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Ochs v. Federal Insurance Co.

Decided: December 23, 1980.

CHRISTIAN J. OCHS, PLAINTIFF-RESPONDENT,
v.
FEDERAL INSURANCE COMPANY AND CHUBB/PACIFIC INDEMNITY GROUP, DEFENDANTS-APPELLANTS



On appeal from the Superior Court, Law Division, Bergen County.

Allcorn, Kole and Pressler. The opinion of court was delivered by Pressler, J.A.D.

Pressler

[177 NJSuper Page 20] This appeal raises precisely the same question concerning the interpretation of the limitations provision of the New Jersey Automobile Reparation Reform Act (No Fault) N.J.S.A. 39:6A-1 et seq. , as was recently addressed by this court in Danilla v. Leatherby Ins. Co. , 168 N.J. Super. 515 (App.Div.1979). We are constrained to reach a contrary conclusion.

With respect to the time limitations applicable to an insured's action for recovery of personal injury protection (PIP) benefits allegedly due him under his no-fault coverage, N.J.S.A. 39:6A-13.1(a) provides in pertinent part that

Every [such] action shall be commenced not later than 2 years after the injured person or survivor suffers a loss or incurs an expense and either knows or in the exercise of reasonable diligence should know that the loss or expense was caused by the accident, or not later than 4 years after the accident whichever is earlier . . . .

Plaintiff Christian J. Ochs was injured on November 10, 1974 when the motorcycle he was riding was struck by an automobile. At that time Ochs was also the owner of an automobile insured by defendant Federal Insurance Company (Federal). He sustained serious injuries in the accident requiring several extended periods of hospitalization and incurred during the ensuing four years medical expenses exceeding $60,000.

An initial inquiry made of Federal's agent on plaintiff's behalf resulted in the information that since he was injured while operating a motorcycle, the policy afforded no PIP benefits. Two years following the accident this court, in Hoglin v. Nationwide Mut. Ins. Co. , 144 N.J. Super. 475 (App.Div.1976), voided the standard motorcycle exclusion in no-fault policies insofar as it attempted to exclude PIP coverage when the motorcyclist was involved in a collision with an automobile. Thereafter plaintiff made demand upon Federal for payment of PIP benefits and, on May 8, 1978, following Federal's refusal to honor the claim, plaintiff commenced this action against Federal seeking recovery of PIP benefits.*fn1

Both parties moved for summary judgment. Defendant took the position that where multiple and successive expenses are incurred, N.J.S.A. 39:6A-13.1(a) bars an action for recovery

of PIP benefits unless it is brought within two years after the incurring of the first medical expense. Plaintiff apparently construed the section as permitting the suit to be brought at any time until the expiration of the four-year period following the date of the accident, arguing further that the encompassed two-year period of limitations does not start to run so long as expenses are still being incurred. The trial judge agreed with plaintiff, granting him summary judgment against Federal, apparently in respect of all of his expenses incurred as a result of the accident. In so holding, the trial judge was apparently unaware of the decision of this court in Danilla, supra , which had held that recovery of all expenses is barred, despite compliance with the four-year requirement, if the suit is not brought within two years following the incurring of the first expense. Nor does the record suggest that either party brought Danilla to the trial judge's attention. While we are persuaded that the trial judge's interpretation of the statute in question was incorrect, we also disagree with Danilla's restrictive construction thereof which we believe produces unduly harsh results which are not only beyond the express statutory mandate but which are also contrary to what we perceive to have been the remedial purposes of the no-fault law. In our view, the statute properly construed permits recovery of PIP benefits if the action is brought within four years from the date of the accident but that it limits the extent of recovery to those expenses incurred within the two-year period immediately preceding the date of suit.

Danilla recognized an ambiguity in the statutory language rendering it susceptible to either its interpretation or to ours. It opted, however, for the more restrictive interpretation on the general perception that such a construction "more readily comports with the purpose and function of statutes of limitation," adding that "We do not deem it likely . . . that the Legislature would have chosen to adopt a statute of limitations which would begin to run each time a new medical expense related to the accident was incurred." 168 N.J. Super. at 519. If the statute contained only the two-year limitation without the "whichever is

earlier" alternative of the four-year limitation, we would readily agree with our brethren since any other construction would leave a carrier open to damage claims indefinitely without the concomitant of a timely liability adjudication having been made. It is our view, however, that the impact of the ...


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