On appeal from the Superior Court of New Jersey, Law Division, Bergen County.
Pressler, Shebell and D'Annunzio, JJ. The opinion of the court was delivered by Shebell, J.A.D.
This appeal pertains only to a third-party complaint for declaratory judgment filed by the defendants in the original action, Garcia Construction, Inc. and Cesar A. Garcia, and their insurer, intervenor, Liberty Mutual Insurance Company (Liberty Mutual), against Travelers Insurance Company (Travelers), servicing carrier for the New Jersey Automobile Full Insurance Underwriting Association (JUA) and the Unsatisfied Claim and Judgment Fund (UCJ). The third-party complaint sought a judgment establishing the non-liability of the third-party plaintiffs for reimbursement of personal injury protection (PIP) benefits already paid and to be paid by Travelers to its insured, the plaintiff, Gary L. Sherman.
The third-party action initially sought to establish that upon deposit into court of the $300,000 policy limits of the insurance policy of Liberty Mutual which covered Garcia Construction,
Inc.'s commercial vehicle, Liberty Mutual would be discharged of liability to Sherman, Travelers, the JUA and UCJ, and also that Garcia Construction, Inc. and Cesar Garcia, Liberty Mutual's covered insureds, upon deposit of these proceeds into court, would be discharged of all liability to the PIP providers, third-party defendants. However, the only issue now remaining is whether because the full policy limits have been exhausted, the third-party defendants may proceed against Cesar Garcia and Garcia Construction, Inc. personally based upon their alleged individual liability as tortfeasors under the provisions of N.J.S.A. 39:6A-9.1 providing for reimbursement of PIP benefits.
We hold that an insured commercial motor vehicle tortfeasor has no personal liability for reimbursement of PIP benefits. We therefore reverse the order of the Law Division which denied the motion of Garcia Construction, Inc. and Cesar A. Garcia to bar Travelers, the JUA and UCJ from asserting any PIP reimbursement claim against them individually.
The facts are not in dispute. Plaintiff, Gary L. Sherman, was operating a private passenger automobile on October 19, 1988. He was involved in an intersection collision with a 1986 Mack dump truck registered as a commercial vehicle in New Jersey. The truck was owned by Garcia Construction, Inc.*fn1 and operated by Cesar A. Garcia. The truck was insured by Liberty Mutual under a commercial motor vehicle policy having liability limits of $300,000 per occurrence.
The JUA, with Travelers as the servicing carrier, wrote the coverage for Sherman's passenger vehicle. PIP benefits approximating $500,000 were paid by the JUA and UCJ to the plaintiff on account of his extensive injuries. In Sherman's liability action, the jury determined that the plaintiff was 49% at fault and that the defendants, Garcia Construction, Inc. and
Cesar A. Garcia, were 51% at fault. During the separate damages trial, no evidence was admitted as to damages covered by the PIP benefits paid to the plaintiff. The jury returned a gross verdict of $185,000.
On motion following the jury verdict, the court granted an additur raising the gross jury award to $550,000, together with prejudgment interest. Because the verdict was then reduced to reflect the extent of plaintiff's comparative negligence, defendants' available liability coverage was sufficient to satisfy plaintiff's verdict. However, the limits of Liberty Mutual's policy now appear to be substantially exhausted.
Although Travelers does not claim that under N.J.S.A. 39:6A-9.1 Liberty Mutual can be held for reimbursement of PIP benefits beyond the $300,000 limits of liability insurance, it seeks to hold the individual defendants personally liable for all reimbursement not covered by the policy. The Law Division judge agreed with ...