*1 conviction, however, tion to enter a preclude should not admissi- bility of plea defendant’s as an By signing admission. fine, paying summons and defendant admitted that she had committed the driving. offense of careless judgment Appellate affirmed, Division is and the matter is remanded to the Law Division. For and remandment —Chief Justice WILENTZ affirmance CLIFFORD, HANDLER, POLLOCK, O’HERN,
and Justices GARIBALDI and STEIN—7.
Opposed—None.
William, (Han respondent argued the cause for Bigham J. Weisman, attorneys). noch opinion of the Court was delivered
HANDLER, J.
Respondent, Cynthia Bigham, in an automobile was involved fault, being charged only accident. Not at she was license, pled paid guilty with an to which she conviction, required she small fine. Because of that was also pay per year an $100 automobile years. imposed by three Division regulation adopted by Motor Vehicles under a the Commission- pursuant er of Insurance to the Merit Plan of the New presented by Insurance Reform Act of 1982. The issue *3 appeal surcharge persons this is whether such a on convicted driving authority without a valid license exceeds the statute and is therefore invalid.
I. 8, 1985, respondent, driving had an unblemished July On who record, in an automobile accident. When the was involved arrived, expired police produced she a driver’s license that had previously. charged a six months As result she was under expired driving Respon- with an license. N.J.S.A. 39:8-10 from dent claimed that she had not received renewal notice (“DMV”) the Division of Motor and was unaware that Vehicles Nonetheless, expired. July her license had she pled guilty to the and was fined ten dollars. The Municipal Court notified the DMV of that conviction. There- 13:19-13, after, pursuant to the DMV mailed an insur- N.J.A.C. surcharge respondent charging per year her ance bill to $100 years. for three and, hearing,
Bigham requested a
after an unsuccessful
conference,
settlement
the matter was transferred
Office
Judge
The
Law
con-
of Administrative Law.
Administrative
sidered the matter on the
testimony,
record without
and con-
surcharge
cluded that the
was invalid. He believed that the
purpose of
the New
Insurance Reform Act was to “set
up
rating
a merit
plan
surcharge
and an
system
accident
penalize poor
order to
drivers and to ensure that automobile
equitable
will be more
to the motorists of New
Jersey,”
unknowingly driving
and that
expired
with an
license
was not sufficiently
justify
serious to
surcharge.
such a
(“Director”) rejected
decision,
Director of the DMV
con-
struing
nonpenal
scheme as
in nature and auto-
matic on conviction of covered violations. The Director con-
firmed the
suspended respondent’s driving
privi-
leges indefinitely until
paid.
it was
Appellate
Director,
Division
determining
reversed the
that N.J.A.C. 13:19-13.1
the authority
exceeded
of the Act and
Bigham’s
conviction under
trig-
N.J.S.A. 39:3-10 could not
ger
surcharge.
non-point
court reasoned that the
offense
driving
license,
opposed
with an
as
without
licensed,
having
ever
sufficiently implicate safety
been
did not
concerns and was therefore not the kind of
contem-
offense.
plated by
Legislature
establishing
the Merit
Plan
under
Accordingly,
regulation
the Act.
it ruled that the
applied
invalid as
to a safe
respondent.
driver such as
granted
certification,
This
petition
Court
the DMV’s
(1989),
regula-
N.J.
II. 1982, The Insurance Reform Act of 17:29A-33 N.J.S.A. dispute (“Act”), at the time this arose.1 to -47 in effect was complying with the legislation That altered the mode of by replacing the then- statutory compulsory-insurance mandate Insurance Underwrit- existing Assigned Risk Plan with the Full (“JUA”). objective of the primary JUA ing Association to those drivers unable to extend automobile insurance legislative scheme also voluntary it in market. The obtain replacing premium inequities by sought to reduce insurance companies surcharges previously by private insurance assessed Rating Plan. Under the Merit with the New Merit Plan, all drivers who accumu- Rating the DMV levied fees on under Title 30 points for motor vehicle offenses late six or more a driving under 39:4-50 or or are convicted of drunk N.J.S.A. 17:29A-35b(l), jurisdiction. similar offense another N.J.S.A. however, 1984, (2). to authorize The Act was amended (“Commissioner”) impose sur- of Insurance Commissioner points not for which do charges for motor-vehicle violations 17:29A-35b(3)(b). 1984, 1, 2; Pursuant attach. A. c. N.J.S.A. § Commissioner, amendment, in consultation with to that 13:19-13.1, DMV, specifi- promulgated N.J.A.C. Director imposing surcharges persons convicted under N.J.S.A. cally 39:3-10, driving public highways on the without a motor vehicle license, provides non-point regulation a valid violation. surcharge annually three-year for a of that assessment period. 13:19-13.2. N.J.A.C. determining exceeded the
In
whether
Commissioner
first
statutory grant
authority,
we are remitted
recently in
v.
language
As we said
State
statute.
