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Cokenakes v. Ohio Casualty Insurance Co.

Decided: September 19, 1985.

JOHN COKENAKES AND MARY COKENAKES, PLAINTIFFS,
v.
OHIO CASUALTY INSURANCE CO., LIBERTY MUTUAL INSURANCE CO., AND HARTFORD INSURANCE CO., DEFENDANTS



Haines, A.j.s.c.

Haines

OPINION

This is an action for personal injury protection (PIP) benefits. The Cokenakes were involved in an automobile accident in Hollywood, Florida, on January 23, 1983. They were operating a leased vehicle insured by Liberty Mutual Insurance Company ("Liberty"). They owned an automobile, not involved in the accident, which was insured by the Ohio Casualty Insurance Company ("Ohio"). Both companies have been sued for PIP benefits together with the Hartford Insurance Company, which provided coverage for the second vehicle involved in the accident. The Hartford claim is not relevant here.

Liberty Mutual moves for summary judgment requiring Ohio, as the primary carrier, to pay PIP benefits to the plaintiffs. Ohio defends the motion, arguing that it is not primarily liable but is a co-insurer entitled to contribution from Liberty. There are no factual disputes and summary judgment is appropriate. Resolution of the dispute depends upon the interpretation of N.J.S.A. 39:6A-4.2, which became effective on October 4, 1983, and operative on January 1, 1984; if it is to be applied retrospectively, Liberty wins; if it is not, Ohio wins. The issue has not previously been decided.

N.J.S.A. 39:6A-4.2 is entitled "Primacy of Coverages" and provides:

The personal injury coverage of the named insured shall be the primary coverage for the named insured and any resident relative in the named insured's household who is not a named insured under an automobile insurance policy of his own. No person shall recover personal injury protection benefits

under more than one automobile insurance policy for injuries sustained in any one accident.

Ohio is the carrier providing "coverage of the named insured," which is therefore "the primary coverage" for the Cokenakes. The insurer providing primary coverage is first liable for the payment of benefits. Annotation, "Excess Carrier's Right to Maintain Action Against Primary Liability Insurer for Wrongful Failure to Settle Claims Against Insured," 10 A.L.R. 4, 879-880 (1981). In the present case, therefore, Ohio must pay unless the accident, which occurred prior to the effective and operative dates of the statute, is not affected by the new legislation. Former law made no distinction between primary insurers and others.

The prior rule was established in Federal Insurance Co. v. Liberty Mutual Ins. Co., 190 N.J. Super. 605 (App.Div.1983), which held, relying upon N.J.S.A. 39:6A-11, that "[t]he statute ignores all differences in categories of insurers and claimants," at 614, and that when one of two insurers, such as Liberty or Ohio in the present case, pays PIP benefits, the other is entitled to contribution. See also Selected Risks Ins. Co. v. Allstate Ins. Co., 179 N.J. Super. 444, 449 (App.Div.1981), certif. den., 88 N.J. 489 (1981). N.J.S.A. 39:6A-11 provides in full as follows:

Contribution among insurers.

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 ...


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