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Delgiorno v. Moss


October 16, 2009


On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket Nos. L-2951-05, L-2981-05 and L-486-06.

Per curiam.


Submitted: September 16, 2009

Before Judges Axelrad, Fisher and Sapp-Peterson.

Plaintiffs Raymond and Vida DelGiorno*fn1 filed personal injury complaints against defendants, Eddie L. Moss, J.B. Hunt Transport, Inc., and Extra Lease Co. (the Hunt defendants)*fn2 as the result of an October 2003 automobile accident. Rutgers Casualty Insurance Co., the DelGiornos' insurer, filed suit "a/s/o Raymond DelGiorno" against the Hunt defendants, seeking to be reimbursed for the personal injury protection (PIP) benefits it paid only on Raymond's behalf. Rutgers never brought a claim for PIP payments paid on behalf of Vida. All the complaints were consolidated.

On July l8, 2008, Vida's personal injury attorney supplemented her discovery responses, producing Rutgers' PIP ledger for the payments it made on Vida's behalf as a result of the accident, reflecting, among other items, that the first payment was made on December l7, 2003. Vida had produced no evidence of any out-of-pocket costs. She took the position that the claim for medical benefits in her complaint included the PIP payments Rutgers made on her behalf. She also claimed Rutgers had assigned its right to reimbursement to her, although the assignment was never produced.

A mediation produced a settlement of the underlying personal injury actions, requiring payment by the Hunt defendants to Vida for her bodily injuries and dismissal with prejudice of her and Raymond's lawsuits against them, but left unresolved Rutgers' claim for PIP benefits paid on Raymond's behalf that was the subject of the consolidated lawsuit. Based upon correspondence it appears Vida and Rutgers continued to take the position there was a viable claim for PIP benefits paid on her behalf. A release was executed by the parties, which is not contained in the appellate record.*fn3 By order of September 29, 2008, the court entered an order dismissing Vida's complaint without prejudice through settlement.

The Rutgers-Raymond PIP reimbursement case was scheduled for trial on December l5, 2008. Vida and Rutgers moved to have the PIP reimbursement claims for both DelGiornos submitted to arbitration pursuant to N.J.S.A. 39:6A-9.1. The Hunt defendants objected and cross-moved to preclude evidence of Vida's PIP payments and medical expenses. The Hunt defendants argued that under N.J.S.A. 39:6A-9.1, because Vida is not an insurer, she cannot unilaterally request and receive a directive that her lawsuit be arbitrated. Nor could she pursue any claim for medical expenses, as all of her medical bills were paid by Rutgers and pursuant to N.J.S.A. 39:6A-9.1, the insurer and not the insured maintains the right to recover PIP benefits.

Following argument on November 21, 2008, the court ordered both Raymond and Vida's PIP claims to arbitration under N.J.S.A. 39:6A-9.1, reasoning:

Rutgers paid PIP benefits on behalf of both of these parties. Rutgers seeks payment for these from commercial tortfeasors and that's exactly the type of case that's called for under 39:6A-9.1.

The court memorialized its decision in orders of the same date remanding "the claims for PIP reimbursement by Vida DelGiorno and Rutgers Casualty Insurance Company a/s/o Raymond G. DelGiorno" from Superior Court to arbitration pursuant to N.J.S.A. 39:6A-9.1, and declaring moot the Hunt defendants' motion to preclude the introduction of PIP payments and medical expenses as to Vida. The Hunt defendants appealed.*fn4 We reverse.

The statute regarding enforcement of PIP benefits unambiguously sets forth who may recover and against whom they may recover, stating in relevant part:

An insurer, health maintenance organization or governmental agency paying... personal injury protection benefits... shall, within two years of the filing of the claim, have the right to recover the amount of payments from any tortfeasor who was not, at the time of the accident, required to maintain personal injury protection or medical expense benefits coverage, other than for pedestrians, under the laws of this State, including personal injury protection coverage,... or although required did not maintain personal injury protection or medical expense benefits coverage at the time of the accident. In the case of an accident occurring in this State involving an insured tortfeasor, the determination as to whether an insurer, health maintenance organization or governmental agency is legally entitled to recover the amount of payments and the amount of recovery, including the costs of processing benefit claims and enforcing rights granted under this section, shall be made against the insurer of the tortfeasor, and shall be by agreement of the involved parties or, upon failing to agree, by arbitration. [N.J.S.A. 39:6A-9.1 (emphasis added).]

If a statute is clear on its face, there is no need to look beyond its plain meaning. New Jersey Auto. Full Ins. Underwriting Ass'n v. Liberty Mut. Ins. Co., 270 N.J. Super. 49, 52 (App. Div. l994). Our "sole function is to enforce the statute in accordance with those terms." Id. at 53 (citation omitted).

