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It is best to purchase your own UM/UIM coverage



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Statue limits its effect

IN Scott C. Malzberg, a/k/a Scott Malzberg v. Caren L. Josey, James River Insurance Company, Portier, LLC and Rider Insurance Company, A-2883-20, Superior Court of New Jersey, Appellate Division (September 27, 2022) Scott C. Malzberg appealed from the Law Division decision granting summary judgment in favor of defendant James River Insurance Company (James River), dismissing plaintiff’s claims for underinsured (UIM) motorist coverage. The case involved an issue of first impression on the scope of the Transmission Network Undertaking Safety and Oversight Act (TNCSRA or the Act).

Plaintiff was injured in a motor vehicle accident while operating his motorcycle as an Uber Eats driver. The only legal issue raised by the appeal is whether the law — which requires “transportation network companies” (TNCs) to provide at least $1.5 million in underinsured motorist coverage — applies to food delivery services, such as Uber Eats.

When the district court granted the judgment dismissed, the district court held that the law only regulates companies that use a digital network such as a mobile phone application (app) to connect a “rider” to a “predetermined trip” and that the law only applies to predetermined transportation of people and not to delivery of food. The court found that nothing in TNCSRA’s statutory text or legislative history suggested that the Legislature intended to regulate app-based food delivery services.

Plaintiff registered with defendant Portier, LLC (Portier) to use his personal vehicle – a motorcycle – to deliver food. The Uber Eats app enables food delivery service providers and restaurants to connect with each other to fulfill orders placed by consumers.

On August 17, 2017, Plaintiff was delivering food to Uber Eats when a vehicle driven by Defendant Caren L. Josey (Josey) collided with Plaintiff’s motorcycle. The plaintiff was thrown from the motorcycle and sustained significant injuries that required multiple surgeries.

Josey was insured by CURE Auto Insurance with bodily injury liability coverage limited to $15,000 per person and $30,000 per accident. Plaintiff’s damages exceeded the limits of Josey’s personal auto insurance policy. Portier had obtained corporate auto insurance from James River to protect it from liability resulting from Malzberg’s actions.

However, the James River policy defines an “insured” to include “delivery drivers” who have entered into an agreement to use the “UberPartner Application” and who have logged into the “UberPartner Application” but have not provided underinsured motorist benefits.

A stipulation of dismissal with prejudice was filed with defendant Rider Insurance Company on June 29, 2020.

ANALYSIS

The New Jersey Supreme Court has clearly stated that “[t]the overarching goal of all statutory interpretation ‘is to determine as best we can the intent of the legislature, and to effectuate that intent’.” State v. SB, 230 N.J. 62, 67 (2017). Accordingly, in determining the Legislature’s intent, the Court looks to the language of the statute and gives those terms their plain and ordinary meaning because the best indicator of that intent is the plain language chosen by the Legislature.

The core question is whether the law regulates app-based food delivery services or is instead limited to regulating companies and drivers who arrange and provide transportation services for passengers.

The charter

“Transportation network company” means a corporation, partnership, sole proprietorship, or other entity that is registered as a corporation in the state or operates in this state, and that uses a digital network to connect a transportation network operator to a transportation network operator to provide a predetermined trip. “Transportation Network Driver” or “Driver” means a person who accepts connections to potential riders and related services from a transportation network company in exchange for payment of a fee to the transportation network company, and who uses a personal vehicle to offer or provide a predetermined ride to a driver when connecting through a digital network controlled by a transport network company against compensation or payment of a fee.

Above all, nothing in the law refers to the delivery of food. The absence of any reference to food delivery in the definition section stands in stark contrast to the interrelated definitions which expressly and repeatedly refer to “rides” and “riders”, which clearly denote the transportation of human passengers.

The absence of any reference in the definition section to any vehicles carrying goods rather than passengers supports the Court’s conclusion that in enacting TNCSRA the Legislature was only concerned with vehicles while they are used to transport persons.

Apart from the definition section, the entire text of the law contains only one explicit reference to services involving the transport of people other than people, and that reference is made in connection with explaining what transport network companies and drivers must not do if they are to stay within the scope of the law.

In sum, the Court concluded that the primary question presented in this case is easily resolved by a plain text analysis. The statutory system regulates comprehensive app-based services that provide rides to human passengers. As the court emphasized, nothing in the statutory text mentions, let alone comprehensively regulates, the delivery of food. In these circumstances, the court did not need to consider extraneous sources to determine legislative intent.

The Court of Appeal found further external support for its interpretation of the law in the regulations issued by the MVC.

Ultimately, it is for the Legislature, not the trial or appellate courts, to fill the void referred to by the plaintiff when the statute does not treat those who deliver food, like the plaintiff, rather than those who deliver people.

The Court of Appeal declined to weigh in on whether the current legislation supports or undermines the plaintiff’s argument in this appeal. Relying on proposed or pending legislation to interpret existing laws is of little value. There is no value in bills that have not been enacted into law. The TNCSRA in its current form is not applicable to the circumstances of this case.

The suit was imaginative and provided interpretations of a statute that is limited to persons who deliver people not food or other products. Malzberg, through his employer, had liability coverage and, if he wanted coverage, could have purchased UM/UIM coverage for himself. Neither he nor his agency/employer did. He conveniently could not get the court to expand the meaning of a statute by proposition. Insurance is not a right it is a choice.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to serving as an insurance consultant specializing in insurance coverage, insurance claims management, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims attorney and more than 54 years in the insurance industry. He can be reached at http://www.zalma.com and zalma@zalma.com. Subscribe and receive videos limited to Excellence in Claims Handling subscribers at locals.com https://zalmaoninsurance.locals.com/subscribe.Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.

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