On appeal from the Superior Court of New Jersey, Law Division, Middlesex County.
O'Brien and Landau. The opinion of the court was delivered by O'Brien, J.A.D.
At issue in this case is the effect of the adoption of N.J.S.A. 39:6A-4.2 upon N.J.S.A. 39:6A-11, as to contribution among insurers for PIP benefits paid to an insured. The trial judge ruled that N.J.S.A. 39:6A-4.2 had prospective application only and did not become operative until the day after the accident causing the injuries for which the PIP benefits were paid. Therefore, he ruled that both insurers were required to share on an equitable pro rata basis benefits paid, pursuant to N.J.S.A. 39:6A-11. We agree and affirm.
Plaintiff Colonial Penn Insurance Company (Colonial) insured the vehicle, driven by the son of the insured, in which Roger Livingston (Livingston), the injured party, was a passenger. The accident occurred on December 31, 1983. Defendant Allstate Insurance Company (Allstate) paid PIP benefits to Livingston under a policy in which he was their named insured. Colonial brought this declaratory judgment action seeking a
declaration that it was not required to reimburse Allstate for any portion of the PIP benefits paid to Livingston.
N.J.S.A. 39:6A-11 reads as follows:
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.
Pursuant to this statute, the trial judge concluded Colonial was obliged to reimburse Allstate for its pro rata share of the PIP benefits paid to Livingston.
Colonial argues that Allstate provided primary coverage for Livingston and until that is exhausted Colonial is not liable to pay PIP benefits on account of his injuries. In support of its argument, Colonial contends it has long been a practice in the industry that a named insured or relatives living in his household should seek PIP benefits first from the named insured's carrier which provides primary coverage. In this instance, Colonial contends that, since Livingston was the named insured in Allstate's policy, Allstate must provide primary coverage, whereas Colonial's policy only provided secondary coverage. Administrative regulations concerning the Automobile Reparation Reform Act support this conclusion. See N.J.A.C. 11:3-7.3(a),*fn1 which reads:
The policy form or endorsement providing the personal injury protection benefits shall provide that the benefits required by N.J.S.A. 39:6A-4 as stated in 1 through 5 below shall be afforded by the insurer of the injured person. . . .
Colonial further argues that the enactment of N.J.S.A. 39:6A-4.2 confirms that this was the original intention of the Automobile Reparation Reform ...