On November 11, 1974 plaintiff George F. Eckmeyer, Jr., while operating his automobile on Westfield Avenue, Camden, New Jersey, was struck in the rear by an automobile operated by defendant. After argument on an application for summary judgment by plaintiff the matter was set down for trial on damages, the defendant offering no defense to the issue of liability.
Plaintiff, who claims injury at the time of the accident, was eligible for personal injury protection benefits under an insurance policy issued pursuant to N.J.S.A. 39:6A-1 et seq. and written by Gateway Insurance Company. The carrier has paid the treating physician's final bill of $850 pursuant to its policy, and certain income continuation benefits.
The injured plaintiff, who has collected PIP benefits from his own insurance company, now petitions this court for a ruling allowing him to recover those same items against the defendant tortfeasor. The court scheduled this issue for hearing in advance of trial.
"No fault" benefits for individuals sustaining bodily injuries as a result of an automobile accident are referred to in the New Jersey Automobile Reparation Reform Act as personal injury protection benefits. N.J.S.A. 39:6A-4. That section of the act provides the following benefits: (a)
medical expenses, (b) income continuation; (c) essential services, (d) survivor benefits; (e) funeral expenses. These benefits are payable by the insurance company, without regard to negligence, directly to the named insured. N.J.S.A. 39:6A-4.
Once the insurer makes such payments to its injured policyholder, it is necessary to look at N.J.S.A. 39:6A-9 to determine whether the injured policyholder can recover the losses paid or collectible under the PIP provision from the tortfeasor. N.J.S.A. 39:6A-9 provides:
Any insurer paying benefits in accordance with the provisions of section 4 and section 10, personal injury protection coverage, regardless of fault, shall be subrogated to the rights of any party to whom it makes such payments, to the extent of such payments. Such subrogated insurer may only by intercompany arbitration or by intercompany agreement exercise its subrogation rights against only the insurer of any person liable for such damages in tort provided, however, that such insurer may exercise its subrogation rights directly against any person required to have in effect the coverage required by this act and who failed to have such coverage in effect at the time of the accident. The exemption from tort liability provided in section 8 does not apply to the insurers' subrogation rights. On and after 2 years from the effective date of this act the provisions of this section shall be inoperative.
The above statute, by operation of law (i.e. , it is not necessary that the policy contain a subrogation provision), creates a subrogation right in the insurer who pays the PIP benefits. As such, the insurance company steps into the shoes of its assured, to whom it made such payments. The effect of this section of the No-Fault Law has not been interpreted by any New Jersey court. Mario Iavicoli, the principal draftsman of the bill. In his No Fault and Comparative Negligence in New Jersey he states that
An injured person legally permitted to institute a tort action for damages as a result of bodily injuries he sustained is precluded from maintaining a claim in such an action for any losses which were satisfied by personal injury protection benefits. The right of recovery for those losses satisfied by personal injury protection
benefits are transferred by operation of law to the insurer making personal injury protection benefit payments. Only such subrogated insurer is permitted to recover the ...