(1989),
83, 101,
guage predicate does not describe violations in terms of wheth- they implicate er involve or driving safety. It nevertheless interpretation reasoned that an recognize that fails to such a contrary qualification legislative purpose. intent and Appellate surchargable Division reasoned that other of- fenses expressly identified in the Plan Merit could be implicate safety. said to appropriately Such offenses are they directly for insurance engender basis because generation higher insurance claims and thus relate to the Assuming operating costs for the JUA. then failure safety, renew a driver’s license is unrelated is thus a offense, Appellate non-cost-related Division determined that such an not offense would fall within the class violations of enabling provision, 17:29A-35b(3). We not N.J.S.A. are *6 however, underlying the legislative that the intent
persuaded,
exclusively on of-
inexorably
focuses
and
statute is one that
safety, and
find no
directly implicating traffic
hence we
fenses
surcharga-
concluding
impliedly
the
limits
for
statute
basis
involving
safety.
traffic
only to those
ble violations
history
the Act is
legislative
A
of the
of
review
determining legislative
Wright,
intent.
v.
instructive in
State
Madden,
488, 496-97,
(1987);
61
527 A
379
v.
107 N.J.
.2d
State
(1972). An
of
appreciation
[Senate Industry Statement, L.1983, 65, at N.J.S.A. reprinted 17:29A-33.] sponsors suggested widespread further that coverage at by leveling reasonable rates would be obtained the rates for residual recouping through insureds and JUA losses the sur- charge system. As explained, Ibid. then-Governor Kean also system law will make our automobile insurance more “[t]his equitable by flattening fees, by taxes and administrative and instituting surcharge system by for bad drivers.” Statement Kean, Hon. Thomas H. A. c. 65. Rating scheme of the Merit designed Plan was provide necessary funding for the JUA and to alleviate
disparate surcharges by implementing a uniform dollar scale to be levied for violations of motor-vehicle laws. See Clark v. Vehicles, Jersey New Div. Motor 211 N.J.Super.
654 (“The Rating merely Plan (App.Div.1986) .2d Merit
512 A 588 gives responsibility of as the Division of Motor Vehicles manner, in a sessing surcharges high for risk drivers uniform industry surcharge previously opposed as to the area-based existence.”). sponsors explained Plan was intend surcharge system rating a “uniform merit based ed to establish longer vary by surcharges certain criteria will no on [so that] residency.” on classification of motorists or the basis See Insurance, Karcher, Auto New Overview No-Fault Lawyer: Jersey the New State Bar Associa Jersey Journal of tion, 1985) (“It Reform Act (May be noted should motor vehicle convictions not create new does accidents; surcharge system previously used it reforms the companies. It is to be uniform within each by the insurance company regard the classification of the insured or resides.”). To the extent that monies collect where insured sources, scheme, including all were ed from JUA, Act offset sustained insufficient to losses permitted equalization charge residual market to be levied state, effectively shifting virtually every insured in the vehicle all of the financial burden of residual insurance to some Labor, Industry in the State. See Senate and Professions Statement, L. c. 65. Committee Plan New insureds are sur- Under Merit charged equally comparable Title 39 violations overall specifies minimum records. 17:29A-35b *8 N.J.S.A. surcharges to levied on drivers who accumulate amounts points year each the six or more motor-vehicle driver possesses points, persons convicted of DWI annual- such and on (2). 17:29A-35b(l), ly three-year period. The for a N.J.S.A. modify is authorized to set and to the actual Commissioner noted, to surcharges. of Ibid. As the amendment amounts granted authority in Act 1984 also Commissioner violations or convic- impose based on motor-vehicle carry point assessments. 17:29A- tions that do not N.J.S.A. Moreover, 35b(3)(b); 1, legislation c. con- see A. § enabling tained broad clause that authorized the Commission- adopt er to “any regulations rules necessary appropriate or purposes effectuate the of this section.” 17:29A- N.J.S.A. 35e. challenged regulation, 13:19-13.1, promul- N.J.A.C.
gated against backdrop this under authority. this That regulation imposes surcharges of different amounts for four distinct of driving violations Title 39: while privileges license suspended; are failure to have insurance on a bicy- motorized cle; failure maintain liability vehicle; insurance a motor case, and the violation involved in this unlicensed under summary proposed N.J.S.A. 39:3-10. The to the explained: rule Surcharges are levied for motor serious vehicle violations for which points * * * are not assessed and which are not dealt with Act. specifically existing of addition these offenses reflects insurance industry practices being surcharged because of the violations many new rule are proposed subject currently increases. premium (Jan. N.J.R. 1984).] [16 impact statement social further indicated that the rule has impact “by assessing a beneficial social surcharges for serious motor vehicle offenses those who violate the [so that] safety traffic financially responsible laws for the in- [are] creased of insurance.” costs Ibid.
