On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Middlesex County, L-8931-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges C.S. Fisher and C.L. Miniman.
Defendant American International Insurance Company of New Jersey (American),*fn1 appeals from a summary judgment in favor of defendant, Providence Washington Insurance Company (Providence) dismissing American's cross-claim for reimbursement of personal injury protection (PIP) benefits it erroneously paid to the third-party defendants for medical treatment they provided to plaintiff Feliciano Pratts and his wife Isaura Collado.*fn2 Because American's cross-claim is not governed by the two-year statute of limitations provision, N.J.S.A. 39:6A-13.1, found in the New Jersey Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 to -35 (the Act), and because American has a viable equitable claim for unjust enrichment, which it may vindicate through arbitration pursuant to N.J.S.A. 39:6A-11, we reverse the order denying declaratory relief in favor of American and granting summary judgment to Providence and remand for proceedings consistent with this opinion.
The facts are not in dispute. Pratts and Collado were involved in a motor vehicle accident on January 1, 2002, in Perth Amboy while Pratts was driving a car he borrowed from Jorge Tapia, which was registered in New Jersey and insured by Providence. Pratts and Collado were residents of Florida and their Florida-registered vehicle was insured by American. Pratts and Collado were both injured, Pratts severely.
Pratts and his healthcare providers made claims for PIP benefits against American, which over time paid $182,353 in PIP benefits for Pratts under the mistaken belief that New Jersey's "deemer statute," N.J.S.A. 17:28-1.4,*fn3 required it to do so.
American also incurred $2282 in claims processing expenses. Collado and her chiropractor initially made a claim against Providence for PIP benefits, which Providence paid in the amount of $3334.90 with the last payment having been made on June 17, 2002. Thereafter, they made claims against American, which paid $12,923 in PIP benefits and incurred $925 for claims processing expenses.
The American policy issued to Pratts provided out-of-state PIP coverage only when the named insured was occupying the insured vehicle and was involved in an out-of-state accident. Because Pratts and Collado were not occupying their Florida vehicle at the time of the New Jersey accident, American was not obligated to provide PIP benefits under its policy at all.
Pratts filed a complaint against Christine Hulme, the driver of the other vehicle, and Mary Wilson, its owner, on December 3, 2003. Because not all PIP claims were paid, Pratts amended his complaint on July 5, 2005, to assert PIP claims against American and Providence. Before answering the amended complaint, American filed PIP Arbitration Petitions against Providence on March 13, 2006.*fn4 American was then permitted to file a late answer to the amended complaint on April 19, 2006, at which point it cross-claimed against Providence, seeking a declaration that Providence was obligated to reimburse it for the PIP benefits it paid in error, which would permit the arbitration to proceed. After Pratts settled his claims against Hulme and Wilson, and American voluntarily dismissed its claims against the third-party defendants, American filed a declaratory-judgment motion on July 25, 2006, and Providence filed a cross-motion for summary judgment on August 25, 2006.
The motion judge issued a written decision in which he concluded that "[American] cannot recover the PIP payments from Providence to reimburse [American], particularly when the applicable Statute of Limitations has expired." The judge acknowledged that had American not paid any benefits, Providence would have been fully responsible to pay all of the PIP claims. Nonetheless, the judge concluded that "nothing permits [American] to recover from Providence those PIP benefits payments it made erroneously on behalf of its insured after the statute of limitations has run." He noted that the Act did not provide a remedy to an insurer that pays PIP benefits mistakenly. Rather, the Act only addressed pro rata sharing of the obligation to pay PIP benefits when more than one carrier was liable to provide PIP benefits, citing N.J.S.A. 39:6A-11. He concluded that this provision did not apply and he also concluded that the Act's two-year statute-of-limitations provision, N.J.S.A. 39:6A-13.1, barred any relief to American because Pratts never filed a claim against Providence until his July 5, 2005, amended complaint, which was filed more than two years after the accident. The judge found no basis for tolling the statute of limitations and noted that American should have identified its error in making PIP payments before the statute of limitations expired. An order denying American's motion and granting Providence's motion was entered on January 3, 2007. This appeal followed.
Because the issues before us are purely questions of law, our review is de novo. Manalapan Realty, L.P. v. Township Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.").
American argues that equitable principles require Providence to reimburse it for the PIP payments it made in error because Providence was the PIP carrier that was obligated to pay benefits on behalf of Pratts and Collado. Where one party, acting under a mistake of fact or law, has conferred a benefit upon another party, the recipient of the benefit may be compelled under the doctrine of unjust enrichment to pay the conferring party for the benefit received. Messner v. County of Union, 34 N.J. 233, 235-36 (1961) (recognizing that where payment of money has been made under a mistake of law it may be recovered if another party will be unjustly enriched); Great American Ins. Co. v. Yellen, 58 N.J. Super. 240, 244 (App. Div. 1959).
The doctrine of unjust enrichment rests on the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another. Callano v. Oakwood Park Homes Corp., 91 N.J. Super. 105, 108 (App. Div. 1966). "The key words are enrich and unjustly . . . ." Id. at 109. ...