Felix v. Richards, 241 N.J. 169 (2020). This ruling of the Supreme Court today saw only five Justices participating since Justices Patterson and Timpone were recused. The remaining five Justices split 3-2. Justice LaVecchia wrote the majority opinion, in which Chief Justice Rabner and Justice Albin joined. Justice Fernandez-Vina, joined by Justice Solomon, dissented.
The case involved New Jersey’s “deemer” statute, N.J.S.A. 17:28-1.4. That statute implements New Jersey’s statutory scheme that requires insurers who choose to write automobile insurance policies in New Jersey to comply with certain minimum requirements for those policies. “Under the standard policy, the insurer must provide the insured with, in pertinent part, at least $15,000 per person/$30,000 per person in bodily injury liability coverage (BI),” Justice LaVecchia noted.
The deemer statute, however, reaches beyond New Jersey to policies written in other jurisdictions by insurers who sell policies in New Jersey. The statute seeks to “ensure that New Jersey residents injured as a result of an accident with an out-of-state vehicle will have recourse to policies of insurance that are at least as broad as the presumptive minimal limits of a New Jersey insurance policy.” Irrespective of the actual terms of an out-of-state policy, that policy is “deemed” to meet New jersey’s minimums.
In the time since the deemer statute came into effect, the Legislature created two forms of auto insurance coverage that did not include BI: a “basic” policy and a “special” policy. Eligible insureds may satisfy New Jersey’s mandatory insurance requirement by purchasing those BI-less policies.
In today’s case, the named parties, Felix and Richards, had been in an accident. Felix was insured by Government Employee Insurance Company (“GEICO”) under a policy written in Florida. Richards was insured by AAA Mid-Atlantic Insurance Company under a New Jersey policy. The parties engaged in and then settled their lawsuit.
The actual case before the Court involved the claim of GEICO that the creation of the basic policy reduced the amount deemed to be covered by an out-of-state policy to the level of the basic policy. That is, as Justice LaVecchia put it, “the insurer would have no obligation to provide any BI because the basic policy does not contain any required BI.” AAA contested that, and the two insurers filed motions for summary judgment. The Supreme Court majority disagreed with GEICO, affirming decisions of the Law Division and Appellate Division below.
Justice LaVecchia found that the plain language of the deemer statute decided the issue. The explanation of that plain language was somewhat detailed, and readers should review the majority opinion in full. But the bottom line is that the Legislature referred in one place to the basic policy but did not do so in another, the one that counted here. Since that difference must be presumed to have been deliberate, GEICO’s argument failed.
The majority then analyzed legislative history of the deemer statute. Justice LaVecchia found that that history aligned with the outcome that the majority reached.
GEICO asserted that a ruling against it would violate its constitutional right to equal protection. GEICO sought to compare “a New Jersey authorized insurer that writes in New Jersey to another New Jersey authorized insurer that writes in New Jersey and also writes in other states.” The former can write a basic policy, with no BI, but the latter (due to the deemer statute) cannot.
Justice LaVecchia was not persuaded. The two types of insurers were treated identically, being required to provide minimum compulsory insurance limits. Consumers have a choice to buy lesser coverage, but no consumer was involved here, just GEICO, an insurer.
The dissenters agreed with GEICO’s equal protection argument. “New jersey insureds are not required to have BI coverage themselves, and requiring out-of-state insurers to provide more coverage when their insureds enter the state distinguishes unconstitutionally between in-state and out-of-state drivers.” But that view did not achieve a majority of votes today.