JEVAUGHN LEBERT v. JOSE J. HERNANDEZ PENA, JASMEET SINGH …TRAVELERS INSURANCE COMPANY…LIBERTY MUTUAL, et al

This case was filed by Plaintiff, Jevaughn Lebert (“Lebert”), who was a passenger on March 14, 2022 in a Lyft ride, which originated in NYC and traveled into NJ, where it was involved in an accident in Teaneck, NJ, with a vehicle operated by Defendant Jose Hernandez Pena (“Pena”).   The driver of the Lyft vehicle was Defendant, Jasmeet Singh, a resident of NY State, who was driving a 2011 Ford Taurus (the “Vehicle”),  owned by Defendant Brinderjit Singh, also a NY State resident.   Defendant Pena admitted fault and his Insurer, Geico, tendered its $15,000 Policy.   As a result of the accident, Lebert alleged that he sustained severe and permanent injuries, which exceed the amount tendered by Pena.   The Lyft Vehicle was registered and garaged in NY and was insured by Defendant, American Transit Company (“American Transit”), and was registered with the NY Taxi and Limousine Commission (“TLC”), in accordance with the TLC Regulations.  

Lyft is a ride-sharing company operating in all 50 states and maintains a digital network through which customers can obtain transportation, and was insured by a Business Auto Insurance Policy issued by Defendant Liberty Mutual Fire Insurance Company (“Liberty”).  The Policy contains certain endorsements and language, which Liberty contends limits their exposure in this matter; thus, the reason why Liberty filed a Motion for Summary Judgment.  However, Plaintiff Lebert contends that the asserted limitation (exemption) is violative of law and therefore Defendant’s Motion for Summary Judgment should be denied and Lebert’s Motion to Reform the Policy to be consistent with alleged applicable law should be granted.   

SUMMARY OF DEFENDANT LIBERTY’S POSITION

Liberty contends that it is entitled to a judgment as a matter of law, advancing the argument that its applicable insurance coverage clearly exempts the ride in question here and that as a general principle, Courts should look tp the “four corners” of the insurance policy and enforce the same as written.   Further, that the terms of Liberty’s policy are controlling and should be construed with their unambiguous meaning.  Jeffrey M. Brown Associates, Inc. v. Interstate Fire & Casualty Co., 414 N.J. Super. 160, 172 (App. Div.) cert. denied, 204 N.J. 41 (2010).   In short, that “An insurer’s duties are defined by what it contracted to do, not what the insured contracted to do.”  citing A. Windt, Insurance Claims and Disputes, see, 11:30 (5th ed. 2007) and Hardy v. Abdul Matin, 198 N.J. 95, 102 (2009).   

SUMMARY OF PLAINTIFF LEBERT’S POSITION

Plaintiff has filed a Cross-Motion for reformation of Liberty’s insurance policy in companion with its opposition to Liberty’s Summary Judgment Motion.  In support of his argument, Plaintiff contends that N.J.S.A. 39:5H-10(a) provides that any party who uses a “personal vehicle” to provide “pre-arranged rides” (i.e. Lyft or Uber) must maintain insurance that recognizes that the driver is a “Transportation Network Company” (“TNC”) driver, and that the statute’s definitions do not exclude “personal vehicles” or “taxicabs” and therefore are governed by the requirements of the NJ TNC statute, which obligates the provision of insured and/or uninsured/underinsured coverage in the minimum amount of $1,500,000.   As a result of the asserted applicability of this statute, Plaintiff argues that Liberty’s policy must be “reformed” to comply with NJ law (N.J.S.A. 39:5H-10(d)) as the statutory minimum insurance requirements would not be met.  

