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Oyola v. Liu

Superior Court of New Jersey, Appellate Division

July 15, 2013

GEORGE OYOLA and AUDREY OYOLA, Plaintiffs-Respondents,
v.
XING LAN LIU, WEYNA CHEN, CONSUMER FIRST INSURANCE COMPANY, Defendants, and NEW JERSEY PROPERTY-LIABILITY INSURANCE GUARANTY ASSOCIATION,

Argued April 30, 2013

On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-10375-10.

Mark M. Tallmadge argued the cause for appellant (Bressler, Amery & Ross, attorneys; Mr. Tallmadge, on the briefs).

James J. Mahoney argued the cause for respondents (James J. Mahoney, P.C., attorneys; Mr. Mahoney and Xavier A. Nuñez, on the brief).

Before Judges Alvarez, Waugh and St. John.

OPINION

ALVAREZ, J.A.D.

In this appeal, defendant New Jersey Property-Liability Insurance Guaranty Association (Association) seeks reversal of the grant of summary judgment to plaintiffs George Oyola (Oyola) and Audrey Oyola (together referred to as the Oyolas). The Association was ordered to pay to Oyola, on behalf of an insolvent insurer, $85, 000 for injuries Oyola sustained in a motor vehicle accident. The Association contends that under New Jersey's Property-Liability Insurance Guaranty Association Act (Act), N.J.S.A. 17:30A-1 to -20, the amount of workers' compensation and other benefits received by Oyola, which exceed the Association's maximum liability for the claim, although less than Oyola's damages, should result in extinguishing any liability the Association might have towards his loss. Because we conclude, as did Judge Dennis F. Carey, III, that the workers' compensation and other payments should be offset only against the insured's total damages in calculating the Association's obligation to pay, we affirm.

The facts and circumstances which give rise to the Oyolas' claim can be briefly summarized. On January 12, 2009, while Oyola was operating a flatbed truck in the course of his employment, he was struck and seriously injured by a vehicle driven by defendant Xing Lan Liu and owned by Weyna Chen. As a result, the Oyolas filed suit against Chen and Liu. That claim was resolved by payment of Chen's available liability policy maximum of $15, 000.

The Oyolas were insured by Consumer First Insurance Company (Consumer First), including $100, 000 in underinsured motorist coverage. The Oyolas also named Consumer First in their complaint, seeking underinsured motorists benefits. The Oyolas' policy provided that coverage would be reduced by the amount paid by the party "legally responsible" for the accident, or in this case $15, 000, the amount available through the responsible driver's coverage.

Consumer First, however, was declared insolvent in 2009 and was subsequently dismissed from the proceedings by stipulation. Thus on May 9, 2011, the Oyolas amended their complaint to join the Association as a direct party, alleging that pursuant to N.J.S.A. 17:30A-8(a)(1), it was "obligated to the extent of the covered claims against an insolvent insurer." In other words, the Oyolas sought from the Association the $85, 000 otherwise payable by Consumer First.

As of June 15, 2012, Oyola's workers' compensation carrier paid $158, 940.69 in medical expenses and $12, 133.42 in indemnity expenses for a total of $171, 074.11 on Oyola's behalf. A final disability determination is still pending. The parties have stipulated that Oyola's total damages will exceed recovery from solvent insurers, including workers' compensation, by at least $85, 000.

The parties moved for summary judgment in August 2012. The Association contended that it was relieved of any responsibility to make payment on Oyola's claim because the workers' compensation benefits exceeded the Association's obligation. It relied on the 2004 amendments to the Act in support of the argument. The Oyolas took the contrary position, that even after workers' compensation credits were applied to their total damages, the Association was obligated to satisfy their claim because their losses exceeded the $85, 000 otherwise payable under their Consumer First policy.

Judge Carey stated in a cogent and thoughtful oral decision that the 2004 amendments to the Act did not overturn our Supreme Court's interpretation of the relevant sections of the Act in Thomsen v. Mercer-Charles, 187 N.J. 197 (2006). Although the claim in Thomsen was pre-amendment, Judge Carey explained that the case nonetheless controlled:

nothing in [the] changes . . . would lead . . . this [c]ourt, at least, to believe that the purpose of the changes were to affect what, basically, is the Thomsen ...

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