(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Concetta Marotta v. New Jersey Automobile Full Insurance Underwriting Association (A-135-95)
(NOTE: This Court wrote no full opinion in this case. Rather, the Court's affirmance of the
judgment of the Appellate Division is based substantially on the reasons expressed in Judge
Kleiner's written opinion below.)
Argued April 30, 1996 -- Decided June 11, 1996
PER CURIAM
On October 5, 1987, Anthony Marotta and Concetta Marotta were residents of Philadelphia.
Anthony also owned a condominium in Wildwood, which the Marottas used regularly during the summer and
occasionally on non-summer weekends. On October 5, Anthony, representing himself as a New Jersey
resident, applied for a $500,000 single limit automobile liability insurance policy issued by New Jersey
Automobile Full Insurance Underwriting Association (NJAFIUA) by its servicing carrier, Liberty Mutual
Insurance Company. That policy was renewed on October 5, 1988.
On October 10, 1988, Anthony, while traveling to Philadelphia, struck a motor vehicle operated by
Jack Berk, in which Eileen Berk was a passenger. The Berk vehicle was insured by International Insurance
Company (International). The Berk vehicle also was insured under a business policy by American Insurance
Company (American). Both of the Berk's insurance policies provided uninsured/underinsured (UM/UIM)
motorist coverage with policy coverage limits less than the liability insurance coverage limits insuring the
Marotta vehicle.
In June 1989, the Berks filed a complaint against Anthony Marotta in the Court of Common Pleas
in Philadelphia, seeking compensatory damages. The NJAFIUA, through Liberty Mutual, answered that
lawsuit, which is still pending.
Thereafter, based on its investigation, NJAFIUA concluded that Marotta had misrepresented facts
that it contended rendered Marotta ineligible for a policy of liability insurance issued by NJAFIUA.
NJAFIUA contended that Marotta was not a "qualified applicant" because his motor vehicle was not
registered or principally garaged in New Jersey, and that his domicile was in Pennsylvania. Therefore,
NJAFIUA filed a declaratory judgment action seeking to avoid all claims against the policy of liability
insurance it had issued Marotta, or alternatively, to limit the extent of insurance coverage to the statutory
mandatory compulsory insurance of $15,000 per person, $30,000 per accident and $5,000 in property damages
pursuant to N.J.S.A. 39:6A-3 of the New Jersey Automobile Reparation Reform Act and N.J.S.A. 39:6B-1 of
the Compulsory Motor Vehicle Insurance Act.
At the conclusion of discovery, NJAFIUA filed a motion for summary judgment. International and
American filed separate cross-motions for summary judgment, seeking an order declaring that NJAFIUA's
entire policy limit of $500,000 must be provided to indemnify Marotta against the Berks' pending claims.
The motion judge denied NJAFIUA's motion but granted summary judgment on both International's and
American's cross-motions.
NJAFIUA appealed. The Appellate Division affirmed that portion of the summary judgment order imposing liability on NJAFIUA. The court, however, reversed the decision of the motion judge, concluding that NJAFIUA must indemnify Marotta only to the extent of its compulsatory insurance required by N.J.S.A. 39:6A-3 and N.J.S.A. 39:6B-1. Both of those statutory provisions contain identical language: "every owner or
registered owner of an automobile registered or principally garaged in this State shall maintain automobile
coverage." The mandated coverage is $15,000 per person, $30,000 per accident, and $5,000 for property
damage.
The Appellate Division noted that under N.J.S.A. 39:6-48, an automobile insurer cannot, on the
ground of fraud or misrepresentation relating to the inception of the policy, retroactively avoid coverage
under a compulsory or financial insurance law so as to escape liability to a third party. Section 48 also
provides that a liability carrier may plead against a judgment creditor of its insured any defense that the
insurance carrier had against its insured when the judgment creditor seeks to recover any sum in excess of
mandatory insurance coverage. However, no defense is available to the insurance carrier for the mandated
insurance coverage. Based on that statutory language, the Appellate Division determined that NJAFIUA
owes an obligation to provide indemnity to Marotta against the Berks' claims equivalent to New Jersey
compulsory insurance law, which established the NJAFIUA. The court reasoned that a driver like Berk has
the right to expect that all other drivers will be insured to the extent required by compulsory insurance. If
additional protection is required, the vehicle owner may purchase UM/UIM coverage through his or her own
insurance company. Because the Berks aquired additional protection, the Appellate Division found that the
Berks may look to their own carriers for the payment of any claims that exceed the non-cancellable coverage
on the Marotta vehicle.
The matter was remanded to the trial court to determine the extent of insurance coverage. The
Appellate Division noted that if it is ultimately determined on remand that NJAFIUA was entitled to
retroactively void its policy as issued to Marotta, then insurance coverage will be $15,000 per person, $30,000
per occurrence and $5,000 property damage. However, if the NJAFIUA is unsuccessful in establishing its
right to retroactively void the policy, then the $500,000 single limit is applicable.
The Supreme Court granted the NJAFIUA's petition for certification.
HELD: Judgment of the Appellate Division is AFFIRMED substantially for the reasons expressed in Judge
Kleiner's opinion below. Retroactively voiding an automobile insurance policy for misrepresentation
would render the NJAFIUA responsible for mandatory minimum compulsory liability coverage in
the amount of $15,000 per person, $30,000 per occurrence and $5,000 for property damage.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI,
STEIN and COLEMAN join in this opinion.
SUPREME COURT OF NEW JERSEY
A-
135 September Term 1995
CONCETTA MAROTTA,
Plaintiff,
v.
NEW JERSEY AUTOMOBILE FULL
INSURANCE UNDERWRITING ASSOCIATION,
by and through its Servicing
Carrier Liberty Mutual Insurance
Company,
Defendants.
NEW JERSEY AUTOMOBILE FULL
INSURANCE UNDERWRITING ASSOCIATION,
by and through its Servicing
Carrier, Liberty Mutual Insurance
Company,
Plaintiff-Respondent,
v.
ANTHONY J. MAROTTA, CONCETTA
MAROTTA, INTERNATIONAL INSURANCE
CO. (a/k/a Crum & Forster Personal
Insurance), and THE AMERICAN
INSURANCE CO. (a/k/a FIREMAN'S FUND
INSURANCE COMPANIES).
Defendants,
and
JACK BERK and EILEEN BERK,
Defendants-Appellants.
Argued April 30, 1996 -- Decided June 11, 1996
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
280 N.J. Super. 525 (1995).
Eric S. Plaum argued the cause for appellant.
Laurie Harrold Rizzo argued the cause for
respondent (Slimm & Goldberg, attorneys).
PER CURIAM
The judgment is affirmed, substantially for the reasons
expressed in the opinion of the Appellate Division, reported at
280 N.J. Super. 525 (1995).
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN,
GARIBALDI, STEIN and COLEMAN join in this opinion.
NO. A-135 SEPTEMBER TERM 1995
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
CONCETTA MAROTTA,
Plaintiff,
v.
NEW JERSEY AUTOMOBILE FULL INSURANCE
UNDERWRITING ASSOCIATION, etc.,
Defendants.
NEW JERSEY AUTOMOBILE FULL INSURANCE
UNDERWRITING ASSOCIATION, etc.,
Plaintiff-Respondent,
v.
ANTHONY J. MAROTTA, et al.,
Defendants,
and
JACK BERK and EILEEN BERK,
Defendants-Appellants.
DECIDED June 11, 1996
Chief Justice Wilentz PRESIDING
OPINION BY Per Curiam
CONCURRING OPINION BY
DISSENTING OPINION BY