An out-of-state driver whose insurance carrier does not do business in New Jersey cannot invoke the verbal threshold as a defense in a New Jersey lawsuit over an accident that occurred in New Jersey.

The plaintiff, a Pennsylvania resident, sued the defendant for alleged damages resulting from the defendant rear-ending the plaintiff’s truck in New Jersey. Both parties were residents of Pennsylvania and were covered by automobile insurance policies written in that state. The plaintiff was insured by an insurance company that was authorized to do business in New Jersey, while the defendant's insurance carrier was not. The defendant had moved for summary judgment, asserting that the plaintiff's injuries did not satisfy the limitation-on-lawsuit threshold under N.J.S.A. § 39:6A-8(a) and, therefore, the plaintiff could not recover damages for pain and suffering. The trial court determined the limitation-on-lawsuit threshold applied to the plaintiff by reason of the Deemer Statute because he did not have a qualifying injury. The New Jersey Supreme Court reversed the trial court’s ruling in the defendant's favor and remanded the case. The Supreme Court held, "An out-of-state defendant who is not eligible to receive New Jersey PIP benefits cannot find shelter under N.J.S.A. 39:6A-8(a) and may be sued for pain and suffering damages without regard to the threshold." It is the same whether the driver is from New Jersey or out-of-state. "Had a New Jersey resident, rather than plaintiff, selected the insurance policy's limitation-on-lawsuit option, and were defendant the tortfeasor, defendant would be in the same position." The defendant “could not invoke the threshold as a defense because she is not participating in New Jersey's no-fault system of PIP benefits."

Case Law Alert - 1st Qtr 2010