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Aponte-Correa v. Allstate Insurance Company

February 01, 2000

ROSA APONTE-CORREA, FORMERLY KNOWN AS ROSA APONTE, PLAINTIFF-RESPONDENT,
V.
ALLSTATE INSURANCE COMPANY, DEFENDANT-APPELLANT



On certification to the Superior Court, Appellate Division, whose opinion is reported at 317 N.J. Super. 597 (1999).

The opinion of the court was delivered by: Stein, J.

Argued September 27, 1999

This appeal requires us to interpret the provision of the No Fault Insurance Act (the Act), N.J.S.A. 39:6A-1 to -35, that prescribes limitations periods for suits arising out of the refusal by an insurer to pay medical expenses resulting from an automobile accident. The Act provides in pertinent part:

Every action for the payment of benefits . . . shall be commenced not later than 2 years after the injured person or survivor suffers a loss or incurs an expense and either knows or in the exercise of reasonable diligence should know that the loss or expense was caused by the accident, or not later than 4 years after the accident whichever is earlier, provided, however, that if benefits have been paid before then an action for further benefits may be commenced not later than 2 years after the last payment of benefits. [N.J.S.A. 39:6A-13.1a*fn1 (emphasis added).]

The unitalicized or "first" portion of the statute requires claimants to file suit within two years of the known injuries or expenses and within four years of the date of the accident, whichever is earlier. Ibid. The italicized or "second" portion of the statute provides that an action seeking payment for further benefits may be instituted within two years of the insurer's last payment of benefits. Ibid. The interpretative issue is whether Personal Injury Protection (PIP) claimants who receive from their own carrier a payment of medical benefits at any time within the limitations period set forth in the first part of the statute are restricted in bringing suit against their carrier to the limitation period provided in the second part of the statute, or whether they may take advantage of either the limitations period in the first or second portion of the statute. The Appellate Division held that an action for further benefits by a claimant who had received PIP benefits within four years of the accident is timely if it complies with either portion of the statute. We granted defendant's petition for certification, 160 N.J. 91 (1999), and now affirm.

I.

The critical facts of this case are undisputed. On November 22, 1992, plaintiff Rosa Aponte-Correa was injured in an automobile accident. After undergoing a series of tests, plaintiff was diagnosed with borderline Carpal Tunnel Syndrome and also was treated for neck pain. Defendant Allstate Insurance Company (Allstate) paid plaintiff's medical expenses from December 1992 until December 28, 1993. On July 10, 1995, plaintiff underwent further medical testing for symptoms related to the 1992 accident. Those tests revealed continued borderline Carpal Tunnel Syndrome and neck pain. Despite repeated telephone calls and letters from plaintiff to Allstate between February 1, 1996 and the filing of suit, Allstate never issued a "cut-off" letter to plaintiff. Because of her concern about the statute of limitations, plaintiff pressed Allstate for an answer about whether it intended to pay the bills or whether she should file suit. Allstate responded that it had not received the bills and that plaintiff should "do whatever she has to do." Allstate subsequently declined either to pay or to reject the bills submitted by plaintiff.

On July 24, 1996, plaintiff filed a complaint for payment of her PIP benefits. Although the complaint was filed within four years of the accident and within two years of the date that plaintiff incurred her first uncompensated expense, the filing date was more than two years after Allstate's last payment of PIP benefits. Subsequently, the parties proceeded to an arbitration hearing that resulted in Allstate being ordered to pay plaintiff's medical bills, counsel fees, and costs. Allstate refused to pay and moved for summary judgment, asserting the protection of the statute of limitations provision of the Act, N.J.S.A. 39:6A-13.1a. Allstate contended that plaintiff's claim was time-barred because it was not filed within two years of its last payment of benefits.

Accepting Allstate's assertion, the trial court found that plaintiff's suit was barred because it was commenced more than two years after the last payment by Allstate, and therefore granted summary judgment to Allstate. The Appellate Division reversed. It held that "[t]he statute of limitations is satisfied if the date of commencement of suit meets either of the[] two alternative tests." Aponte-Correa v. Allstate Ins. Co., 317 N.J. Super. 597, 606 (App. Div. 1999).

