On appeal from the Superior Court, Law Division, Union County, whose opinion is reported at N.J. Super. (Law Div. 1994).
J.h. Coleman and Levy. Levy, J.s.c. [temporarily assigned].
This appeal requires us to consider whether a tortfeasor's excess insurer is liable to the victim's automobile insurer for personal injury protection (PIP) benefits paid by the automobile insurer to the victim. We conclude the excess carrier is liable as an "insurer" under N.J.S.A. 39:6A-9.1, and we affirm the order granting summary judgment to plaintiff.
While driving his automobile, Charles Self was seriously injured when he collided with a commercial vehicle driven by Thomas Thoenig, owned by Harry A. Kimble & Sons, Inc. Self was insured by Liberty Mutual Insurance Co. and Kimble had a liability policy, with $1 million maximum coverage, from American Reliance Insurance Co., and an excess policy for liability exceeding $1 million from Selective Insurance Co. Liberty Mutual allegedly
paid $13,430 in PIP benefits to Self, and pursuant to N.J.S.A. 39:6A-9.1, sought reimbursement from American Reliance in an arbitration proceeding.
The arbitrator awarded Liberty Mutual $10,590; when asked to pay, American Reliance advised it had exhausted its policy limits of $1 million in settling the basic liability claims for the accident on Kimble's account and could not honor the award. Liberty Mutual then learned of the excess policy Kimble had with Selective, and sought reimbursement from Selective without making any further efforts to collect its arbitration award from American Reliance.
Selective refused, claiming its excess liability policy did not cover such a claim, so the PIP carrier filed an action for damages seeking the $10,590 awarded by the arbitrator on the initial claim against American Reliance, the tortfeasor's primary liability carrier.
This is a statutory cause of action brought under N.J.S.A. 39:6A-9.1 which provides the PIP insurer the right to recover, from the tortfeasor's insurance company, PIP benefits it has paid its insured. That section provides, in pertinent part:
An insurer . . . paying . . . personal injury protection benefits . . . as a result of an accident occurring within this State, shall, within two years of the filing of the claim, have the right to recover the amount of payments from any tortfeasor who was not, at the time of the accident, required to maintain personal injury protection or medical expense benefits coverage, other than for pedestrians . . . or although required did not maintain personal injury protection . . . benefits . . . . In the case of an accident occurring in this State involving an insured tortfeasor, the determination as to whether an insurer . . . is legally entitled to recover the amount of payments . . . shall be made against the insurer of the tortfeasor, and shall be by agreement of the involved parties or, upon failing to agree, by arbitration.
Defendant argues, as an excess carrier, it is not "the insurer of the tortfeasor" intended by this legislation, and only insurers issuing policies required by law, such as primary motor vehicle liability policies, are subject to N.J.S.A. 39:6A-9.1. Because no law requires a motor vehicle owner to carry excess insurance, defendant contends excess carriers are not "insurers."
N.J.S.A. 39:6A-9.1 was preceded by N.J.S.A. 39:6A-9 of the original No Fault Act. The two ...