Plaintiff argues finally that N.J.S.A. 17:28-1.4, commonly referred to as the Deemer Statute, mandates that insurance companies licensed to do business in NJ (such as Liberty) must provide insurance coverage consistent with NJ law when an insured vehicle is operated in the State of NJ.  Plaintiff argues that Singh’s vehicle was clearly anticipated to operate (and did operate) in the State of NJ by virtue of providing for hire rides through the Lyft platform.  Further, the Liberty policy in question here provides clearly in the relied upon endorsement that only rides originating in NJ (and four other states) would have the benefit of the insurance coverage provided.  Thus, it is impossible for Liberty to argue that it did not anticipate its Insured to operate in NJ and therefore, is subject to its insurance laws.    

ANALYSIS

“This matter lies at the intersection of laws governing insurance requirements for vehicles operating under the digital network systems of massive ride share companies such as…Lyft and Uber.  Although no specific statistics have been provided to the Court, it has been argued that up to fifty million rideshare transactions in the states of NY and NJ may be affected by this Decision.  The affected states, their legislatures and administrative bodies may be well-served to visit the issues raised here.”  (Rider to Order of the Hon. David V. Nasta, J.S.C., dated January 28, 2025.)  

THE COURT’S DECISION

“The Court renders its decision against the competing backdrop of the two important and well-established policies enunciated in the parties’ respective motions and supporting arguments…The Court disagrees with Liberty’s position that insurance contracts should be enforced as written and that the Deemer Statute is inapplicable and that the equitable remedy of reformation is and should be an exceedingly rare solution, and that Sec. 1693 of the New York Motor Vehicle Traffic Law codified in New York Vehicle and Traffic Law Sec. 1691 et. seq., which requires a minimum of $1.25 Million of UM-UIM is simply inapplicable.  They claim an exception to the law in accordance with Sec. 1691 E (iv) for “for hire vehicles”.   But the Court cannot reach this conclusion because the reference therein to “for hire vehicles” means “a motor vehicle carrying passengers for hire in the city with a seating capacity of twenty passengers or  less.”  Likewise, SEC. 1691 (1) (a) and (b) of the Vehicle and Traffic Law specifically defines a “transportation network vehicle” as one “used by a transportation network company driver to provide a TNC prearranged ride originating in the State of New York; and owned, leased or otherwise authorized for use by the transportation network company driver.  Without question, Mr. Singh’s vehicle is a vehicle subject to the NY law for minimum insurance requirements of $1.25 Million.  See NY VAT Sec. 1693(3)(a). 

“Notwithstanding the above, the Court’s decision is based upon the Deemer Statute…”It is not lost on the Court that a vehicle owned, registered and licensed in New York maintains an insurance policy covering rides only originating in NJ, Arizona, Arkansas, Alaska and Utah…It is clear to this Court that the inclusion of NJ is likely designed to inject a perception of legitimacy into the attempted work around NJ laws.   The Court simply cannot permit this.  It is violative of statute and public policy and is the very reason that the Deemer Statute was enacted.  To accept Liberty’s position would subject innocent passengers in ride share vehicles to potentially be left with inadequate insurance coverage to address injuries resulting from an accident in a Lyft vehicle.  The NY law makes it clear that if a ride share driver does not provide adequate minimum insurance (here $1.25 Million) then Lyft is required to do so.   Similarly, the NJ statutes require statutory minimum insurance of $1.5 Million.   Lyft could simply require its drivers to provide this insurance.  Instead, Liberty apparently permits its drivers to post woefully inadequate insurance coverage and now seeks to rely on a “uniquely crafted” policy endorsement to disclaim coverage.  As in Huggins v. Aguilar, 246 NJ 75 (2021), the Court finds this to be an illegal escape clause and thus cannot permit the same to stand.”  

“For the foregoing reasons, Liberty’s Motion for Summary Judgment is denied and Lebert’s Motion to reform the Policy to comply with NJ statutory minimum coverage of $1.5 Million is granted.”

Liberty Mutual filed a Notice of Motion for Reconsideration of the Orders, which has been adjourned several times and is presently scheduled to be heard in late May, 2025.