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Zupo v. CNA Insurance Co.

Decided: November 27, 1984.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 193 N.J. Super. 374 (1984).

For affirmance as modified -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock and O'Hern. For reversal -- Justices Schreiber and Garibaldi. Garibaldi, J., dissenting. Justice Schreiber joins in this dissent.

Per Curiam

[98 NJ Page 31] On certification granted, 97 N.J. 584 (1984), we have reviewed the Appellate Division's holding that "when a carrier has made [personal injury protection benefits] payments in connection with a compensable injury and is chargeable with knowledge at the time of its last payment that the injury will probably require future treatment, then the 'two-year after

payment' provision of N.J.S.A. 39:6A-13.1 will not bar an action brought within a reasonable time after rejection of a prompt claim for payment of additional medical expenses for such treatment." Zupo v. CNA Ins. Co., 193 N.J. Super. 374, 384 (1984). With the "housekeeping" modification noted infra, we affirm, substantially for the reasons expressed in Judge Pressler's comprehensive opinion below.

The modification referred to is required because the Appellate Division remanded the cause in light of the following circumstances:

Because of the state of the record here, we are unable to determine whether CNA was chargeable at the time of its last payment with knowledge that plaintiff's condition would likely require future treatment. We are satisfied from its own concession that plaintiff's instant claim is causally related to the original accident. It also appears when the carrier made its last payment it knew that plaintiff suffered from a causally-related osteomyelitis. There is no proof in the record, however, that as a medical fact osteomyelitis is so likely to recur after a protracted period of apparent cure as to render its recurrence after five years a probable event. If there were such proof, the no fault carrier would be chargeable with knowledge of that fact and its responsibility would extend to payment of this claim. If the probability of such recurrence is not a medical fact, then it would not be responsible for this claim. We therefore remand to the trial court to determine in an evidential hearing whether, as a matter of medical probability, CNA is chargeable with anticipating this claim when it made its last payment. [193 N.J. Super. at 384 (emphasis added).]

We were informed at oral argument that the trial court has already held the hearing on remand, resulting in a determination favorable to plaintiff; hence, there is no need for any further proceedings.

Because the appeal focuses on N.J.S.A. 39:6A-13.1, a specie of statute of limitations built into the New Jersey Automobile Reparation Reform Act, N.J.S.A. 39:6A-11 to -16 (No Fault Law), we add only the following thought to the opinion below. In Ochs v. Federal Ins. Co., 90 N.J. 108 (1982), we referred to the purposes of a statute of limitations:

A statute of limitations has two purposes. The first is to stimulate litigants to pursue a right of action within a reasonable time so that the opposing party may have a fair opportunity to defend, thus preventing the litigation of stale claims. * * * The second function is to "penalize dilatoriness and serve as a measure of repose." [ Id. 90 N.J. at 112 (citations omitted).]

Allowing plaintiff's claim in the circumstances before us poses no threat to either of the above-stated salutary purposes. The carrier recognized its obligation under the policy when it made payment for medical expenses incurred from the date of the accident in July 1973 to the termination of active treatment in May 1975. When it made its last payment, it was chargeable with knowledge (as has now been established) that the condition would probably recur, and hence that there would probably be future medical expenses. When in fact those expenses were incurred, plaintiff sought reimbursement and, upon the carrier's refusal to pay, instituted suit within fifteen months of the onset of the recurrence. Consequently, all the information about the recurrence was "fresh," and the carrier's ability to attack the fact of the recurrence, the nature of the disease, or the causal relationship between the recurrence and the original accident was in no way compromised. Equally clearly, plaintiff was not dilatory in asserting her claim, so that interests of repose are not implicated.

The principle that we adopt today embraces a severely limited class of causally-related medical conditions, namely, those whose insidious nature is such that their recurrence after an extended period of apparent cure is probable. As the Appellate Division observed, the No Fault Law does not address that kind of condition. For the reasons stated by the court below, we believe that allowance of claims such as this plaintiff's comports with the intent of the remedial legislation.

Judgment affirmed as modified. The cause is remanded to the trial court for entry there of ...

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