II.

A.

The view of our dissenting colleagues, the decisions of the various Appellate Division panels that have construed the statute, and the literal language of the statute persuade us that the statute at issue is susceptible to more than one interpretation. Because the PIP limitations statute is not clear and unambiguous, we consider sources other than the literal words of the statute to guide our interpretative task. "If the text . . . is susceptible to different interpretations, the court considers extrinsic factors, such as the statute's purpose, legislative history, and statutory context to ascertain the legislature's intent." Township of Pennsauken v. Schad, 160 N.J. 156, 170 (1999). Above all, we "seek to effectuate the `fundamental purpose for which the legislation was enacted.'" Ibid. (quoting New Jersey Builders, Owners and Managers Ass'n v. Blair, 60 N.J. 330, 338 (1972)). Where a literal reading will lead to a result not in accord with the essential purpose and design of the act, the spirit of the law will control the letter. Jersey City Chap. Prop. Owners Protective Ass'n v. City Council, 55 N.J. 86, 100 (1969). As Justice Jacobs stated, "[w]hen all is said and done, the matter of statutory construction . . . will not justly turn on literalisms, technisms, or the so-called formal rules of interpretation; it will justly turn on the breadth of the objectives of the legislation and the commonsense of the situation." Ibid.

The underlying purpose of the No Fault Act is reparation. See Automobile Insurance Study Commission, Reparation Reform for New Jersey Motorists at 7 (December 1971) (Commission's Report). It was enacted primarily to assure that injured plaintiffs are compensated promptly for medical treatment resulting from injuries received in an automobile accident. Id. at 7 (stating that one of four objectives of No Fault Law is to ensure "the prompt and efficient provision of benefits for all accident injury victims").

This Court's decisions in Zupo v. CNA Insurance Company, 98 N.J. 30 (1984) and Rahnefeld v. Security Insurance Company of Hartford, 115 N.J. 628 (1989) illustrate the beneficent purposes of the statute. In Zupo, we adopted the Appellate Division's expansive interpretation of the No Fault Act's statute of limitations when we held that the statute of limitations does not bar an action brought within a reasonable time after a claim for additional medical expenses is denied when "a carrier has made [PIP] payments . . . and is chargeable with knowledge at the time of its last payment that the injury will probably require future treatment." 98 N.J. at 31 (quoting Zupo v. CNA Ins. Co., 193 N.J. Super. 374, 384 (App. Div. 1984)). The insurance carrier in Zupo paid PIP benefits to the plaintiff who was injured in an automobile accident and developed osteomyelitis. 193 N.J. Super. at 378. Five years after the last payment of benefits the plaintiff suffered a recurrence of the osteomyelitis. Ibid. The carrier refused to pay benefits claiming the protection of the statute of limitations. Ibid. We observed that the purposes of a statute of limitations are "to stimulate litigants to pursue a right of action within a reasonable time so that the opposing party may have a fair opportunity to defend," and "to penalize dilatoriness and serve as a measure of repose." Zupo, supra, 98 N.J. at 32 (quoting Ochs v. Federal Ins. Co., 90 N.J. 108, 112 (1982) (internal citations omitted). Noting that the recurrence of plaintiff's osteomyelitis was foreseeable by defendant, we found that to allow a plaintiff's claim in those circumstances "poses no threat" to the salutary purposes of a statute of limitations but rather "comports with the intent of the remedial legislation." Id. at 33.

Similarly, in Rahnefeld, supra, 115 N.J. 628, we interpreted the statute of limitations to allow a plaintiff to maintain an action for PIP benefits where the "injuries were of such a nature that future treatment was contemplated and reasonably necessary." Id. at 636 (quoting Lind v. Insurance Co. of North America, 174 N.J. Super. 363, 369 (Law Div. 1980)). In Rahnefeld, the insurance carrier paid PIP benefits for three years after the plaintiff was severely injured in an automobile accident. Id. at 631. Five years after the last payment of benefits, the plaintiff required further surgery. Ibid. We observed that because the insurer "knew or should have known that recurrence of [the plaintiff's] medical difficulties for which it would be responsible was probable," id. at 636 (citation omitted), "allowing recovery under the circumstances would disserve none of the policies underlying statutes of limitations." Id. at 634.

