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Lech v. State Farm Insurance Company

November 28, 2000


Before Judges Skillman, Conley and Wecker.

The opinion of the court was delivered by: Conley, J.A.D.


Argued October 31, 2000

On appeal from the Superior Court of New Jersey, Law Division, Essex County.

Pursuant to an assignment of PIP benefits by his various patients, plaintiff, a chiropractor, is the assignee of forty-eight PIP claims against defendant State Farm Insurance Company (State Farm). Relying upon an unreported opinion from a different panel, Lech v. National Consumer Insurance Company, No. A-5458-97T2 (App. Div. June 25, 1999) (Lech), the motion judge granted State Farm's motion to dismiss based upon improper joinder of claims. The proposition accepted by the motion judge, as well as the other panel in Lech, is that since plaintiff's claims were obtained from multiple patient assignors whose separate claims against State Farm could not jointly be brought in a single lawsuit with forty-eight plaintiffs, so too plaintiff assignee should not be permitted to join the separate claims in a single lawsuit against this single defendant insurer. In Lech, the panel primarily focused upon the party joinder rule, R. 4:29-1. The claims joinder rule, R. 4:27-1, was only incidentally considered; its application was rejected with the comment "[t]he obvious purpose of this rule is to join all the claims a party might have against another, not to allow an assignor [sic] of unrelated claims to create a single cause of action where one does not otherwise exist." Although the parties have cited no other comparable authority, we have located at least one other case that has similarly so held. Stank v. Jones, 17 Utah 2d 96, 97, 404 P.2d 964, 965 (1965). We disagree and reverse the dismissal of plaintiff's complaint. In doing so, we caution that our holding is limited to single plaintiff, single defendant permissive claims joinder and does not involve preclusive entire controversy doctrine issues.

Preliminarily, we note that, procedurally, plaintiff could be said to be bound by the legal conclusion in our prior unreported opinion. See generally, Hernandez v. Region Nine Housing Corp., 146 N.J. 645, 659 (1996). But State Farm has not raised collateral estoppel or issue preclusion as a defense. Moreover, the legal issue presented more than likely transcends this particular litigation and is of sufficient importance that we would address it anew even were the defense raised.

We also digress, briefly, to touch upon what may seem to be another basis for the dismissal of plaintiff's complaint. In addition to moving for a dismissal on the basis of improper joinder, State Farm also filed a separate motion for summary judgment contending that the various assignments were invalid. There is some confusion in the record as to the timing of this motion and when and how, or even whether, it was decided by the judge. It seems that it was originally scheduled to be considered prior to the joinder motion but was then adjourned. Two separate orders were then entered on the return date of the joinder motion. Defendant tells us one of the orders is in response to the summary judgment motion. Indeed, it is titled "Order for Summary Judgment," though it does not on its face refer to the invalid assignment argument. Perhaps more to the point, the record contains no findings of fact, conclusions of law or other explanation for a summary judgment based upon invalid assignments. Therefore, while it appears that an order labeled "summary judgment" was signed, we have no confidence that the "summary judgment" order entered on the same day as the order to dismiss based on improper joinder was intended by the judge as a separate alternative order, rather than being caught up in the misjoinder motion papers and mistakenly signed. The most the judge could say about the order at the time of plaintiff's motion for reconsideration as to misjoinder was "[s]o that the record is crystal clear, I take no position as to the validity . . . of the motion of summary judgment. It's still on the record." This is hardly a positive affirmation that the judge intended to grant summary judgment based upon invalid assignment as well as dismiss for misjoinder, much less a recitation of the reasons therefore.

We, then, reject defendant's contention that even if the dismissal based upon misjoinder was erroneous, the summary judgment in its favor remains as an alternative basis for affirmance. Consequently, we assume for the purposes of this appeal that the forty-eight separate assignments which form the basis for plaintiff's claims against State Farm are valid assignments. *fn1

We address whether the form of litigation chosen by the plaintiff here, that is, a single complaint containing all of his claims against this single insurer, is permitted under our court rules. The first inquiry must be what interest plaintiff has as assignee of the forty-eight separate PIP claims. Does he have forty-eight separate "choses in action" in his own right against State Farm? Basic principles of property law applicable to assignments provide an affirmative response.

To begin with, statutorily, "all choses in action arising on contract shall be assignable." N.J.S.A. 2A:25-1. See Kimball International, Inc. v. Northfield Metal Products, ___ N.J. Super. ___, ___ (App. Div. 2000) (slip op. at 16-17). The insured patients' PIP claims against State Farm are contractual and, thus, assignable. See Tirgan v. Mega Life & Health Ins., 304 N.J. Super. 385 (Law Div. 1997). As assignments of "choses in action," the assignments give to plaintiff the contract right to litigate the object of the assignments, the PIP claims. While an assignee's rights can be no greater than those of the assignor, id. at 391; Allstate Ins. Co. v. Lopez, 325 N.J. Super. 268, 278 (Law Div. 1999), neither can they be any less.

Where the assignment conveys a claim that can be sued upon, the assignee "may sue thereon in his own name." N.J.S.A. 2A:25-1. See Russell v. Fred G. Pohl Co., 7 N.J. 32, 38-40 (1951); Berkowitz v. Haigood, 256 N.J. Super. 342, 346 (Law Div. 1992); 6 Am. Jur. 2d Assignments § 113. Indeed, in the context of assignment of PIP claims, it has been held that the health care provider is the real party in interest and that the assignment of a patient's PIP claims against its insurer divests the patient of a right to bring a separate action. Allianz Life Ins. Co. v. Riedl, 264 Ga. 395, 396-98, 444 S.E.2d 736, 737-39 (1994); Jones v. State Farm Mut. Auto. Ins. Co., 228 Ga. App. 347, 349, 491 S.E.2d 830, 832 (1997). See also Gamata v. Allstate Ins. Co., 90 Hawaii 213, 222, 978 P.2d 179, 188 (Haw. Ct. App. 1999); Pay Tel Systems, Inc. v. Seiscor Technologies, Inc., 850 F. Supp. 276, 278 (S.D.N.Y. 1994).

Assuming the validity of the assignments, therefore, we are convinced that plaintiff has a claim, in his own right, against State Farm arising from each of the State Farm insured's PIP assignments. The fact that he may have forty-eight patients who have each assigned their separate claims to him does not make his separate entitlement any less viable.

This case, then, is one of a single plaintiff with multiple claims against a single defendant. It is not a case of mandatory joinder of related claims and, therefore, is governed by the permissive joinder of claims rule, R. 4:27-1. That rule provides in pertinent part:

the plaintiff in the complaint or in an answer to a counterclaim denominated as such and the defendant in an answer setting forth a counterclaim may join, either as independent or as alternate claims, as many claims, either legal or equitable or both, as he ...

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