Plaintiffs move for summary judgment.
The question presented in this case is whether personal injury protection (PIP) reimbursement recovery is limited to the amount of the tortfeasor's liability policy.
The plaintiff Krishnadas Mehta (Mehta) was injured as a result of an automobile accident involving the defendant Lester Lewis (Lewis), who was operating a commercial vehicle at the time.
The plaintiff, Hanover Insurance Company (Hanover), insured the Mehta vehicle.
The defendant, Hartford Insurance Company (Hartford), insured the Lewis vehicle and has paid to the plaintiff the sum of $35,000.00 -- the full amount of Lewis liability policy. Since the Lewis vehicle was a commercial vehicle, it did not have PIP coverage.
Hanover now seeks reimbursement from Hartford, Lewis' insurance company*fn1, for the PIP benefits that it paid to Mehta ($13,702.87), pursuant to N.J.S.A. 39:6A-9.1, Recovery of Personal Injury Protection Benefits from Tortfeasors.
Hartford objects, contending that it has paid to Mehta the limits of its liability policy and it is therefore not liable for any further payments. Hartford's policy provides:
We will pay all sums an "insured" legally must pay as damage because of "bodily injury" or "property damage" to which this insurance applied, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto."
Regardless of the number of covered "autos," "insureds," premiums paid, claims made or vehicles involved in the "accident," the most we will pay for all coverage resulting from any one "accident" is the unit of insurance for liability coverage shown in the declarations.
The original reimbursement statute, N.J.S.A. 39:6A-9, was stated in terms of subrogation and provided:
Any insurer paying benefits in accordance with the provisions of section 4 and section 10, personal injury protection coverage, regardless of fault, shall be subrogated to the rights of any party to whom it makes such payments, to the extent of such payments. Such subrogated insurer may only by intercompany arbitration or by intercompany agreement exercise its subrogation rights against only the insurer of any person liable for such damages in tort provided, however, that such insurer may exercise its subrogation rights directly against any person required to have in effect the coverage required by this act and who failed to have such coverage in effect at the time of the accident. The
exemption from tort liability provided in section 8 does not apply to the insurers' subrogation rights. On and after 2 years from the effective date of this act the provisions of this section shall be inoperative. (emphasis added).
In the case of Pa. Mfgrs. Assn. Ins. Co. v. Govt. Emp. Ins. Co., 136 N.J. Super. 491, 347 A.2d 5 (App.Div.1975), the court concluded that the statute, in providing for subrogation, granted to the insurer only those rights which the PIP recipient would have had against the tortfeasor's insurer. The court said:
We find no indication in the No Fault Law evidencing a legislative intent to tamper with the existing law of normal subrogation. . . . The rights of . . . [the plaintiff] . . . are therefore controlled by existing subrogation principles, with the right and quantum of recovery equated with that of the injured person to whom the PIP payments were made.
Since under the PIP provision of the No Fault Law she is reimbursed on a first-party basis by her host's insurance carrier, she is required to forego her right to recover for these reimbursed expenses and Pennsylvania is subrogated to recover from GEICO in an amount limited by the ...