B.

Although the first portion of the statute uses the prefatory phrase "shall be commenced" before setting forth the applicable limitations period, the second portion of the statute uses the phrase "may be commenced." Settled principles of statutory construction guide us in our interpretation of the legislature's use of the words "may" and "shall" in the same statutory sentence. Under the "plain meaning" rule of statutory construction, the word "may" ordinarily is permissive and the word "shall" generally is mandatory. See, e.g., Harvey v. Board of Chosen Freeholders of Essex County, 30 N.J. 381, 391 (1959). Where a statutory provision contains both the words "may" and "shall," it is presumed that the lawmaker intended to distinguish between them, "shall" being construed as mandatory and "may" as permissive. Bell v. Western Employer's Insurance Company, 173 N.J. Super. 60, 65 (App. Div. 1980); Sutherland Statutory Construction, § 57.11 (1992).

C.

This Court first addressed the issue of when the Act's statute of limitations is triggered in Ochs v. Federal Insurance Company, 90 N.J. 108 (1982). There, the plaintiff was injured in a motorcycle accident on November 10, 1974. He first requested PIP benefits on February 18, 1978, more than three years after incurring his injury or first medical expense. His insurer denied benefits and the plaintiff filed suit on May 8, 1978. Id. at 110-11. Holding that where an insured has not yet received any PIP benefits the statute of limitations begins to run either from the date of the accident or from the date on which the insured became aware that his injuries were related to the accident, we resolved a conflict between two Appellate Division decisions and found that the plaintiff's claim was time-barred. Id. at 113-14. We rejected the Appellate Division's conclusion that only those expenses more than two years old when suit was filed were barred by the statute. Id. at 111. However, we expressly declined to address the question of when the statute of limitations begins to run for a claimant who already has received payment of PIP benefits and who seeks further benefits. Id. at 112 n.1.

That question was first considered in Andrito v. Allstate Insurance Company, 161 N.J. Super. 409 (Dist. Ct. 1978). There, the plaintiff was injured in an automobile accident and treated by a dentist the next day, September 22, 1975. Allstate paid for that treatment on December 11, 1975. Id. at 410. On February 12, 1976, the plaintiff returned to her dentist who completed the work started five months earlier. Ibid. The plaintiff filed suit for payment of those dental expenses on February 9, 1978, more than two years after the last payment of benefits, but within two years of incurring her first uncompensated expense and within four years of the accident. Id. at 411. The defendant sought summary judgment contending that the suit was time-barred because it was filed more than two years after the last payment of benefits. Ibid. The court concluded that the legislature did not intend that a suit for further benefits that satisfies the requirements of the first portion of the statute also must satisfy the requirements of the second portion of the statute, observing that "[n]o purpose comes to mind" that would justify restricting plaintiff to the limitations period set forth in the second portion of the statute. Id. at 412.

The Appellate Division reached a similar result two years later in Bell, supra, 173 N.J. Super. 60, when it held that the period within which suit could be commenced was not defined exclusively by the second part of the statute, but that a plaintiff who has been paid PIP benefits could use the limitations period set forth in either portion of the statute. Id. at 65. In Bell, the plaintiff brought suit for medical expenses incurred in an automobile accident more than two years after the insurer's last payment, but within two years of the plaintiff's first uncompensated expense caused by the accident and within four years of the accident. Ibid. Applying settled principles of statutory construction, the Appellate Division concluded that the Legislature's mandate to construe the Act liberally, and its use of both "shall" and "may" within a single sentence, demonstrated that the second portion of the statute was designed to provide an alternative rather than an exclusive limitations period for claimants who previously had received PIP benefits. Ibid.

