Attempt to Create UM/UIM Coverage from Statute Fails
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Posted on October 3, 2022 by Barry Zalma
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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, No. A-2883-20, Superior Court of New Jersey, Appellate Division (September 27, 2022) Scott C. Malzberg appealed from the Law Division order granting summary judgment in favor of defendant James River Insurance Company (James River), dismissing plaintiff’s claim for underinsured (UIM) motorist coverage. The case presented a question of first impression regarding the scope of the Transportation Network Company Safety and Regulatory Act (TNCSRA or Act).
Plaintiff was injured in a motor vehicle accident while he was operating his motorcycle as an Uber Eats delivery driver. The sole legal issue raised by the appeal is whether the Act-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.
In granting summary judgment dismissal, the trial court held that the Act only regulates companies that use a digital network such as a mobile phone application (app) to connect a “rider” to a “prearranged ride” and that the Act applies only to the prearranged transport of persons and not to the delivery of food. The court found that nothing in the statutory text or legislative history of the TNCSRA suggested that the Legislature intended to regulate app-based food delivery services.
Plaintiff enrolled with defendant Portier, LLC (Portier) to use his personal vehicle-a motorcycle-to deliver food. The Uber Eats app allows food delivery service providers and restaurants to connect with each other so that they can fulfill orders placed by consumers.
On August 17, 2017, plaintiff was in the process of making a food delivery for Uber Eats when a vehicle driven by defendant Caren L. Josey (Josey) collided with plaintiff’s motorcycle. Plaintiff was thrown from the motorcycle and sustained significant injuries requiring 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 injuries exceeded the limits of Josey’s personal auto insurance policy. Portier had procured a business auto insurance policy from James River to protect it from liability as a result of actions of Malzberg.
However, the James River policy defines an “insured” to include “Delivery Drivers” who have entered into a contract to use the “UberPartner Application” and who have logged into the “UberPartner Application” but did not provide underinsured motorist benefits.
A stipulation of dismissal with prejudice was filed as to defendant Rider Insurance Company on June 29, 2020.
ANALYSIS
The New Jersey Supreme Court has clearly stated that “[t]he overriding goal of all statutory interpretation ‘is to determine as best we can the intent of the Legislature, and to give effect to that intent.'” State v. S.B., 230 N.J. 62, 67 (2017). Consequently, to determine the Legislature’s intent, the court looks to the statute’s language and give those terms their plain and ordinary meaning because the best indicator of that intent is the plain language chosen by the Legislature.
The core issue is whether the Act regulates app-based food delivery services or instead is limited to regulating companies and drivers that arrange and provide transportation services for passengers.
The Statute
“Transportation network company” means a corporation, partnership, sole proprietorship, or other entity that is registered as a business in the State or operates in this State, and uses a digital network to connect a transportation network company rider to a transportation network company driver to provide a prearranged ride. “Transportation network company driver” or “driver” means a person who receives 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 uses a personal vehicle to offer or provide a prearranged ride to a rider upon connection through a digital network controlled by a transportation network company in return for compensation or payment of a fee.
Most notably, nothing in the Act 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 that refer explicitly and repeatedly to “rides” and “riders,” which clearly denote the transport of human passengers.
The absence of any reference in the definition section to any vehicles that transport goods rather than passengers supports the court’s conclusion that the Legislature in enacting the TNCSRA was concerned only with vehicles while they are being used to transport persons.
Aside from the definition section, the text of the entire Act includes only one explicit reference to services that involve the transport of something other than persons, and that reference is done in the context of explaining what transportation network companies and drivers may not do if they are to remain within the scope of the Act.
In sum, the court concluded that the primary question posed in this case is easily resolved under a plain-text analysis. The statutory scheme comprehensively regulates app-based services that provide rides to human passengers. As the court stressed, nothing in the statutory text mentions, much less comprehensively regulates, the delivery of food. In these circumstances, the court did not need to consider extrinsic sources to determine legislative intent.
The appellate court found further extrinsic support for its interpretation of the Act in the regulations that have been promulgated by the MVC.
