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Martin v. Home Ins. Co.

Decided: June 14, 1994.

CHARLES MARTIN, PLAINTIFF,
v.
HOME INSURANCE COMPANY, DEFENDANT/THIRD-PARTY PLAINTIFF/RESPONDENT/CROSS-APPELLANT, V. UNSATISFIED CLAIM AND JUDGMENT FUND, THIRD-PARTY DEFENDANT/APPELLANT. EDITH M. ROBINSON, BY HER GUARDIAN, D. LEWIS MATTIE, AND PROGRESSIVE CASUALTY INSURANCE CO., PLAINTIFFS/RESPONDENTS, AND TERESA L. MATTIE, THOMAS EVERETT ROBINSON, III, BY HIS GUARDIAN AD LITEM, THOMAS EVERETT ROBINSON, II, D. LEWIS MATTIE, ELLEN MATTIE, AND ROBERT L. MATTIE, PLAINTIFFS, V. L.G. DEWITT TRUCKING COMPANY, INC., AND COLLIE B. ADAMS, DEFENDANTS/APPELLANTS, AND THE NEW JERSEY TURNPIKE AUTHORITY, DEFENDANT. EDITH M. ROBINSON, BY HER GUARDIAN D. LEWIS MATTIE, PLAINTIFF/RESPONDENT, V. PROGRESSIVE CASUALTY INSURANCE CO., DEFENDANT/APPELLANT, AND UNSATISFIED CLAIM AND JUDGMENT FUND AND SAMUEL F. FORTUNATO, COMMISSIONER OF INSURANCE, DEFENDANTS/RESPONDENTS, AND PRUDENTIAL PROPERTY AND CASUALTY COMPANY, INTERVENOR. NEW YORK LIFE INSURANCE COMPANY AND WHOLESALER-DISTRIBUTORS INSURANCE TRUST, PLAINTIFFS/RESPONDENTS, V. PROGRESSIVE CASUALTY INSURANCE COMPANY, DEFENDANT/APPELLANT, AND L.G. DEWITT TRUCKING COMPANY, COLLIE B. ADAMS, EDITH M. ROBINSON, THE UNSATISFIED CLAIM AND JUDGMENT FUND AND SAMUEL F. FORTUNATO, COMMISSIONER OF INSURANCE, DEFENDANTS/RESPONDENTS.



On appeal from the Superior Court of New Jersey, Chancery Division, Burlington County and the Superior Court of New Jersey, Law Division, Essex County.

Before Judges Baime, Conley and Villanueva.

VILLANUEVA

The opinion of the court was delivered by

VILLANUEVA, J.A.D.

This consolidated insurance action involves issues of reimbursement among payors of PIP benefits following two different automobile accidents involving separate out-of-state insurers of vehicles operated in New Jersey. One issue is whether an out-of-state automobile insurer authorized to transact business in New Jersey is entitled under New Jersey law to reimbursement from the Unsatisfied Claim and Judgment Fund ("UCJF") for medical expenses in excess of $75,000 that it paid when its insured severely injured another party in an accident in New Jersey. The other issues are whether the injured party's general health benefits insurer, who paid medical benefits, may obtain reimbursement from the out-of-state automobile insurer and whether the out-of-state automobile insurer may obtain reimbursement directly from the tortfeasors.

A. Robinson Litigation

On May 6, 1988, an automobile driven on the New Jersey Turnpike by Robert L. Mattie ("Robert Mattie"), a Virginia resident, collided with a tractor-trailer owned by L. G. DeWitt Trucking Company ("DeWitt") and driven by Collie B. Adams ("Adams"). The DeWitt truck crossed the center divider, entered the northbound lanes and struck head-on the Mattie vehicle. Edith M. Robinson ("Robinson"), also a Virginia resident and a passenger in the Mattie vehicle along with Teresa Mattie, sustained severe bodily injuries. As of July 1992, Robinson's medical expenses exceeded $700,000.

Robert Mattie insured his automobile under a policy issued in Virginia by Progressive Casualty Insurance Company ("Progressive") which provided for only $500 in medical payments and no personal injury protection ("PIP") benefits.*fn1 Progressive admitted that it was also licensed by the State of New Jersey to issue automobile liability insurance policies for private passenger automobiles operated in New Jersey.

When Robinson demanded PIP benefits from Progressive, Progressive responded that, because its Virginia policy must be construed as providing the required New Jersey PIP coverage, it would not make payments in excess of $75,000 unless the UCJF agreed to reimburse it for amounts in excess of that sum. When Progressive also notified the UCJF of its intention to seek reimbursement for PIP benefits in excess of $75,000 that it paid on behalf of Robinson, the UCJF responded that because the Progressive policy was not written in New Jersey, the UCJF would not reimburse Progressive.

Prior to the accident, New York Life Insurance Company and Wholesaler-Distributors Insurance Trust ("New York Life") issued, from the State of Illinois, a group policy providing life, medical, dental, and accidental death or dismemberment insurance to Robinson as an employee of Mattie's Graphics, a Virginia business, which policy was in effect at the time of the accident. As of July 1992, New York Life had paid medical benefits of approximately $475,000 to Robinson.

On September 5, 1989, Edith M. Robinson by her guardian D. Lewis Mattie, Teresa Mattie, Thomas Everett Robinson III by his guardian ad litem Thomas Everett Robinson, II, Ellen Mattie and D. Lewis Mattie on his own behalf, filed a complaint in the United States District Court for the District of New Jersey against DeWitt and Adams for personal injuries. In April 1990, plaintiffs amended their complaint to name the New Jersey Turnpike Authority as an additional defendant.

