Before Judges Pressler, Kimmelman and Arnold.
The opinion of the court was delivered by: Pressler, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
A-4281-98T1 Submitted and A-4621-98T5 Argued March 28, 2000
On appeal from the Superior Court of New Jersey, Law Division, Union County.
The novel issue presented by this appeal is whether the collateral source rule, N.J.S.A. 2A:15-97, which prevents a plaintiff from receiving from the tortfeasor a duplication of the medical expenses payments made by his health insurer, is construable as having abrogated the health insurer's common-law right to reimbursement from plaintiff or subrogation against the tortfeasor. As we see the issue, the question is essentially whether the medical costs incurred in the treatment of a plaintiff's injuries that resulted from a tortfeasor's actions should ultimately be borne by the plaintiff's health insurer--meaning, of course, its rate-payers--or by the tortfeasor--meaning, ordinarily, the premium-payers of his liability carrier. We are persuaded that nothing in N.J.S.A. 2A:15-97 precludes the imposition of the ultimate burden on the tortfeasor. We are equally persuaded that to do so is the only fair and equitable result as well as the only result compatible with a tort system predicated on the concept of payment by the wrongdoer and the exoneration of those who are without fault. Accordingly, we reverse the summary judgments dismissing the complaint of defendant Oxford Health Plans, Inc., whereby it sought reimbursement of the medical expenses it paid on behalf of its injured insureds.
There are two cases before us, which we have consolidated for purposes of this opinion. The relevant facts in both are undisputed. In the Achor case, Leonard and Lenore Achor were sued by Takako Beninato, a professional groomer, who was bitten by the Achors' dog while she was grooming it. Her husband, Michael Beninato, asserted a per quod claim. The Achors' homeowners' insurance carrier, Preferred Mutual Insurance Company, provided a defense to the Beninato suit and acknowledged its obligation of indemnity. Mrs. Beninato had sustained serious injuries as the result of the dog bite, and her health insurer, Oxford, paid over $7,000 for her medical expenses. During the pendency of the Beninato action, the Achors and Preferred Mutual filed an action against Oxford (the Oxford action) by verified complaint and order to show cause seeking a declaration that Oxford was barred by the collateral source statute, N.J.S.A. 2A:15-97, from the subrogation or reimbursement remedy it had asserted. That action was consolidated with the pending Beninato negligence action. After the complaint against Oxford was filed, the Beninatos settled their claim with the Achors for $95,000, the release executed by the Beninatos expressly stating that "[t]his release does not include any payment for medical bills and expenses incurred" by them. Thereafter, following an initial ruling in Oxford's favor in the Oxford action, the judge, on a motion for reconsideration, reversed himself, concluding that its reimbursement/subrogation claim was barred by the collateral source statute. Accordingly, he entered judgment in favor of the Achors and Preferred Mutual. Oxford appeals.
The Perreira matter is a slip and fall case. Maria Perreira, whose husband, Luciano Perreira sued per quod, brought this personal injury action against defendant Columbia Savings Bank, on whose premises she fell, and its snow removal contractor. Oxford, Maria Perreira's health insurer, paid some $13,000 for her medical expenses. While that suit was pending, the Perreiras filed an action against Oxford, the negligence defendants, and their liability carriers, The Preserver Insurance Company and Atlantic Mutual Insurance Company, (the Oxford action), seeking a declaration that Oxford was barred by the collateral source statute from either reimbursement or subrogation against the defendants. The two actions were consolidated. The Perreiras' motion for summary judgment in the Oxford action was granted, and Oxford's cross-motion for summary judgment was denied. Shortly thereafter the Perreiras entered into a stipulation of dismissal with the tort defendants but the terms of their settlement have not been disclosed. Oxford appeals.
The collateral source statute, N.J.S.A. 2A:15-97, adopted in 1987, upon which the motion judge relied in summarily dismissing Oxford's complaints in both actions, provides in full as follows:
In any civil action brought for personal injury or death, except actions brought pursuant to the provisions of P.L. 1972, c. 70 (C. 39:6A-1 et seq.), if a plaintiff receives or is entitled to receive benefits for the injuries allegedly incurred from any other source other than a joint tortfeasor, the benefits, other than workers' compensation benefits or the proceeds from a life insurance policy, shall be disclosed to the court and the amount thereof which duplicates any benefit contained in the award shall be deducted from any award recovered by the plaintiff, less any premium paid to an insurer directly by the plaintiff or by any member of the plaintiff's family on behalf of the plaintiff for the policy period during which the benefits are payable. Any party to the action shall be permitted to introduce evidence regarding any of the matters described in this act.
With respect to Oxford's claim to a right of reimbursement against its own insured, we note that it had anticipated this eventuality in the policy it issued in both these cases, each of the policies providing as follows in Part X:
If a Member is injured or becomes ill through the act of a third party, Health Plan shall provide care for such injury or sickness. Acceptance of such services will constitute consent to the provisions of this section.
Upon providing care for such injury or sickness pursuant to the terms of this agreement, Health Plan shall be permitted to recover the reasonable value of such care for injury or sickness, when payment is made directly to the Member in third party settlements or satisfied judgments.
The Member shall cooperate fully to assist Health Plan in protecting its legal ...