Guerline Felix v. Brian V. Richards, New Jersey Supreme Court (Opinion Date:  February 26, 2020)

The New Jersey Supreme Court recently affirmed the lower courts' decisions rejecting GEICO's attempt to have Deemer apply zero Bodily Injury (BI) limits to out-of-state tortfeasor policies based on New Jersey's Basic Policy option.

In Felix v. Richards, Guerline Felix’s vehicle collided with Brian Richards’ vehicle in New Jersey.  Richards was insured under a New Jersey automobile insurance policy issued by AAA Mid-Atlantic Insurance Company (AAA). The policy provided bodily injury (BI) liability coverage, as well as uninsured and underinsured motorist (UM/UIM) coverage.  Felix was insured by the Government Employee Insurance Company (GEICO) under a policy written in Florida.  That policy provided up to $10,000 in property liability and personal injury protection (PIP) benefits, but it did not provide any BI liability.  Felix sued Richards for personal injuries, and, in a separate action, Richards sued Felix and AAA for personal injuries. That is why Felix is listed as the plaintiff in the caption of this case. 

AAA then filed a third-party complaint against GEICO, claiming that GEICO’s policy was automatically deemed to include $15,000/$30,000 in BI coverage and that payment would eliminate the claim for UM/UIM coverage by AAA.

The motion court determined that the New Jersey "Deemer" statute applied to GEICO’s policy, rejecting the argument that the statute created a carve-out for BI coverage based upon the Basic Policy, as well as GEICO’s constitutional challenge on Equal Protection grounds.

The Appellate Division affirmed, and the New Jersey Supreme Court granted the petition for certification filed by GEICO.

The Supreme Court concluded that the Deemer statute did not incorporate by reference the Basic Policy’s BI level for insurers like GEICO (which would be zero dollars), to which the second sentence of N.J.S.A. 17:28-1.4 applied. From the perspective of the insurers’ obligation, the required compulsory insurance liability limits remain at $15,000/$30,000.  As to the Equal Protection claim, New Jersey insureds were the ones who had a choice to purchase less than the presumptive minimum BI amount.  The obligation of in-state insurers to offer and provide that minimum was the same as the obligation imposed under the Deemer statute’s second sentence on authorized insurers writing an out-of-state policy. "The equal protection claim therefore falls flat," and the Appellate Division's judgment was affirmed.