On appeal from the Superior Court, Law Division, Essex County.
Antell and Simpson. The opinion of the court was delivered by Simpson, J.A.D.
[198 NJSuper Page 10] Travelers Insurance Company (Travelers) appeals from orders in the Law Division vacating a determination by arbitrators that New Jersey Manufacturers Insurance Company (NJM)
pay 100% of personal injury protection (PIP) benefits of Bernard Czech and that Travelers and NJM each pay 50% thereof.
The facts are undisputed. Czech was injured in a one-vehicle accident while driving a 1982 Saab owned by Sound Move, Inc. Travelers' policy covered Czech as an additional insured and made the PIP payments. Czech lived with his stepfather, Nicholas Mallas, who had an automobile insurance policy issued by NJM. As a resident of the Mallas household, Czech was also eligible for PIP benefits under the NJM policy. Travelers claimed NJM was responsible for 100% of the PIP payments and pursuant to N.J.S.A. 39:6A-11 the issue was submitted to inter-company arbitration. The three arbitrators noted that the "controversy involves primary and secondary no fault benefits" and found NJM responsible for all PIP payments. The trial judge vacated the award, relying upon Federal Ins. Co. v. Liberty Mutual Ins. Co., 190 N.J. Super. 605 (App.Div.1983) and Selected Risks Ins. Co. v. Allstate Ins. Co., 179 N.J. Super. 444 (App.Div.1981), certif. den., 88 N.J. 489 (1981). Travelers' claim, basically, is that the NJM policy provides primary coverage and its own policy only secondary coverage. The rationale of the cited cases is that the legislature made no such coverage distinction and that the statute requires the 50-50 sharing of the PIP payments. The statute provides:
If two or more insurers are liable to pay benefits under sections 4 and 10 of this act for the same bodily injury, or death, of any one person, the maximum amount payable shall be as specified in sections 4 and 10 if additional first party coverage applies and any insurer paying the benefits shall be entitled to recover from each of the other insurers, only by inter-company arbitration or inter-company agreement, an equitable pro-rata share of the benefits paid.
N.J.S.A. 39:6A-11 (footnote omitted).
Travelers' attempt to distinguish the present case from the situations in Federal and Selected Risks is not persuasive, and if the case had been properly in the Law Division we would affirm the trial court's orders. The statute, however, provides for recovery "only by inter-company arbitration or inter-company
agreement." Articles Fourth and Seventh of the special arbitration agreement involved in this case contain the following significant provisions:
1. [From Article Fourth]: The decision of the majority of the arbitrators is final and binding without right of rehearing or appeal
2. [From Article Seventh]: The decision of the arbitrators shall be based on law and equitable considerations consistent with accepted claim practices.
Neither the statute nor the two cited cases speak to situations where the inter-company arbitration agreement specifically waives the right to appeal from the arbitration decision. In Federal, the court noted it did not pass on the issues of "improper forum" and "contribution only by inter-company arbitration or agreement." 190 N.J. Super. at 615. In State v. Gibson, 68 N.J. 499 (1975), our Supreme Court held as a matter of judicial policy that "a defendant will be permitted to bring a timely ...