In Still v. Ohio Casualty Insurance Company, 189 N.J. Super. 231 (App. Div. 1983), the Appellate Division held that the plaintiff was time-barred under the Act where the plaintiff's suit was filed more than four years after the accident and more than two years after the recommencement of treatment. In Still, the claimant was injured on December 7, 1975, and received PIP benefits for expenses incurred through April 29, 1976, the last payment being made on September 24, 1976. Notwithstanding a letter from the defendant informing the claimant that no further PIP benefits would be paid to her, she incurred further expenses for accident-related treatment. When the defendant failed to reimburse the claimant, she filed suit on November 28, 1978. Although acknowledging that the second part of the statute is "intended to `authorize something otherwise barred,'" the Still court barred the claim. Id. at 234 (quoting Bell, supra, 173 N.J. Super. at 65). The court noted that it was "not necessarily in agreement with all that [was] said in Bell" but that the disparate facts of the two cases rendered unnecessary an explanation of those differences. Ibid. Unlike the plaintiff in Bell, who had sued within four years of the accident and within two years of the recommencement of treatment, the Still plaintiff complied with neither limitations period, filing suit more than two years and five months after recommencing treatment and more than two years after the last payment of benefits. Id. at 235.

In a decision inconsistent with both Andrito and Bell, the Appellate Division in Sotomayor v. Allstate Insurance Company, 273 N.J. Super. 165 (1994), held that the plaintiff's suit was not filed within the time period prescribed by the second portion of the statute and was thus time-barred. There, the plaintiff was injured in January 1988. The defendant sent the claimant a "cutoff letter" informing her that it would no longer make PIP payments effective December 31, 1988. The last medical bill paid by defendant was on February 23, 1989. The claimant continued to receive medical treatment between May and September, 1990 and occasionally in 1991, but the defendant declined to reimburse her. On September 16, 1991, within two years of the first uncompensated expense and within four years of the accident, the claimant filed suit seeking reimbursement of medical expenses. The Appellate Division, without citing either Bell or Andrito, held that because the claimant had incurred expenses within two years of the insurer's last payment but had not filed suit within that period, she was not permitted to maintain her suit under the equitable principles established by this Court in Rahnefeld and Zupo. Sotomayer, supra, 273 N.J. Super. at 171. The court found that "plaintiff was obligated to have filed her action for further benefits within the two year period following the last payment of benefits or, if the claims only arose and were timely submitted at the end of that period, within a reasonable period thereafter." Ibid.

In Washington v. Market Transition Facility, 295 N.J. Super. 368 (1996), the Appellate Division held that the insured's claim was timely and that she was entitled to reimbursement of her medical expenses because her claim satisfied the limitations period set forth in the second part of the statute. Id. at 374. The claimant was injured in an automobile accident on January 23, 1993 and immediately received treatment in the emergency room at St. Francis Hospital. The claimant later underwent further outpatient treatment. The defendant partially paid some of the claimant's medical bills through August 9, 1993 but did not pay others, including the emergency treatment bills from St. Francis Hospital. On June 20, 1995, more than two years after her first uncompensated expense but less than two years after the last payment of benefits, the claimant filed suit to recover the unpaid expenses. Defendant moved for summary judgment on statute of limitation grounds, contending that the statute had begun to run on January 23, 1993, the date that the claimant had incurred the bill for her emergency room treatment. The Appellate Division held that the limitations period for filing a suit for further PIP benefits under the second part of the statute "is triggered by the last payment made by the carrier on account of the injuries sustained in the original accident." Ibid. The court rejected the insurer's claim that, when later expenses are incurred, the triggering event for the statute of limitations is the earliest uncompensated expense. Id. at 369. The court observed that it would be unfair to allow insurers to control the date of the running of the statute of limitations by paying later expenses but failing to make complete payment of the earliest incurred expense. Id. at 372.

Our review of those decisions leads us to consideration of a secondary issue: when the limitations period in the first portion of the statute commences for claimants who receive PIP benefits within four years of the accident. The Appellate Division in Bell, supra, concluded that the "loss or expense referred to in [the No Fault Act] is the loss or expense for which recovery is sought in the action unless there had been a prior uncompensated expense attributable to the accident, in which event the loss or expense . . . would be the oldest uncompensated expense." 173 N.J. Super. at 63. Similarly, in Washington, supra, the Appellate Division explained that "while ordinarily the two-year period of the basic formulation is triggered by the incurring of the first expense, that rule did not fairly apply to the Bell plaintiff because, her ...


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