JEFFREY E. SCHOLES VS. STEPHEN M. HAUSMANN (L-0137-16, ESSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-0980-17T3

JEFFREY E. SCHOLES,

Plaintiff-Appellant,

v.

STEPHEN M. HAUSMANN,

Defendant-Respondent,

and

KIMBERLY A. LOGAN,

Defendant.
___________________________

Argued October 2, 2018 – Decided October 16, 2018

Before Judges Fisher, Geiger and Firko.

On appeal from Superior Court of New Jersey, Law
Division, Essex County, Docket No. L-0137-16.

Michael J. Maggiano argued the cause for appellant
(Maggiano, Digirolamo & Lizzi, PC, attorneys;
Michael J. Maggiano, of counsel and on the briefs;
Jeffrey M. Zajac, on the briefs).
 Patricia W. Holden argued the cause for respondent
(Cipriani & Werner, PC, attorneys; Matthew K.
Mitchell, of counsel; Patricia W. Holden, on the brief).

Gina M. Stanziale argued the cause for amicus curiae
Insurance Council of New Jersey (Methfessel &
Werbel, attorneys; Gina M. Stanziale, of counsel and
on the brief; Alicia C. Langone, on the brief).

John V. Mallon argued the cause for amicus curiae New
Jersey Defense Association (Chasan, Lamparello,
Mallon & Cappuzzo, PC, attorneys; John V. Mallon and
Ryan J. Gaffney, on the brief).

PER CURIAM

Plaintiff appeals from an order granting summary judgment to defendant

Stephen M. Hausmann ("defendant") and dismissing the complaint based on the

court's finding that plaintiff was uninsured within the meaning of N.J.S.A. 39:A-

4.5(a)1, and thereby barred from recovering damages for economic and non-

economic losses. We affirm.

I.

We consider the undisputed facts from the record and view them and all

reasonable inferences in the light most favorable to plaintiff. Brill v. Guardian

Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). On October 23, 2014, plaintiff

1
Plaintiff has not appealed the order granting summary judgment to defendant
Kimberly A. Logan on the issue of agency liability, and she is not participating
in this appeal.
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and defendant were involved in an automobile accident in South Orange and

plaintiff suffered injuries. The vehicle he was driving was titled and registered

in his name using a friend's address in Florida, despite plaintiff living and

working in New Jersey for approximately five years. He failed to obtain a New

Jersey driver's license or to register his vehicle in New Jersey. Plaintiff

acknowledges that his vehicle was principally garaged in New Jersey. The judge

found that plaintiff "provided false information to the State of Florida as to his

residency." At his deposition, plaintiff testified he continued to maintain his

"Florida automobile insurance because . . . Florida insurance was less expensive

than New Jersey insurance."

As a result of his injuries, plaintiff applied for personal injury protection

("PIP") benefits through his Florida Geico automobile insurance policy. The

Florida policy was not approved by the New Jersey Commissioner of Banking

and Insurance, and it only provided $10,000 per person in medical benefits

coverage.

Defendant moved for summary judgment, arguing N.J.S.A. 39:6A-4.5(a)

barred plaintiff's claims because the Commissioner did not approve his

insurance policy and therefore, he was uninsured under the statute. Based upon

plaintiff's misrepresentations, defendant also argued that insurance fraud was

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committed pursuant to N.J.S.A. 2C:21-54.6, which was enacted to prevent

reverse rate evasion. Plaintiff countered that N.J.S.A. 39:6A-4.5(a) violates

procedural due process because it provides no notice of the prohibited conduct

and does not distinguish between New Jersey and out-of-state insurance. We

disagree.

II.

Every owner of an automobile principally garaged in New Jersey must

maintain automobile liability insurance coverage under provisions approved by

the Commissioner, including mandatory medical expense benefits coverage of

$15,000 per person. N.J.S.A. 39:6A-3, -3.1, -3.3; see also Caviglia v. Royal

Tours of Am., 178 N.J. 460, 466 (2004) (stating that "[a]ll owners of motor

vehicles registered or principally garaged in New Jersey are required to maintain

minimum amounts of standard, basic, or special liability insurance coverage for

bodily injury, death, and property damage caused by their vehicles"); Martin v.

Chhabra, 374 N.J. Super. 387, 391 (App. Div. 2005) (stating "that because an

out-of-state insured vehicle was principally garaged in New Jersey, the owner

must maintain PIP coverage") (citing Chalef v. Ryerson, 277 N.J. Super. 22, 26

(App. Div. 1994)).

N.J.S.A. 39:6A-4.5(a) provides:

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 Any person who, at the time of an automobile accident
resulting in injuries to that person, is required but fails
to maintain medical expense benefits coverage
mandated by section 4 of P.L. 1972, c. 70 (C.39:6A-4),
section 4 of P.L. 1998, c. 21 (C.39:6A-3.1) or section
45 of P.L. 2003, c. 89 (C.39:6A-3.3) shall have no cause
of action for recovery of economic or noneconomic loss
sustained as a result of an accident while operating an
uninsured automobile.

The Legislature adopted N.J.S.A. 39:6A-4.5 in 1997 to limit the ability of

persons injured in motor vehicle accidents to sue persons responsible for their

injuries. Craig & Pomeroy, New Jersey Auto Insurance Law § 15:1 (2018).

"N.J.S.A. 39:6A-4.5(a) advances a policy of cost containment by ensuring that

an injured, uninsured driver does not draw on the pool of accident-victim

insurance funds to which he did not contribute." Caviglia, 178 N.J. at 471. The

1997 legislation limits a plaintiff's ability to sue when he or she has not complied

with the compulsory insurance law and "gives the uninsured driver a very

powerful incentive to comply with the compulsory insurance laws: obtain

automobile liability insurance coverage or lose the right to maintain a suit for

both economic and [non-economic] injuries." Ibid.

In order to find that plaintiff was required to maintain New Jersey medical

expense benefits coverage, it must be established that his vehicle was principally

garaged in New Jersey. To determine where an automobile is principally

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garaged, the pivotal factor is where the vehicle "is primarily or chiefly kept" or

"kept most of the time[,]" not where the owner intends to reside. Chalef, 277

N.J. Super. at 27 (citations omitted).

Since plaintiff primarily garaged his vehicle in New Jersey, he was

required to maintain automobile liability insurance coverage under provisions

approved by the Commissioner, including mandatory medical expense benefits

coverage of $15,000 per person. As noted by the judge, "the Deemer Statute2

cannot save the [p]laintiff's failure to obtain an insurance policy approved by

the State of New Jersey." Plaintiff had a Florida insurance policy that the

Commissioner did not approve, and the policy did not provide medical expense

benefits coverage of $15,000 per person. Consequently, N.J.S.A. 39:6A -4.5(a)

bars plaintiff's cause of action for recovery of economic and non-economic

damages sustained as a result of the accident.

We find no ambiguity in the statute that would offend plaintiff's

procedural due process rights. As recognized by the motion judge, implicit in

the goal of the statute is that New Jersey residents, and those who principally

garage their automobile in this state, are required to maintain automobile

insurance coverage approved by the Commissioner of Banking and Insurance .

2
N.J.S.A. 17:28-1.4.
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 To the extent we have not addressed plaintiff's remaining arguments, we

find them without sufficient merit to warrant discussion in a written opinion. R.

2:11-3(e)(1)(E).

Affirmed.

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