Bischoff, Morgan and King.
In this appeal concerning the liability of a no-fault insurance carrier for medical expenses, we are again called upon to consider whether expenses for medical treatment administered by the Federal Government to a serviceman in a Veterans Administration Hospital have been "incurred" within the meaning of the "No Fault" Law, N.J.S.A. 39:6A-1 et seq. The question was recently decided in favor of the serviceman and against the insurance carrier. Lapidula v. Government Employees Ins. Co. , 146 N.J. Super. 463 (App. Div. 1977).
The present declaratory action was tried in the trial court on a stipulated set of facts which disclosed that on August 7, 1973 a policy issued by defendant Government Employees Insurance Company (GEICO) to plaintiff Michael J. Sanner was in effect and covered a 1970 Ford and a Chevrolet, both
owned by him. On that date plaintiff, a National Guardsman engaged in a two-week active tour of duty with the United States Army at Fort Dix, New Jersey, was injured when the jeep in which he was riding collided with a private passenger vehicle owned and operated by another. The testimony of that driver strongly suggests his responsibility for the accident in that he admits failure to make observations and failure to stop at a stop sign. As a result of the collision plaintiff was thrown from the jeep and suffered injuries for which he received treatment provided by the United States Army in a veterans' facility.
Plaintiff's claim for medical expenses pursuant to the Personal Injury Protection Benefits (PIP) coverage of the policy was rejected by GEICO on the grounds that plaintiff (1) was not an injured person under the PIP provisions of the policy, (2) was excluded from PIP benefits since the injury resulted from acts incident to war, insurrection, rebellion or revolution, and (3) has not "incurred" any medical expenses. The trial judge, in an opinion reported at 143 N.J. Super. 462 (Law Div. 1976), held all three of the asserted grounds for noncoverage to be without merit. We agree with the trial judge's ruling on the first two grounds for the reasons given in his opinion; we disagree, however, with the ruling on the third ground and confine our opinion to consideration of that issue.
There is no question but that plaintiff neither paid for treatment provided by the Veterans Administration facility nor became liable for the treatment rendered, 10 U.S.C.A. § 1074; he was in no sense under any obligation of reimbursement except for the Federal Government's right of subrogation against the tortfeasor, if any, whose conduct resulted in the serviceman's injuries. 42 U.S.C.A. §§ 2651-2653. Hence, if there was no tortfeasor, or if the serviceman's own negligent conduct produced his injuries, the Federal Government could not recover for the value of the treatment afforded. We are advised that in the present case plaintiff has already instituted suit against parties
he alleges negligently caused his injuries. If successful in his endeavor, the Federal Government would be entitled to reimbursement out of any such recovery or settlement for the reasonable value of the treatment afforded. Whatever disposition is made of the present controversy, however, the subrogation rights of the Federal Government pursuant to 42 U.S.C.A. §§ 2651-2653 will not be impaired; its recourse to the tortfeasor will remain unaffected.
The critical question here is whether plaintiff "incurred" expenses for medical treatment in light of the fact that he neither paid for them nor became liable to pay for them. Under the personal injury protection provisions of GEICO's policy, the company agreed to pay "medical expenses benefits" to an unlimited extent. Those benefits are defined in the policy as follows:
Hence, a "no fault" carrier's liability for medical expenses is triggered by the insured incurring them, that is, either paying them or becoming liable to pay them. If he neither pays the expenses nor becomes liable to pay them, we fail to see how it can be said, with any degree of realism, that he has incurred such expenses.
In Lefebvre v. Government Employees Ins. Co. , 110 N.H. 23, 259 A.2d 133 (Sup. Ct. 1969), plaintiff had received injuries in an automobile accident for which she received treatment in a federal hospital facility, the reasonable value of which was stipulated to be $918. Defendant carrier had agreed in its medical payments coverage "to pay all reasonable expenses incurred ...