New Jersey resident insured by a New
Jersey insurer.
Plaintiff alleges that defendant was distracted by the use
of

her

cell

phone,

causing

defendant’s

vehicle

to

cross

the

center line, resulting in a head-on collision with the Connor
vehicle. Following the accident, Chubb (Connor’s insurer) denied
PIP coverage to plaintiff stating: “Under an automobile policy
issued in the State of Pennsylvania, Priority of Coverage is the
injured person’s own automobile insurance policy, a household
automobile
vehicle’s

insurance
policy.”

policy
Ex.

E

and
to

Plaintiff

subsequently
policy

paid

Pl.’s

filed

Cincinnati

which

then

a

possibly
Opp’n

claim

$10,000

in

the

[Doc.

with
PIP

involved

No.

her

11-1].

parents’

medical

bills,

exhausting her First Party Benefits under the Cincinnati policy.
Ex. G to Pl.’s Opp’n [Doc. No. 11-3].
On

December

27,

2016,

plaintiff

filed

this

lawsuit.

Defendant filed her answer and the present motion on February
22,

2017.

[Doc.

Nos.

6,

7].

The

Court

granted

motions

to

intervene filed by Chubb and Cincinnati on April 7, 2017. [Doc.
No. 18]. Pursuant to 28 U.S.C. § 636(c), the parties consented
to the jurisdiction of this Court to hear the case. [Doc. No.
21].
2

Discussion
New

Jersey’s

“Deemer”

Statute

(N.J.S.A.

17:28-1.4)

addresses the situation when non-resident motorists are involved
in accidents in New Jersey. The statute requires that if a nonresident’s insurer is authorized to do business in New Jersey,
the insurer must provide personal insurance protection (“PIP”)
benefits to the non-resident. New Jersey’s automobile insurance
scheme
coverage

allows

prospective

options.

“The

insureds

first

type

to
of

choose
coverage,

between
outlined

two
in

section 39:6A-8(a), is known as ‘verbal threshold’ coverage, and
precludes tort recovery for non-economic injuries except those
that fall into six specific categories.” 1 Staub v. United States,
C.A. No. 08-2061(JBS/KMW), 2010 WL 743926, at *2 (D.N.J. Mar. 3,
2010). The second type of coverage (Section 39:6A-8(b)), allows
for unlimited recovery for non-economic injuries in exchange for
higher premiums. Id. As noted, the “Deemer” Statute requires New
Jersey authorized insurers (licensed in New Jersey) to provide
non-resident insureds, among other things, PIP coverage. Id. at
*3.

Importantly,

if

PIP

coverage

is

provided

the

verbal

threshold provision of N.J.S.A. 39:6A-8(a) is deemed to apply.
Nortesano v. Torres-Romero, 2006 WL 3475201 (N.J. Super. App.

1

The statute provides limited exception where the “person
sustained a bodily injury which results in death; dismemberment;
significant disfigurement or significant scarring; displaced
fractures; loss of a fetus; or a permanent injury within a
reasonable degree of medical probability.” N.J.S.A. 39:6A-8(a).
3

Div. Dec. 4, 2006); Dyszel v. Marks, 6 F.3d 116, 120 (3d Cir.
1993). The parties dispute whether the verbal threshold applies
to plaintiff.
In determining whether the verbal threshold applies to nonresident drivers, New Jersey courts have created a two-prong
test. Staub, at *3. The first prong requires an examination of
whether

the

defendant

is

the

owner

or

operator

of

an

“automobile” and is entitled to receive no-fault PIP benefits
under section 39:6A-4. The second prong focuses on whether the
plaintiff is a person subject to the verbal threshold statute
and is required to maintain PIP coverage, or has a right to
receive

PIP

benefits

under

N.J.S.A.

39:6A-4.

Id.

(citing

Beaugard v. Johnson, 281 N.J. Super. 162, 167 (App. Div. 1995)).
In the present matter the first part of the two-prong test is
easily satisfied. Defendant is the owner/operator of her car and
is entitled to receive PIP benefits as a New Jersey resident.
The

crux

of

the

present

dispute

is

whether

plaintiff’s

characteristics satisfy the second prong.
1.

Plaintiff is Subject to the Verbal Threshold by
Operation of Law

The

parties

pertinent

to

the

concede
present

the

Connor

analysis

as

vehicle
it

is

is

the

subject

vehicle
to

the

“Deemer” Statute by being used in New Jersey and insured by a
New

Jersey

authorized

insurer—Chubb.

See

Pl.’s

Opp’n

at

6

(“Defendant argues and Plaintiff agrees that Deemer does apply
4

to the Connor vehicle.”). Plaintiff argues, however, that the
Deemer statute does not apply to her. Defendant disagrees. The
Court sides with defendant. Def.’s Reply at 1 [Doc. No. 16].
Pursuant to N.J.S.A. 39:6A-8(a), plaintiff is subject to the
verbal threshold because she is entitled to receive PIP benefits
under N.J.S.A. 39:6A-4 by operation of law. The relevant portion
of

N.J.S.A.

