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State Farm Indem. Co. v. National Liab. & Fire Ins. Co.

Superior Court of New Jersey, Appellate Division

March 4, 2015

STATE FARM INDEMNITY COMPANY, Plaintiff-Respondent,
v.
NATIONAL LIABILITY & FIRE INSURANCE COMPANY, Defendant-Appellant

Argued: February 10, 2015,

Approved for Publication March 4, 2015.

On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-1846-14.

Michael Eatroff argued the cause for appellant ( Methfessel & Werbel, attorneys; Mr. Eatroff, on the brief).

Suzanne E. Mayer argued the cause for respondent ( Newman & Andriuzzi, attorneys; Ann Dee Lieberman and Ms. Mayer, on the brief).

Before Judges REISNER, HAAS and HIGBEE. The opinion of the court was delivered by REISNER, P.J.A.D.

Page 133

[439 N.J.Super. 534] OPINION

REISNER, P.J.A.D.

This appeal concerns the interpretation of N.J.S.A. 39:6A-11, which governs disputes between insurance companies over contribution for personal injury protection (PIP) benefits. Defendant National Liability & Fire Insurance Company (National) appeals from a July 25, 2014 order compelling arbitration of a contribution claim by plaintiff State Farm Indemnity Company (State Farm). National contends that the trial court should have determined whether it owed coverage to the accident victim, before requiring that it proceed to arbitration over State Farm's claim for contribution for PIP benefits State Farm paid to the victim. Interpreting

Page 134

the statute in light of the clear legislative purpose favoring arbitration of PIP disputes, and in light of settled precedent, we affirm the trial court's ruling that the entire dispute should be submitted to arbitration. We also conclude that State Farm properly sought to enforce this arbitration demand by filing an order to show cause pursuant to Rule 4:67-1(a).

[439 N.J.Super. 535] N.J.S.A. 39:6A-11 caps the total amount of PIP benefits payable if multiple insurers owe PIP coverage to the same accident victim, and it defines the method by which an insurer that has paid the victim all of the PIP benefits due may recover a pro-rata share from the other covering insurers. In one very long sentence, which we have slightly truncated to remove irrelevant text, the statute reads as follows:

If two or more insurers are liable to pay [PIP] benefits . . . for the same bodily injury, or death, of any one person, the maximum amount payable shall be as specified in [ N.J.S.A. 39:6A-4 and 39:6A-10], [ N.J.S.A. 39:6A-3.1] and [ N.J.S.A. 39:6A-3.3], respectively, if additional first party coverage applies and any insurer paying the benefits shall be entitled to recover from each of the other insurers, only ...

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