On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-1829-08, L-2295-08 and L-8983-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Carchman and Lihotz.
In this dispute between two insurance companies concerning the appropriate forum for resolving the issue of responsibility for Personal Injury Protection (PIP) benefits, defendant American Millennium Insurance Company (AMIC or defendant) appeals from an order of the Law Division compelling it to arbitrate claims made by plaintiff Liberty Mutual Insurance Company (Liberty or plaintiff) for reimbursement for benefits paid to Liberty's insured. See N.J.S.A. 39:6A-9.1 (Section 9.1). We affirm.
These are the relevant facts. Defendant was the insurer of Zencar Motor Auto Sales, Inc. (Zencar), a used car dealership located in Woodbridge. In March 2006, Elaine Iacona (Iacona) purchased a 1997 Chevrolet Cavalier from Zencar in "as is" condition. The automobile's odometer indicated that it had already traveled 112,858 miles. Two weeks later, Iacona's daughter, Angela Iacona, then sixteen-years old, was operating the vehicle with a driver's permit, with her mother and another individual as passengers. They were traveling on Route 9 North in Sayreville when, allegedly, the brakes failed, causing the automobile to crash into a utility pole. A mechanic's report stated that the vehicle had traveled 113,179 miles, indicating it had been driven just over 300 miles since its purchase from Zencar. The mechanic opined that the vehicle's brake problems had pre-existed its recent purchase.
As a result of this incident, Iacona filed a lawsuit against both her daughter and Zencar, seeking damages for injuries allegedly sustained in the accident. In the complaint, Iacona alleged that Zencar sold her the vehicle with defective brakes. The vehicle was insured by Liberty, which, post-accident, paid PIP benefits in the amount of $38,736.32.*fn1
Liberty Mutual, thereafter, filed suit against AMIC and Zencar for reimbursement of all PIP benefits paid, pursuant to section 9.1. The complaint sought direct recovery against Zencar as the alleged tortfeasor, or, alternatively, to compel AMIC, as Zencar's insurer, to arbitrate the PIP reimbursement claims as required by statute.
After further motion practice, the Law Division judge issued two orders, wherein the judge consolidated the various lawsuits for discovery purposes only and compelled AMIC to arbitrate Liberty's PIP reimbursement claim utilizing a "private three person arbitration panel at the end of discovery[.]" Liberty and AMIC were to choose one arbitrator each, with the two arbitrators then agreeing upon a third and final arbitrator. Subsequently, Liberty filed a stipulation of dismissal for Zencar on September 26, 2008.
Although not related to the orders here, a summary judgment motion was heard on December 19, 2008, where the judge determined that AMIC had a continuing contractual obligation to defend and indemnify Zencar. In an oral opinion, the Law Division judge discussed the lack of evidence regarding Zencar's alleged culpability for the accident:
However, though disadvantaged, [AMIC's] likelihood of success in defending Zencar has not been adversely affected, for several reasons.
First, the report of Ms. Iacona's mechanic simply states that, upon inspection of the vehicle, there was no fluid in the brake master cylinder, and the right rear brakes drum had a leaky wheel cylinder.
The report further states, it's our opinion the wheel cylinder had been leaking for some time. This may very well be a net opinion.
Further, nowhere within the one page, three paragraph letter, does the mechanic state that any of the defects found caused the accident or even existed at the time that ...