Thus, emerges significant what is the central idea that motor- vehicle offenses should imposition be deemed the basis for the Those, of an surcharge. according Legisla- to the ture, only carrying could include not point offenses assess- and, therefore, not, safety ments more often than traffic con- cerns, offenses, non-point but which nonetheless could be con- they implicate sidered “serious” responsibility. because driver subsequent Consistent with that notion is the fact that 13:19-13.1, promulgation Legislature N.J.A.C. amended specifically sign Title 39 to remove the offenses of failure to notify license and failure to change the DMV a name from coverage placed of N.J.S.A. 39:3-10 and them under N.J. statutorily S.A. 39:3-9a because those are exempt offenses surcharges. 39:3-9a; Law, from N.J.S.A. see Senate Public
656 Statement, L.1988, 8,
Safety
reprint
c.
and Defense Committee
place driving
without a
at
39:3-9a. It thus left
ed N.J.S.A.
eligible for insurance-sur
license
a motor-vehicle offense
as
respond
to
to an administrative
treatment. Failure
implied
regulation
recognition that
ex
can constitute “an
[it]
County
v.
legislative meaning.”
Monmouth
presses
Matawan
(1968). In
Taxation,
is neither offenses, non-point surchargeable re- four which enumerates “existing industry practices.” Prior insurance flects regularly private companies Act of Reform *10 being levied for the driver, offense of an unlicensed differing albeit in amounts. Report, supra, See Chairman’s at Thus, directly those most statutory affected and regulatory scheme—drivers and might automobile insurers — reasonably consider an unlicensed driver to an irresponsible one and have committed a “serious legislative offense.” A judgment reflecting experience perception that and is at once unsurprising and understandable.
Accordingly, we find that N.J.A.C. 13:19-13.1 does not exceed enabling legislation designed to effectuate the goal broader financing of the JUA in an regula- evenhanded manner. The tion includes driving license, the offense of under a lapsed driving suspended license, with a driving and without insur- ance. Arguably, N.J.A.C. 13:19-13.1. committing any a driver of those offenses do could so directly under circumstances not posing safety operation a threat in the actual of the motor Nevertheless, vehicle. in terms of the broader reaches Title encourage 39 to driver responsibility safety, as well as regulation strongly supports goal. such a
III. judgment Appellate reversed, of the Division is and the order of the Director of the Division of Motor Vehicles reinstat- ed.
STEIN, Justice, dissenting. upholds regulation
The Court a of the Division of Motor (DMV), 13:19-13.1, Vehicles imposition N.J.A.C. that authorizes an per year automobile-insurance $100 years three on a driver who committed a motor-vehicle $10 allegedly infraction to safety disagree. unrelated I concerns. Respondent spotless had maintained driving a record for years almost nineteen a when she received summons license, an contrary plead- to N.J.S.A. 39:3-10. She guilty paid fine, ed $10 but contends that her violation she entirely asserts that did not receive
was innocent. She informing her her application the DMV that renewal from expire. She claims about to also that driver’s license was she, past; applications that had sent such renewal DMV drivers, virtually relied on the renewal like all other licensed expiration her impending application to inform her license; consequently expi- she unaware improper argues that it under had occurred. ration She pay require her to an insurance sur- circumstances those surcharges is to make bad purpose of such because *11 comprehensive system fund of insurance. the State’s drivers regulation on the basis that it majority sustains the statutory policies stabilizing the of insurance rates furthers view, disregards the surcharges. my In the Court equalizing surcharges support to the Joint statutory policy basic that (JUA) paid only by Underwriting are to be unsafe Association drivers. Plan, L.1968, 385, Assigned the c. and the Merit
Both Risk it, Plan, 17:29A-35b, institu Rating which amended N.J.S.A. higher that account for tionalize the actuarial considerations high-risk rates for low-risk drivers. rates for drivers and lower states, objective of the JUA was majority primary As the “the to to those drivers unable extend automobile insurance 650, 575 2d at voluntary it market.” Ante at A. obtain added). (emphasis animating principle plans 869 both likely in car who are most to be involved that those drivers New pay higher insurance rates. Under the accidents should (Reform Act), 1983, L. Jersey Reform Act of 1982 c. Insurance accidents, 65, surcharges against those who have are levied 17:29A-35a, “points” their those who accumulate N.J.S.A. drivers, 17:29A-35b(l)a, licenses, drunk N.J.S.A. driver’s categories clearly Those share 17:29A-35. N.J.S.A. posing higher risk of involvement the characteristic accidents.
