Before Judges Baime, Brochin and Eichen.
The opinion of the court was delivered by: Eichen, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
On appeal from the Superior Court of New Jersey, Law Division, Union County.
On this appeal, we are confronted with essentially the same issue presented in Rutgers Casualty Ins. Co. v. Ohio Casualty Ins. Co., 299 N.J. Super. 249 (App. Div, 1997), aff'd, 153 N.J. 205 (1998): whether an insurance carrier that pays personal injury protection (PIP) benefits to a claimant injured in an automobile accident is entitled to pro rata contribution under N.J.S.A. 39:6A-11 *fn1 from another insurance carrier that is also required to provide PIP coverage under N.J.S.A. 39:6A-4. The Supreme Court concluded that the carrier that paid the PIP benefits in that case was not entitled to contribution from the defendant carrier, Ohio Casualty Insurance Company (Ohio), because Ohio had effectively excluded PIP coverage under the "follow-the-family" provision in its policy, and because the Legislature had eliminated PIP contribution as a matter of law by enacting N.J.S.A. 39:6A-7b(3). See Rutgers, supra, 153 N.J. at 210.
Briefly stated, these are the facts in this case. Kenneth DiNicola, Jr. was the named insured under a policy issued by plaintiff IFA Insurance Company (IFA) insuring his personal vehicle. On December 12, 1997, DiNicola was involved in an automobile accident while he was driving a car owned by his employer EMCO Plastic Distributors (EMCO), which he used for business and personal use. The EMCO car was insured by defendant Atlantic Mutual Insurance Company (Atlantic Mutual). The only named insured under the Atlantic Mutual policy was EMCO.
As a result of the injuries he sustained in the accident, DiNicola applied for and received PIP benefits from IFA under his personal policy. IFA sought inter-company arbitration to compel Atlantic Mutual to contribute its share of the PIP expenses. Atlantic Mutual refused, citing the "follow-the-family" exclusion in its policy which excludes payments of PIP benefits to "to any person other than the 'named insured' or any 'family member' if such person is entitled to New Jersey personal injury protection ... as a 'named insured' or 'family member' under the terms of any other policy with respect to such coverage...." Relying on its "exclusion," i.e., the fact that DiNicola was a named insured on IFA's policy, Atlantic Mutual declined to participate in inter-company arbitration under N.J.S.A. 39:4-11.
On a motion for summary judgment, the Law Division ruled in favor of Atlantic Mutual, dismissing its complaint and this appeal ensued. We affirm.
In Rutgers, supra, 153 N.J. at 209, the Supreme Court affirmed our decision, agreeing with us that under the "follow-the-family" provision in the policy issued by Ohio to its insureds it was rendered not "liable" for the payment of PIP benefits to anyone other than its named insured and the named insured's otherwise uninsured resident relatives because the injured persons there had PIP coverage under their own policies. See 299 N.J. Super. 249, 263 (App. Div. 1997). In so doing, the Court noted our observation that the "follow-the-family" provision "effectuates" the legislative goal of "transactional efficiency" by permitting insurance companies to avoid the "cumbersome and uneconomic shifting of dollars" that results from contribution claims. See Rutgers, supra, 153 N.J. at 263. The Court further remarked that the explanatory note to the recently enacted amendment to N.J.S.A. 39:6A-7, N.J.S.A. 39:6A-7b(3) *fn2 states that "the bill eliminates PIP contribution." Rutgers, supra, 153 N.J. at 210. The explanatory note states in its entirety as follows:
This bill provides that insurers do not have to pay certain personal injury protection (PIP) benefits if the injured person already has PIP benefits coverage under another policy.
Pursuant to section 11 of P.L.1972, c. 70 (C.39:6A-11), if two or more insurers are liable to pay PIP benefits, any insurer paying the benefits can recover from the other insurers an equitable pro-rata share of the benefits paid. This process is commonly referred to as "PIP contribution." Most insurers have recognized that PIP contributions, in most cases, result in a "wash," and accordingly, insurers have not generally exercised the contribution option. This bill eliminates PIP contributions and thereby eliminates an unnecessary expense in the current system without reducing coverage to the consumer.
Allows insurers to deny PIP benefits to persons with PIP coverage under another policy. (Emphasis added.)
In light of the foregoing, the Court observed that both "the policy exclusion and the statutory exclusion thus prohibits an insurance carrier that has paid out PIP benefits pursuant to N.J.S.A. 39:6A-4.2 *fn3 from receiving contribution from other carriers potentially liable under N.J.S.A. 39:6A-4, -11."
Based on the foregoing, we are constrained to conclude that because DiNicola is a named insured in the IFA policy and is entitled to, and did receive PIP benefits from his carrier, and because Atlantic Mutual's policy includes a "follow-the-family" provision, Atlantic Mutual cannot be "liable" to IFA for contribution toward ...