The opinion of the court was delivered by: Fitzpatrick
This matter comes before the court by way of cross motions for summary judgment filed by plaintiff Reuven Tyberg, defendants George Kokinidis and Enviroplan, Inc. and the parties' respective insurance carriers. The court has been called upon to decide whether plaintiff's insurance carrier, Liberty Mutual Insurance Company, is obligated to pay plaintiff $50,000 in supplemental Personal Injury Protection (PIP) benefits pursuant to an insurance policy that it issued to plaintiff. In addition, the court must decide whether Liberty Mutual is entitled to a lien against the proceeds of any settlement in favor of plaintiff or a right of reimbursement against defendants Kokinidis and Enviroplan or their insurance carriers for PIP payments already made to plaintiff. Before addressing the arguments raised by the parties, the court must first determine whether it should apply New Jersey or New York law to the facts at hand.
The facts essential to resolution of the questions presented in this case are not in dispute. On August 14, 1991, plaintiff, Reuven Tyberg, was seriously injured in a two-car automobile collision between cars driven by plaintiff and defendant George Kokinidis. This collision occurred in close proximity to the intersection of Route 9W and Exit 3 of the Palisades Interstate Parkway in Alpine, New Jersey. Plaintiff was driving a 1986 Chevrolet Celebrity station wagon owned by his father and registered in New York. Defendant was driving a car owned by his employer, Enviroplan, and registered in New York.
At the time of the collision, plaintiff lived in Spring Valley, New York; defendant George Kokinidis lived in North Bergen, New Jersey; and defendant Enviroplan, Inc. had its principal place of business in Roseland, New Jersey. Plaintiff's vehicle was insured under Policy Number A02-221-593634-001 issued by Liberty Mutual Insurance Company (Liberty Mutual) which provided PIP coverage under New York law. Defendants Kokinidis and Enviroplan had primary coverage through a policy issued by Lumbermans Mutual Casualty Company (Lumbermans) which provided PIP coverage under New York and New Jersey law and excess coverage through a policy issued by National Union Insurance Company (National Union) which provided PIP coverage under New York law.
To date, plaintiff has incurred medical expenses in excess of $250,000. Liberty Mutual has paid $250,000 in PIP benefits to plaintiff pursuant to provisions of Policy Number A02-221-593634-001 and New York and New Jersey law. Plaintiff demands that Liberty Mutual pay an additional $50,000 in PIP benefits pursuant to an additional premium that was purchased for his benefit. Liberty Mutual refuses to pay for medical expenses in excess of $250,000. As a result, plaintiff has filed the within action against Liberty Mutual seeking a declaration by this court that Liberty Mutual's current exposure under the insurance policy it issued to plaintiff is $50,000.
In addition to the present action pending against Liberty Mutual, plaintiff instituted a personal injury action against Kokinidis and Enviroplan to recover damages for the personal injuries and loss of earnings he sustained as a result of their alleged negligence. Liberty Mutual contends that it is entitled to a lien against the proceeds of any settlement in the personal injury action under New York law. In addition, Liberty Mutual contends that it is entitled to a right of reimbursement for PIP payments it already made to plaintiff from Lumbermans and National Union, the insurers of the alleged tortfeasor (Kokinidis) and Enviroplan. Plaintiff and defendants Kokinidis and Enviroplan argue that New York and New Jersey law do not permit Liberty Mutual to assert a lien against the settlement proceeds that plaintiff may recover in the underlying personal injury action. Plaintiff, Defendants Kokinidis and Enviroplan, and their carriers, National Union and Lumbermans, argue that Liberty Mutual is not entitled to reimbursement of the PIP benefits paid to plaintiff from any party to this litigation. The court has allowed plaintiff to amend his complaint to allege a declaratory judgment claim and join, as parties, the various insurance carriers so that the legality of the positions taken by Liberty Mutual could be resolved in a way which would be binding on all parties.
The initial question before the court is whether New York or New Jersey law applies to the issue of reimbursement among the insurers in the instant suit for PIP payments. The leading case in New Jersey dealing with choice-of-law principles in the area of liability insurance contract controversies arising from automobile accidents is State Farm Mut. Auto. Ins. Co. v. Estate of Simmons, 84 N.J. 28, 417 A.2d 488 (1980). In State Farm, the Supreme Court fully explained the choice-of-law analysis that a New Jersey Court must undertake in order to decide which law applies in the context of a declaratory judgment action filed by an insurer that denied coverage based on another state's law where the policy in question was issued in that state but the accident giving rise to the parties' claims occurred in New Jersey. Id. at 41. The Supreme Court stated the following rule of law:
The law of the place of the contract ordinarily governs the choice of law because this rule will generally comport with the reasonable expectations of the parties concerning the principal situs of the insured risk during the term of the policy and will furnish needed certainty and consistency in the selection of the applicable law.... At the same time, this choice-of-law rule should not be given controlling or dispositive effect. It should not be applied without a full comparison of the significant relationship of each state with the parties and the transaction. That assessment should encompass an evaluation of important state contacts as well as a consideration of the state policies affected by, and governmental interest in, the outcome of the controversy.
If the same result with respect to coverage would be obtained in a case regardless of which state's law is applied, there would be no conflict of law between the two states, obviating the need to choose between them. Id. at 41 (citing Kievit v. Loyal Prot. Life Ins. Co., 34 N.J. 475, 493, 170 A.2d 22 (1961); Pfau v. Trent Alum. Co., 55 N.J. 511, 527, 263 A.2d 129 (1970)).
Applying this approach to facts of the case at bar, the court recognizes that New York law should apply, unless an evaluation of significant state relationships, including significant state policies and governmental interests, reveals that the State of New Jersey has a significant and dominant relationship to the parties and the underlying issues. After making such an evaluation, the court concludes that it need not choose between application of the laws of New York and New Jersey since, under either scenario, Liberty Mutual does not have a right of reimbursement from defendants Kokinidis and Enviroplan or their insurance carriers, National Union and Lumbermans, or a lien against settlement proceeds from the underlying personal injury action. Similarly, with respect to plaintiff's claim that he is entitled to $50,000 in supplemental PIP benefits, the need for choosing between application of New York and New Jersey law is obviated by reason of the fact that the laws of these states are not in conflict with one another. Under either state's laws, the court finds that the plain meaning of the insurance contract issued by Liberty Mutual to plaintiff compels the Conclusion that plaintiff should receive supplemental PIP benefits in exchange for an additional premium that he paid to Liberty Mutual for such benefits.
First, the court will assess the important state contacts which define the relationship of each state to the subject matter in controversy. As noted earlier, plaintiff, a New York resident, was seriously injured in an automobile collision with an automobile driven by George Kokinidis, a New Jersey resident, and owned by Enviroplan, a corporation with its principal place of business in Roseland, New Jersey. The accident occurred in close proximity to the New York-New Jersey border in Alpine, New Jersey.
At the time of the collision, plaintiff lived in Spring Valley, New York and was driving a car registered in New York. Defendant George Kokinidis was residing in North Bergen, New Jersey and driving a vehicle registered in New York. Plaintiff's vehicle was insured by Liberty Mutual which provided PIP coverage under New York law. Defendants Kokinidis and Enviroplan had primary coverage through a policy issued by Lumbermans, which provided PIP coverage under New York and New ...