659
demonstrates,
majority
sought
As the
the Reform Act
inequities
apparent
correct
and inefficiencies that had become
operation
in the
of the comprehensive
system
insurance
under
Assigned
Thus,
majority
Risk Plan.
observes
purpose
inequities
of the Reform Act
reduce
was “to
insurance
by replacing premium surcharges previously
by pri
assessed
companies
vate insurance
New Jersey
Merit
650,
Plan.” Ante at
575
A.2d at
That reform of the
surcharges
more, however,
mechanism implementing
for
did no
than
of meeting
statutory
the mode
compulsory-in
“alter[ ]
* *
650,
surance
*.”
(empha
mandate
Ante at
The Act the Commissioner of Insurance after Director, impose “surcharges consultation with DMV *12 motor vehicle violations and convictions for which motor vehicle points power are not assessed.” 17:29A-35. That N.J.S.A. consistently must be exercised both the amend- narrow atory purpose the Reform and with Act the fundamental legislative surcharges theme restricts to bad drivers. regulation challenged by respondent was one several pursuant proposed by the Commissioner in 1989 Reform to'the safety They Act. See 16 124-25. All address N.J.R. concerns. impose surcharges driving suspended, for for failure to while liability maintain motor motorized on a vehicle or bicycle, any resulting fatality, for motor-vehicle violation a driving for drunk or refusal to a test in to submit chemical on an license. jurisdiction, another and also accompanying proposed Impact” In the statement “Social surcharges regulation, the Commissioner stated that the would The recita- motor vehicle offenses.” Ibid. apply “for serious Act—“to make those who purpose of the of the Reform tion responsible safety financially laws violate the traffic emphasizes the connection be- increased costs of insurance” — Thus, surcharges. safety-related offenses and Ibid. tween regulation in the no indication in the itself or material there is intended to include accompanying it that the Commissioner among non- non-safety-related and convictions violations for which are as- point violations and convictions sessed. pleaded guilty, driving respondent to violation which license, may implicate safety concerns. a sometimes
without Respondent argue person not A who never does otherwise. license, intentionally a or one who failed obtained driver’s status, revealing change in a license to avoid health renew regulation. this subjected could under violation; guilt paid she Respondent admitted her argues only that the circumstances of her violation fine. She driver, “high indicate that she is a or a risk” do not “bad” regulation apply is construed to thus to the extent that the her, it is invalid. agreeing respondent’s violation does not
Apparently driver, respondent is an unsafe the Court demonstrate that legislative purpose impose surcharges on speculates that the ** * “poor” irresponsible “could include “bad” or added). (emphasis .2dat 873 In drivers.” Ante at 575 A view, irresponsible drivers is majority’s “stabiliz[ing purposes the Reform Act’s consistent with remedying inequities “extensive built into rates” and insurance] predecessor Assigned Risk Plan.” Ibid. rate-stabilizing pur- majority excessively on the focuses underlying pose insufficiently of the Reform Act and on the
661 purpose comprehensive insurance law: high-risk to make responsible drivers financially higher for the cost of insurance. construed, Properly sought Reform Act to stabilize sur- among drivers, rates among not all drivers. A unsafe regulation shifting some of the financial burden only transgression whose is the innocent non-renewal of a driver’s license enough relationship does not bear close purpose central legislation judicial to survive review. view, my In regulations implementing the Merit Plan must person afford a of driving convicted without a the opportunity prove license that the violation had safety no implications therefore irrelevant purposes of the Merit Rating showing made, Plan. If that then unlicensed-driver violation cannot be the basis of an surcharge. underlying regulation, N.J.A.C. 13:19-13.1, should be so construed. I would affirm. WILENTZ,
For reversal and reinstatement —Chief Justice HANDLER, POLLOCK, and Justices O’HERN and GARIBALDI—5.
For STEIN—1. affirmance —Justice A.2d ALTERMAN,
IN THE MATTER OF MARC E. AN ATTORNEY-AT-LAW.
July DISCIPLINARY ACTION
CONSENT ORDER being brought THIS MATTER before the Court DAVID JOHNSON, JR., Director, Ethics, E. Attorney Office of