On October 4, 1989, Robert Mattie also filed a separate action against DeWitt, Adams and the New Jersey Turnpike Authority in the New Jersey District Court. On May 1, 1990, Progressive filed a third action in New Jersey District Court, seeking from DeWitt and Adams reimbursement for medical payments made on behalf of its insureds, Robinson, Teresa Mattie and Robert Mattie.

On May 4, 1990, Robinson's guardian filed an action, on her behalf, in the Superior Court of New Jersey for declaratory relief against Progressive, the UCJF and Samuel F. Fortunato, the New Jersey Commissioner of Insurance ("Commissioner"), seeking to compel them to pay their respective shares of Robinson's unlimited PIP benefits. On June 21, 1990, a federal Judge ordered the state action removed to federal court, and later consolidated the declaratory judgment action with Progressive's action against DeWitt and Adams. On August 8, 1990, when Progressive answered Robinson's complaint, it asserted a counterclaim and cross-claims seeking declaratory relief against the UCJF and the Commissioner in the event Progressive would be required to make medical payments in excess of $75,000 on behalf of Robinson. The

federal Judge consolidated the earlier Robinson lawsuit still pending with the two other cases which he had previously consolidated.

On October 30, 1990, New York Life, based upon its insurance policy insuring Robinson through her employment, filed a complaint to intervene in the consolidated federal action seeking a lien against any recovery by Robinson, reimbursement from DeWitt and Adams for medical payments made on Robinson's behalf, and reimbursement from Progressive and the UCJF for unreimbursed medical payments.

On May 16, 1991, following several motions and cross-motions, the federal Judge denied without prejudice: 1) Robinson's motion for summary judgment against Progressive for PIP payments under N.J.S.A. 17:28-1.4; 2) Progressive's cross-motion for summary judgment against the UCJF for reimbursement of medical payments made on Robinson's behalf; and 3) New York Life's motion for summary judgment against Progressive for reimbursement or subrogation. The Judge granted the UCJF's and the Commissioner's motion to abstain from deciding the matter and remanded the matter to the Superior Court.

On October 4, 1991, an Essex County Judge addressed the first of the motions which had been denied without prejudice by the federal Judge, concluding that under N.J.S.A. 17:28-1.4 Progressive was required to pay, in an unlimited amount, PIP benefits for Robinson in accordance with N.J.S.A. 39:6A-4, and that the UCJF was not required to reimburse Progressive under N.J.S.A. 39:6A-4. On April 27, 1992, following Progressive's motion for reconsideration, the Judge affirmed his earlier order but deferred entry of the order pending his determination of New York Life's motion to compel Progressive to reimburse it for medical payments it had made on behalf of Robinson.

In March 1992, in its answer to New York Life's second amended complaint, Progressive filed a counterclaim asserting that New York Life was either Robinson's primary insurer or, with Progressive, a co-primary insurer. on July 2, 1992, following cross-motions for summary judgment from New York Life and

Progressive, the Judge determined that Progressive was Robinson's primary insurance carrier for purposes of paying her medical expenses, and that New York Life had not waived its right to reimbursement. On July 31, 1992, the Judge amended the July 2 order, and formally denied Progressive's earlier motion for reconsideration and certified that his earlier determinations were final judgments. On August 9 and 13, 1992, Progressive filed its notices of appeal in both actions.

On October 16, 1992, the trial Judge denied DeWitt's and Adam's motion for summary judgment against Progressive as to its subrogation and reimbursement claims. We granted their motion for leave to appeal.

On October 8, 1992, we granted leave to Aetna Casualty & Surety Company ("Aetna") to file an amicus brief on appeal. On January 19, 1993, we granted leave to Prudential Property and Casualty Insurance Company ("Prudential") to intervene. On March 2, 1993, when Progressive posted a bond for $580,000 for monies New York Life had paid on behalf of Robinson, the July 2, 1992 order was apparently stayed. We consolidated DeWitt's and Adams's appeal with Progressive's appeal. On April 29, 1993, we granted leave to Lumbermens Mutual Casualty Company ("Lumbermens") to file an amicus brief.

B. The Charles Martin Litigation

On July 26, 1987, Home Insurance Company ("Home") issued an insurance policy to Antonio Celeste, a Pennsylvania resident, which policy provided $10,000 in medical expense coverage. Home was authorized to issue automobile insurance policies in New Jersey.

On September 28, 1987, the Home-insured vehicle, driven by Diana Celeste, hit Charles Martin while Martin was operating his bicycle. As of December 1989, Martin's medical expenses exceeded $100,000. In response to Home's demand, the UCJF refused to reimburse Home for any medical expense benefits it might pay on behalf of Martin in excess of $75,000.

On January 30, 1989, Martin filed a complaint against Home seeking a declaratory judgment that Home had to provide him with PIP benefits for his injuries. Home was permitted to file a third-party complaint against the UCJF seeking a declaration that the UCJF was liable to reimburse Home for medical payments made on behalf of Martin in excess of $75,000 under the New Jersey Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 to -35.

Home moved for summary judgment, and on September 11, 1992 the Burlington County Judge granted summary judgment in favor of Home against the UCJF for reimbursement. The Judge did not reach the issue of the constitutionality of N.J.S.A. 39:6-73.1 ("Assumption of excess payment by [the UCJF]; exceptions").

The UCJF has appealed from this summary judgment.

On May 18, 1993, we consolidated the Robinson and Martin appeals.

I.

Applicable Insurance Statutes and Their Legislative History

In 1972, the Legislature enacted N.J.S.A. 39:6A-1 to -35, which in part provided PIP coverage regardless of fault. L. 1972 c. 70 ยง 4 (N.J.S.A. 39:6A-4). In setting forth the extent of coverage under the Act, the applicable ...


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