Plaintiff Barred from Collecting PIP Benefits Due to the Ownership of Uninsured Vehicle

Plaintiff, Vidal Padilla, was involved in a 2014 accident while operating his nephew’s car. He submitted a PIP application for his injuries to defendant Personal Service Insurance Company, which insured his nephew’s vehicle. The defendant insurance company contended that the plaintiff was barred from obtaining PIP benefits due to his ownership of an uninsured motor vehicle. The issue in Padilla v. Personal Service Insurance Co., 2016 N.J. Super. Unpub. LEXIS 1400 (App. Div. June 20, 2016), was whether the vehicle owned by the plaintiff qualified as an “inoperable” vehicle so as to avoid this exclusion for PIP coverage.

Although plaintiff owned a 1979 Chevrolet Camino pickup truck at the time of the accident, he claimed that it was not operational at that time. Plaintiff nevertheless kept the plates on the vehicle, maintained the registration but did not have insurance covering the vehicle.

Under New Jersey law, a vehicle owner is required to maintain compulsory insurance if he or she “operates or causes to be operated a motor vehicle upon any public road or highway in this State.” The New Jersey PIP statute permits an insurer to deny coverage to any person having injuries or death who “was the owner or registrant of an automobile registered or principally garaged in this State that was being operated without personal injury protection coverage.”

The carrier, relying on this statute, denied coverage, contending that the plaintiff was a “culpably uninsured driver.” The plaintiff argued that his vehicle was inoperable at the time of the accident and, hence, this exclusion did not apply to him. The plaintiff claimed that the vehicle had been in an accident that damaged its transmission and wheel well, which rendered it not operational on the accident date.

To prove that the vehicle was inoperable, however, the plaintiff would need to show an intent not to operate this vehicle. Here, the facts showed that his pickup truck was operable and he drove it around his driveway. He had it repaired so it would not be stuck and had his mechanic drive the vehicle around to determine if it needed transmission repairs. However, the court found most significant, that despite its lack of insurance, the plaintiff did keep the plates on the vehicle and kept it registered.

Based upon all of these facts, the Appellate Division found that the vehicle was “operational” at the time of the accident. Hence, the plaintiff was required to maintain PIP coverage for the vehicle. Accordingly, the carrier properly disclaimed coverage and summary judgment should have been entered in its favor, dismissing the complaint.

Tags: PIP