On appeal from the Superior Court of New Jersey, Law Division, Hudson County.
Approved for Publication January 6, 1997.
Before Judges Pressler, Stern and Wecker. The opinion of the court was delivered by Pressler, P.j.a.d.
The opinion of the court was delivered by: Pressler
The opinion of the court was delivered by
Defendant Aetna Casualty and Surety Company appeals from a summary judgment adjudicating its liability, by way of declaratory judgment, to pay personal injury protection (PIP) benefits to plaintiff Karen Metakes Parisi. We conclude that the trial Judge was correct in rejecting Aetna's statute of limitations defense, and, accordingly, we affirm.
The novel issue before us requires us to determine when the cause of action accrues against a PIP carrier that is not primarily liable. Analogizing to excess insurance, we are satisfied that the cause does not accrue until the injured person entitled to benefits knows or is chargeable with knowing that the primary coverage will be inadequate. N.J.S.A. 39:6A-13.1 requires the action for PIP benefits to be brought within two years, extendable to four in specified circumstances, "after the injured person ... suffers a loss or incurs an expense...." In our view, if the injured person is required to exhaust primary coverage before recourse to "excess" coverage, the loss vis-a-vis the excess coverage has not been suffered until the exhaustion occurs.
The facts giving rise to this controversy are not in dispute. In September 1989, plaintiff, a pedestrian, was struck by a vehicle registered in New Jersey owned by Chimanbha G. Patel, driven by his wife, Rashmika Nancy Patel, and insured by defendant Aetna. Plaintiff, not a New Jersey resident, had an automobile policy issued to her in New York by The Travelers whose total combined no-fault benefits were statutorily limited to $50,000. N.Y. Ins. Law § 5102(a) (McKinney 1996). *fn1 Plaintiff's medical and hospital bills were submitted to The Travelers, which had assumed its PIP responsibilities from the outset. It appears from the certifications filed in the trial court that plaintiff's injuries included shoulder and knee injuries as well as a variety of soft-tissue injuries. Her initial treatment was conservative in an attempt to avoid surgery, and in the first several years following the accident, her total medical bills amounted to about $20,000. As time went on, however, more aggressive intervention became necessary, and plaintiff underwent lateral release surgery to repair her knee injury and, in 1994, complex reconstructive surgery of her left shoulder, an eventuality that had not been foreseen early on.
It appears that when the shoulder surgery was scheduled, plaintiff was concerned about the adequacy of her remaining Traveler's benefits. In early January 1994, she determined that about $35,000 had already been spent for her care. At that time, her attorney wrote to Aetna, advising it that there were probably insufficient benefits left on the Traveler's policy to cover plaintiff's future expenses. Pointing out that "Aetna would already have a substantial file in this matter concerning the liability claim against your driver, and that file should contain the medical reports," plaintiff's attorney demanded that Aetna prepare to pay medical expenses in excess of $50,000 should that amount be reached and that it "set up a 'no-fault' file in this matter for future bills." On February 24, 1994, Aetna responded to counsel by form letter, disclaiming coverage on the ground of the statute of limitations, N.J.S.A. 39:6A-13.1; the anti-stacking provision of the statute, N.J.S.A. 39:6A-4.2; and, because plaintiff was a pedestrian, the inapplicability of the so-called "deemer" statute, N.J.S.A. 17:28-1.4. This action was commenced in April 1994.
Defendant moved for summary judgment dismissing the complaint. Abandoning its anti-stacking and deemer arguments, it relied exclusively on N.J.S.A. 39:6A-13.1. The trial Judge, concluding that the suit was not thereunder barred, granted plaintiff's cross-motion for summary judgment, adjudicating Aetna's liability for PIP payments in excess of $50,000. Aetna appeals.
At the outset, we assume that Aetna's abandonment of its anti-stacking argument was based on Judge King's analysis in Martin v. Prudential Ins. Co., 255 N.J. Super. 524, 605 A.2d 762 (App. Div. 1992), of the import of N.J.S.A. 39:6A-4.2. That provision, enacted in 1983, has a two-pronged significance. First, it renders the named insured's personal injury protection the primary coverage as well as the primary coverage of resident relatives of the insured's household not having their own insurance. Second, it has an anti-stacking provision preventing recovery of PIP benefits under more than one automobile policy for injuries sustained in a single accident. Martin construed the anti-stacking provision in the context of a Pennsylvania resident who had her own Pennsylvania family automobile policy and who was injured in New Jersey while a passenger in a New Jersey-registered automobile. The Pennsylvania policy afforded medical benefits of $10,000. Martin obtained and exhausted those benefits under that policy. She then sought PIP benefits from her host driver's New Jersey policy issued by Prudential Insurance Company. Prudential argued that by having accepted the medical pay limits on her own policy, Martin was precluded by N.J.S.A. 39:6A-4.2 from recourse against its policy. In rejecting that argument, this court held that the anti-stacking provision, intended to prevent double recovery, did not apply. Judge King reasoned as follows:
While the language of N.J.S.A. 39:6A-4.2 may arguably support more than one interpretation, including that advanced here by Prudential, we conclude that the construction urged by appellant Martin is the correct one.
Discerning the will of the legislature in this case is neither difficult nor a matter of first impression. Our courts have consistently held that the language under consideration here//--"no person shall recover personal injury protection benefits under more than one automobile insurance policy for injuries sustained in any one accident"//--is a prohibition against double PIP recovery.
This case does not involve a double recovery. Prudential urges that Allstate's $10,000 payment under Martin's Pennsylvania-issued policy cut off any obligation it had to pay PIP benefits for her injuries. This interpretation requires us to conclude that the Legislature had some additional interest in placing a limitation on the source of PIP medical benefits, apart from its obvious interest in avoiding a double recovery. We find neither authority for this view nor reason behind it. The PIP statute provided for medical benefits coverage (unlimited in 1989) to "persons sustaining bodily injury while occupying" the automobile of the named insured. N.J.S.A. 39:6A-4. No attempt was made to limit the rights of nonresident guest passengers in New Jersey-insured vehicles who might have modest medical expense benefits under their own family policies in our sister states under diverse or disparate statutory schemes. We conclude that the Legislature did not intend by ...