Arbitration of PIP claims is statutorily mandated but the statute also makes clear that such claims are to be brought by "[a]n insurer, health maintenance organization or governmental agency." N.J.S.A. 39:6A-9.1. Our courts have consistently held that in contrast to former legislation, this statute confers a new direct right of reimbursement to PIP insurers against certain tortfeasors but that it does not establish any subrogation rights for the PIP insurer through its insured. See, e.g., State Farm Mutual Auto. Ins. Co. v. Licensed Beverage Ins. Exch., 146 N.J. 1, 17-18 (1996); Unsatisfied Claim & Judgment Fund Bd. v. New Jersey Mfrs. Ins. Co., 138 N.J. 185, 191 (1994); Allstate Ins. Co. v. Coven, 264 N.J. Super. 240, 245-46 (App. Div. 1993); Sherman v. Garcia Const., Inc., 25l N.J. Super. 352, 356 (App. Div. l99l); Buoni v. Browning Ferres Indus., 219 N.J. Super. 96, 98-101 (Law Div. l987).

In Buoni, cited with favor in Appellate and Supreme Court opinions, the court rejected the argument that a subsequent PIP suit was barred by the settlement and dismissal with prejudice of the insured's personal injury suit and the release of his claims against the tortfeasor. 219 N.J. Super. at 98. The court concluded that the "PIP reimbursement claim was not and could not be determined in [the first] suit" because it could "be asserted only by the insurer, not the insured...." Id. at 101. The court reasoned:

For purposes of determining the effect of that dismissal and release upon the present claim, it is of fundamental significance that the right to recovery of PIP benefits asserted in this suit is founded upon N.J.S.A. 39:6A-9.1, a statute that was adopted in l983 (and amended in l985 in ways not material to this suit). The language of that statute, read in the light of the New Jersey Supreme Court's decision in Aetna Ins. Co. v. Gilchrist Brothers, Inc., 85 N.J. 550 (l981), establishes that the insurer's right to reimbursement for PIP benefit payments does not arise by subrogation. It is a right that did not belong to, and could not have been asserted by, Mr. Buoni, the nominal plaintiff in this action. [Id. at 98.]

Thus it is clear, based on the plain language of N.J.S.A. 39:6A:-9.1 and the consistent case law interpreting the statute, that the right to recover PIP benefits paid on Vida's behalf, as well as the right to demand arbitration, belongs solely to Rutgers, the insurer, and not to Vida.

Moreover, even if Rutgers assigned the PIP benefits to Vida, of which there has been no credible evidence presented, she would still not have a legal entitlement to enforce the PIP claim. Such a result would fly in the face of both N.J.S.A. 39:6A-9.1 and N.J.S.A. 39:6A-12. Vida would still be proceeding under her personal injury case. The first count of her amended complaint sought damages for her expenditure of "large sums of money for medical attention and care...." This count cannot serve as a basis for the PIP claim. See Coven, supra, 264 N.J. Super. at 247. As all Vida's medical expenses were paid by her PIP carrier, they would be inadmissible in her tort action. See N.J.S.A. 39:6A-12 (Except as may be required in an action brought under N.J.S.A. 39:6A-9.1, evidence of the amounts of medical expenses paid by a PIP insurer is inadmissible in a civil action for recovery of damages for bodily injury by such injured person.); Martin v. Home Ins. Co., 141 N.J. 279, 287 (1995) (explaining the policy behind the evidential exclusion rule of N.J.S.A. 39:6A-12 is to prevent double recovery of PIP benefits). Moreover, Rutgers cannot use the fiction of an "assignment" to attempt to bootstrap an arguably untimely PIP recovery claim into Vida's underlying personal injury complaint. See N.J.S.A. 39:6A-9.1 (requiring the PIP carrier to assert its right of reimbursement within two years of the filing of the PIP claim); Coven, supra, 264 N.J. Super. at 247 (holding that the PIP insurer "cannot stand in the shoes of its insured" but, rather, it must assert an individual claim in a timely manner).

As Vida has no legal right to pursue a claim for PIP reimbursement benefits, the portion of the November 21, 2008 order transferring this claim to arbitration is reversed and Vida's personal injury complaint is dismissed with prejudice.

We will not address the Hunt defendants' arguments that the insured tortfeasors are improper parties to a PIP reimbursement claim or any arguments pertaining to Rutgers' PIP suit for payments made on behalf of Raymond as these were tangential issues not developed in the record.

Reversed in part.

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