In the final analysis, it is for the Legislature, not trial or intermediate appellate courts, to fill the void to which plaintiff alludes where the statute fails to deal with those who deliver food, like the plaintiff, rather than those who deliver people.
The Court of Appeal refused to venture an opinion on whether that pending legislation supports or undermines plaintiff’s arguments on this appeal. Reliance on proposed or pending legislation to interpret existing statutes is of little value. There is no value from legislative proposals that are not enacted into law. The TNCSRA in its present form does not apply to the circumstances of this case.
ZALMA OPINION
The suit was imaginative and provided interpretations of a statute that are limited to people who deliver people not food or other products. Malzberg, through is employer, had liability coverage and, if he wanted to be protected, could have purchased UM/UIM coverage for himself. Neither he nor his agency/employer did so. He was appropriately unable to get the court to expand the meaning of a statute by suggestion. Insurance is not a right it is a choice.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, 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 handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].
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Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected].
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Convicted Criminal Seeks to Compel Receiver to Protect his Assets
Post number 5291
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The Work of a Court Appointed Receiver is Constitutionally Protected
In Simon Semaan et al. v. Robert P. Mosier et al., G064385, California Court of Appeals, Fourth District, Third Division (February 6, 2026) the Court of Appeals applied the California anti-SLAPP statute which protects defendants from meritless lawsuits arising from constitutionally protected activities, including those performed in official capacities. The court also considered the doctrine of quasi-judicial immunity, which shields court-appointed receivers from liability for discretionary acts performed within their official duties.
Facts
In September 2021, the State of California filed felony charges against Simon Semaan, alleging violations of Insurance Code section 11760(a) for making...
When There are Two Different Other Insurance Clauses They Eliminate Each Other and Both Insurers Owe Indemnity Equally
Post number 5289
In Great West Casualty Co. v. Nationwide Agribusiness Insurance Co., and Conserv FS, Inc., and Timothy A. Brennan, as Administrator of the Estate of Pat- rick J. Brennan, deceased, Nos. 24-1258, 24-1259, United States Court of Appeals, Seventh Circuit (February 11, 2026) the USCA was required to resolve a dispute that arose when a tractor-trailer operated by Robert D. Fisher (agent of Deerpass Farms Trucking, LLC-II) was involved in a side-impact collision with an SUV driven by Patrick J. Brennan, resulting in Brennan’s death.
Facts
Deerpass Trucking, an interstate motor carrier, leased the tractor from Deerpass Farms Services, LLC, and hauled cargo for Conserv FS, Inc. under a trailer interchange agreement. The tractor was insured by Great West Casualty Company with a $1 million policy limit, while the trailer was insured by Nationwide Agribusiness Insurance Company with a $2 million ...
Opiod Producer Seeks Indemnity from CGL Insurers
Post number 5288
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Insurers Exclude Damages Due to Insured’s Products
In Matthew Dundon, As The Trustee Of The Endo General Unsecured Creditors’ Trust v. ACE Property And Casualty Insurance Company, et al., Civil Action No. 24-4221, United States District Court, E.D. Pennsylvania (February 10, 2026) Matthew Dundon, trustee of the Endo General Unsecured Creditors’ Trust, sued multiple commercial general liability (CGL) insurers for coverage of opioid-related litigation involving Endo International PLC a pharmaceutical manufacturer.
KEY FACTS
Beginning as early as 2014, thousands of opioid suits were filed by governments, third parties, and individuals alleging harms tied to opioid manufacturing and marketing.
Bankruptcy & Settlements
Endo filed Chapter 11 in August 2022; before bankruptcy it ...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
Read the full article at https://www.linkedin.com/pulse/passover-americans-barry-zalma-esq-cfe-5vgkc.
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lostthe ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah.
Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and ...
You Get What You Pay For – Less Coverage Means Lower Premium
Post number 5275
Posted on January 30, 2026 by Barry Zalma
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When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies
In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.
Facts and Background
Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel’s brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from ...