39:6A-8(a)

provides:

“Every

owner,

registrant,

operator or occupant of an automobile to which [PIP coverage,
Section 39:6A-4] . . . regardless of fault, applies, and every
person

or

organization

omissions,

is

legally

hereby

exempted

responsible
from

for

tort

his

acts

liability

or
for

noneconomic loss to a person who . . . is a person who has a
right to receive benefits under [PIP coverage, Section 39:6A-4].
The decision in Koff v. Carrubba, 290 N.J. Super. 544, 547 (App.
Div. 1996) is instructive:
A person who is neither a named insured under a New
Jersey automobile liability policy nor a family member
residing with such a named insured is entitled to
receive PIP benefits only for an injury . . . which he
or she has suffered while occupying, entering into,
alighting from or using a named insured’s automobile
with the named insured’s permission . . . .
Id. at 185.
As noted, the parties concede that the Connor vehicle
is

subject

to

the

“Deemer”

Statute.

Accordingly,

plaintiff’s status as a passenger or occupant in the Connor
vehicle demonstrates that she was “occupying . . . a named
insured’s automobile with the named insured’s permission.”
5

Therefore,

by

virtue

of

her

occupancy

in

the

Connor

vehicle, plaintiff is deemed to have the right to receive
PIP

benefits

pursuant

to

the

provisions

of

the

Deemer

Statute and N.J.S.A. 39:6A-4. Thus, plaintiff’s claim for
non-economic damages is subject to the verbal threshold.
This is consistent with the holding in Beaugard, 281 N.J.
Super. at 171, which held: “we are persuaded that in order
to justify depriving a claimant of a common-law cause of
action for negligence, . . . , a claimant must also be
eligible to receive PIP benefits.”
2. In the Alternative, Plaintiff is Subject to the
Verbal Threshold through the Cincinnati Policy
Additionally, the Appellate Division held in Koff that:
A person has the right to receive PIP benefits
pursuant to N.J.S.A. 39:6A-4 if (1) he or she is the
named insured under a policy providing PIP benefits,
or is a family member residing with such a named
insured, and (2) has suffered an injury as the result
of an accident which occurred . . . while he or she
was occupying, entering or leaving any automobile . .
. .
Koff, 290 N.J. Super. at 546-47. For the purpose of N.J.S.A.
39:6A-4, plaintiff is considered an immediate family member of
the

named

insured

(parents)

under

the

Cincinnati

policy.

Accordingly, plaintiff is entitled to PIP benefits because: (1)
she was a family member residing with a named insured; and (2)

6

she

was

injured

plaintiff
Cincinnati

is

while

occupying

entitled

policy,

to

“any”

benefits

Deemer

the

PIP

Statute

automobile. 2
under

her

applies

Because
parents’

and,

thus,

plaintiff is subject to the verbal threshold.
The weakness in plaintiff’s argument is that she does not
address the interplay between N.J.S.A. 17:28-1.4, 39:6A-4 and
39:6A-8(a). In fact, plaintiff does not even discuss N.J.S.A.
39:6A-4 and N.J.S.A. 6A-8(a). Plaintiff is mistaken when she
only focuses on N.J.S.A. 17:28-14 while ignoring the limited
tort language in N.J.S.A. 39:6A-8(a). Since PIP coverage applies
to

the

Connor

plaintiff

is

vehicle
entitled

by

virtue

to

receive

of
PIP

the

Deemer

benefits

statute,
by

virtue

and
of

occupying the vehicle, defendant is exempted from tort liability
to plaintiff. N.J.S.A. 39:6A-8(a).
Conclusion
For the reasons discussed above, defendants’ motion will be
granted.

2

The fact that plaintiff is entitled to receive PIP benefits
under N.J.S.A. 39:6A-4 is axiomatic since Cincinnati paid
plaintiff PIP benefits. The Court assumes plaintiff resided with
her parents (named insured) or else Cincinnati may not have paid
her PIP benefits. Plaintiff’s Exhibits (A, E and F) also
demonstrate plaintiff lived at the same address as her parents.
7

O R D E R
Accordingly,

for

the

foregoing

reasons,

it

is

hereby

ORDERED this 10th day of August, 2017, that defendant’s motion is
GRANTED and it is the finding of this Court that plaintiff is
subject to the verbal threshold in the Deemer Statute. 3

s/Joel Schneider
JOEL SCHNEIDER
United States Magistrate Judge

3

It is not insignificant that plaintiff elected the limited tort
option on her insurance policy. See Chavez v. Proformance Ins.
Co., 2008 WL 3412223, at *3 (N.J. Super. App. Div. Aug. 14,
2008)(“We agree with the motion judge that the intent of the
deemer statute is not to permit an insured to recover greater
benefits than that which the insured has purchased.”) It would
be incongruous to hold that plaintiff is entitled to more
benefits than her named insured parents because she was only
listed as a driver on Cincinnati’s policy rather than a named
insured.
8