In Bencosme v. Kannankara, no. A-1672-14T3 (App. Div. Mar. 22, 2016), the New Jersey Appellate Division concluded that the apparent harshness of the decision was not a sufficient basis for it to refuse to affirm a trial court’s ruling that dismissed a personal injury lawsuit against a claimant who failed to carry statutorily required auto insurance, even though the claimant was uninsured as a result of fraud.
Federico Bencosme was involved in an auto accident with Joseph Kannankara in which Bencosme allegedly sustained injury. A month prior to the accident, Bencosme, who was previously insured under his mother’s auto insurance policy, sought to obtain his own auto insurance. To that end, Bencosme performed an internet search, called a company that advertised itself as an insurance broker, and scheduled a meeting with the “broker.” At the meeting, Bencosme paid the “broker” $150 in cash for six months of auto liability coverage. In return for this payment, Bencosme received an insurance identification card bearing the name “Proformance Insurance Company” and appearing to cover a six-month period. After the auto accident involving Kannankara, Bencosme learned that he had been the victim of a scam. The “broker” was a fraud and Bencosme had not received any auto insurance in return for the payments made to the “broker.”
Bencosme sued Kannankara for both economic and non-economic injuries as a result of the auto accident. Kannankara filed a motion for summary judgment, arguing that because Bencosme was without auto insurance at the time of the accident, his claims were barred by N.J.S.A. 39:6A-4.5(a). Section 6A-4.5(a) provides that any person who, at the time of an auto accident resulting in injuries to that person, is required but fails to maintain medical expense benefits shall have no cause of action for recovery of economic or non-economic loss sustained as a result of an accident while operating an uninsured auto. Because it was undisputed that, because of the fraud perpetuated on Bencosme by the “broker,” he was without the required insurance, the trial court granted summary judgment to Kannankara. Bencosme appealed.
Bencosme’s primary argument on appeal was that because he had acted in good faith in attempting to obtain the medical expense benefits, N.J.S.A. 39:6A-4.5(a) should not apply to him. The Appellate Division rejected this argument, and ruled that since the Legislature had not seen fit to create an exception to the statute for individuals who were not culpable in their uninsured status, the court would not “second guess” that decision.
The Appellate Division sought to buttress its holding by contrasting the language of sub-paragraph (a) of N.J.S.A 39:6A-4.5 with the language of sub-paragraph (c) of the statute. N.J.S.A 39:6A-4.5 (c) states that “[a]ny person acting with specific intent of causing injury to himself or others in the operation or use of an automobile shall have no cause of action for recovery of economic or noneconomic loss sustained as a result of an accident arising from such conduct.” After comparing the language of these two provisions, the Appellate Division held that the inclusion of the “specific intent” language in subsection (c) and the absence of any similar language in subsection (a) “manifests a legislative intention to bar the claims of uninsured motorists without regard to a motorist’s good faith belief regarding the status of his or her coverage.”
The Appellate Division further held that recognizing an exception to N.J.S.A 39:6A-4.5(a) for individuals who were unknowingly uninsured would be inconsistent with the statute’s purpose of reducing auto insurance costs and would also undermine its goal of streamlining the judicial process, since the court concluded that such an exception would result in litigation over whether the claimant was knowingly uninsured. Although the Appellate Division recognized that the consequences of its decision were harsh, the court noted that “[h]arsh consequences, however, do not permit a departure from the express language in the statute.”
Given the room for argument over the legal basis of the Appellate Division’s holdings, and the potential public impact of the court’s decision, Bencosme v. Kannankara may be a case that finds its way before the New Jersey Supreme Court in the near future.