Volume 3 E-bulletin

E-Bulletin

And we wonder why New Jersey auto rates are so high...

Once again, the New Jersey Appellate Division has demonstrated why Automobile Insurance rates in New Jersey are out of control. While the media and public pressure focuses its attention on limiting recovery for legitimate injuries, the public remains virtually unaware of the sequence of decisions emanating from our court which extends coverage to virtually any circumstance...after all...in New Jersey, that's what insurance is for.

The latest episode from the Appellate Court is Jaquez v National Continental, in which the "initial permission rule" has been stretched beyond recognition. In Jaquez, Erica Rochester drove her boyfriend to his sister's (Mildred's) house. She parked her car and locked it. Mildred's son (Ribot) asked Rochester for a cigarette, but Rochester had left them in her car. She gave her car keys to Ribot for the purpose of getting her cigarettes. Ribot not only took the keys, he took the car, apparently on a joy ride. Within minutes, Rochester realized the car was missing and called the police and reported that the car had been stolen. Apparently, Ribot had driven the car a short distance and become involved in an accident with another car causing injuries to the driver and passenger of that car, Loperena and Jaquez. Ribot was arrested but ultimately not charged for the theft of the car.

Jaquez and Loperena both sought compensation for their injuries, but State Farm, Rochester's insurer, denied coverage. Jaquez and Loperena each collected $17,500 under their Uninsured Motorist coverage with National Continental who then sought reimbursement from State Farm. On cross motions for summary judgment, the trial court agreed with State Farm, concluding that Ribot did not have permission to drive the vehicle. However, the Appellate Division saw it differently. After reciting the history of the expansion of the initial permission rule, the Appellate Court concluded that Rochester "definitely" gave Ribot permission to "use" the car, even though that permission extended only for the purpose of opening the door to get the cigarettes. The court concluded that there was no evidence that Ribot intended to permanently deprive Rochester of her car. The court concluded that there was no evidence that Ribot had even intended to temporarily deprive Rochester of her car because " Ribot knew that Rochester was expecting him to return with cigarettes. Therefore Ribot could have assumed that, if he had returned reasonably quickly, Rochester would not have some outside... to use the car." The court ignored the fact that Rochester called the police as soon as she realized the car was missing, but instead relied on what Ribot could have assumed. How would the court react to a parking lot attendant, who is given permission to park the car, taking the car on a "Ferris Bueller" type joy ride, who seeks coverage because the owner of the car had said that they would be leaving the car for a few hours.

While one must question the foresight of the insurers for allowing this dispute to reach the precedent setting level of the New Jersey Appellate Division (especially given the modest amount of the claim), the court's prospective and hidden agenda is made clear by the court's comment that a construction against coverage would be inconsistent with the "strong legislative policy which would assure financial protection to innocent victims of automobile accidents" ( in other words...that's what insurance is for) which completely ignores both the fact that the innocent victim had been fully compensated by her uninsured motorist coverage and the far longer standing legal principal of personal responsibility for one's illegal and improper conduct.