NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 15, 2013
On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-8180-12.
Gregory E. Peterson argued the cause for appellant (Dyer & Peterson, P.C., attorneys; Mr. Peterson, on the brief).
David J. Dickinson argued the cause for respondent (McDermott & McGee, L.L.P., attorneys; Gabrielle J. Pribula, on the brief).
Before Judges Yannotti and Ashrafi.
This appeal arises from a dispute between two automobile insurance carriers over responsibility for payment of personal injury protection (PIP) benefits. Defendant IFA Insurance Company appeals from two January 11, 2013 orders by which the Law Division compelled arbitration of the dispute. We affirm.
The relevant facts are essentially undisputed. Carmen Burgos was injured in a motor vehicle accident on November 16, 2006, while crossing the street as a pedestrian. She had an automobile insurance policy with plaintiff Allstate New Jersey Insurance Company. She was also a named insured on her husband's separate auto insurance policy issued by IFA. Allstate began paying PIP benefits on behalf of Burgos within two weeks of the accident.
As of September 2007, claims adjustors for Allstate and IFA were communicating about the claims. Allstate provided to IFA a copy of the Allstate policy and its PIP ledger showing payments it had made for Burgos's medical expenses. The Allstate adjustor believed that IFA would accept responsibility for a pro rata share. In January 2008, Allstate formally sought concurrent coverage from IFA for Burgos's medical expenses and requested that IFA pay half the amount of PIP benefits and costs. IFA wrote to Allstate in July 2008 disclaiming coverage on the basis of unspecified exclusions in its policy.
By October 2008, Allstate had exhausted the limit of PIP coverage payable on behalf of Burgos, $250, 000.
Allstate did not take any further action to recover a pro rata share of its payments from IFA until November 2012. At that time, Allstate filed a complaint in the Law Division and obtained an order to show cause to compel IFA to arbitrate the responsibility of each insurer for the benefits Allstate had paid. IFA filed an answer and simultaneously moved for summary judgment to dismiss Allstate's complaint, arguing that Allstate had not made a timely demand for arbitration. The Law Division heard argument and ruled in Allstate's favor. It issued a letter-opinion and two orders, one denying IFA's motion for summary judgment and the second compelling arbitration, including on the issue of whether Allstate had made a timely demand for arbitration.
On appeal, IFA contends that the timeliness issue is a threshold legal question that must be decided by the court before IFA can be compelled to arbitrate the dispute about its obligation on the PIP expenses. Citing O'Connell v. New Jersey Manufactures Insurance Co., 306 N.J.Super. 166, 172 (App. Div. 1997), appeal dism., 157 N.J. 537 (1998), IFA claims an arbitrator does not have jurisdiction to hear the matter unless the court determines first that IFA is subject to arbitration under the applicable statute. We disagree.
N.J.S.A. 39:6A-11 provides for mandatory inter-company arbitration of disputes between insurance carriers regarding responsibility to pay PIP benefits. Under the statute, the maximum PIP coverage available to an insured remains the same where more than one insurance carrier is liable to pay PIP benefits. Ibid. The statute provides that: "any insurer paying the benefits shall be entitled to recover from each of the other insurers, only by inter-company arbitration or inter-company agreement, an equitable pro-rata share of the benefits paid." Ibid. So the statute mandates ...