(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
State Farm Mutual Automobile Insurance Company v. Licensed Beverage Insurance Exchange (A-90-95)
Argued February 14, 1996 -- Decided July 31, 1996
COLEMAN, J., writing for a unanimous Court.
The issue on appeal is whether, pursuant to the reimbursement provision, N.J.S.A. 39:6A-9.1 of the
New Jersey Automobile Reparation Reform Act, a tavern is a "tortfeasor" who is potentially responsible for
reimbursing personal injury protection (PIP) benefits paid by a private passenger automobile carrier to one
of its insureds because of the tavern's negligence.
On March 1, 1992, George Schrope and Peter Zoon were patrons of the Boulevard Pub in
Hackensack, New Jersey. Both men were served alcoholic beverages while they were visibly intoxicated.
Later that evening, Zoon drove with Schrope to their home in Hopatcong. Because Zoon was unable to
maneuver his car into the garage, Schrope exited the vehicle, stood in front of it, and attempted to direct
Zoon into the garage. Zoon drove the car directly into Schrope, pinning him between the car bumper and
the garage entrance. Schrope suffered severe leg injuries.
As a result of the accident, State Farm Mutual Automobile Insurance Company (State Farm) paid
$35,330.72 in PIP benefits on behalf of its insured, Schrope. State Farm instituted suit against the Licensed
Beverage Insurance Exchange (LBIE), the reinsurer of the Boulevard Pub, to recover those payments
pursuant to the PIP reimbursement provision.
On March 18, 1994, the trial court granted summary judgment in favor of State Farm, requiring
LBIE to submit the reimbursement claim to arbitration, as required by the reimbursement provision. The
court, relying on All State Insurance Co. v. Coven, reasoned that the provision applies to "any tortfeasor" who
may be liable, without limitation.
The order requiring arbitration was appealed. LBIE argued that the "any and all tortfeasor" phrase
applied only to those tortfeasors who owned commercial vehicles. State Farm countered that the language of
the reimbursement provision was broad enough to encompass "any and all tortfeasors." The Appellate
Division affirmed the decision of the lower court.
The Supreme Court granted certification.
HELD: The reimbursement right conferred by N.J.S.A. 39:6A-9.1 encompasses all tortfeasors that are not
subject to the No-Fault Law.
1. Because the "any tortfeasor..." phrase is not unambiguous, the Court must consider other rules of
statutory interpretation, including the determination of the Legislature's intent. (pp. 3-5).
2. The legislative intent behind the reimbursement provision was to alleviate the imbalance between automobile insurers and commercial-vehicle insurers by reducing the cost of insurance for automobile insurers and allowing automobile insurers to recover PIP payments through reimbursement. Since the enactment of the reimbursement provision, this Court, as well as others, have acknowledged that the reimbursement provision confers a primary reimbursement right on the injured party's insurer. That right may be exercised against: 1) the insurer of a tortfeasor who was not required to maintain PIP coverage; or 2) a tortfeasor who willfully fails to carry the requisite PIP coverage. LBIE is an insurer of the Boulevard Pub,
a tortfeasor that is not required to carry PIP coverage. Therefore, it falls into one of the two classes of
tortfeasors from which an automobile insurer may seek reimbursement. (pp. 5-12)
3. N.J.S.A. 17:28-1.3 (section 1.3), which requires commercial vehicles to provide PIP coverage for
pedestrians injured in accidents, was enacted at the same time the reimbursement provision. Because section
1.3 and the reimbursement provision were enacted together as part of the same Act, they must be
interpreted together. Both provisions were intended to remedy the problems discussed in Justice Sullivan's
dissent in Aetna Insurance Company v. Gilchrist Brothers, Inc.. The Legislature intended the phrase "any
tortfeasor..." to have a broad meaning. The reimbursement provision was enacted to alleviate the imbalance
between commercial insurers and private automobile insurers by reducing the cost of insurance for
automobile owners and allowing automobile insurers to recover PIP through reimbursement. Thus, the
"other than pedestrians" phrase used in the reimbursement provision was intended to ensure the inclusion of
owners and operators of commercial vehicles under the statute, not to exclude all otherwise eligible
tortfeasors. If the intent of the Legislature was otherwise, it would not have used language intended to
ensure such a broad scope of coverage. (pp. 12-16)
4. The more expansive interpretation of the reimbursement provision accords with its legislative history and
is consistent with the legislative objective of reducing insurance premiums for owners of private-passenger
vehicles. Permitting PIP carriers to assert such reimbursement claims would not be inconsistent with the No-Fault Law's primary goal of providing quick compensation to injured motorists. Such reimbursement suits
are generally resolved through arbitration, and are relatively rare; therefore, there is no threat of that courts
will be overrun with litigation by insurance companies seeking PIP reimbursement. If the Court has misread
the intent of the Legislature, it may readily clarify its intent to limit the reimbursement right as LBIE
contends. (p. 17)
Judgment of the Appellate Division is AFFIRMED.
JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI and STEIN join in JUSTICE
COLEMAN's opinion.
SUPREME COURT OF NEW JERSEY
A-
90 September Term 1995
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Plaintiff-Respondent,
v.
LICENSED BEVERAGE INSURANCE
EXCHANGE,
Defendant-Appellant.
Argued February 14, 1996 -- Decided July 31, 1996
On certification to the Superior Court,
Appellate Division.
Daniel S. Jahnsen argued the cause for
appellant (Grossman & Kruttschnitt,
attorneys; Anthony M. Tracy, on the brief).
Brian P. Fleming argued the cause for
respondent (Maloof, Lebowitz, Connahan &
Oleske, attorneys).
The opinion of the Court was delivered by
COLEMAN, J.
The issue raised in this appeal is whether a tavern is a
"tortfeasor" under the New Jersey Automobile Reparation Reform
Act's reimbursement provision, N.J.S.A. 39:6A-9.1, who is
potentially responsible for reimbursing personal injury
protection (PIP) benefits paid by a private passenger automobile
carrier to one of its insureds because of the tavern's
negligence.
The trial court, relying on Allstate Ins. Co. v. Coven,
264 N.J. Super. 240 (App. Div. 1993), submitted the issue of
reimbursement, pursuant to N.J.S.A. 39:6A-9.1, to arbitration.
The order requiring arbitration was appealed, and in an
unpublished opinion, the Appellate Division affirmed. We granted
certification,
142 N.J. 516 (1995), and now affirm.
On March 1, 1992, George Schrope and Peter Zoon were patrons
of the Boulevard Pub in Hackensack, New Jersey. Both men were
served alcoholic beverages while they were visibly intoxicated.
Later that evening, Zoon drove himself and Schrope to their
mutual residence in Hopatcong. Upon arriving home, Zoon was
unable to maneuver his automobile into the garage. In an attempt
to be of assistance, Schrope exited the vehicle, and stood in
front of it in an effort to direct Zoon into the garage. In the
process, Zoon drove the vehicle directly into Schrope, pinning
him between the car bumper and the garage entrance, causing
severe leg injuries.
As a result of that accident, State Farm Mutual Automobile
Insurance Company (State Farm) paid $35,330.72 in PIP benefits on
behalf of its insured, Schrope. State Farm instituted the
present litigation against Licensed Beverage Insurance Exchange
(LBIE), the reinsurer of the Boulevard Pub, to recover those
payments pursuant to the PIP reimbursement statute, N.J.S.A.
39:6A-9.1.
On March 18, 1994, the trial court heard arguments on an
order to show cause why the LBIE should not be required to submit
the reimbursement claim to arbitration as required by the
reimbursement statute. Summary judgment was granted in favor of
State Farm, requiring the LBIE to submit to arbitration. The
trial court reasoned, relying on Coven, that the statute applies
to "any tortfeasor" who may be liable, without limitation.
On appeal, State Farm argued that the language of N.J.S.A.
39:6A-9.1 was broad enough to encompass "any and all
tortfeasors." The LBIE argued that the phrase was limited to
apply only to those tortfeasors who owned commercial vehicles.
The Appellate Division agreed with State Farm. It reasoned that
"an alternative and more expansive reading of the statute appears
to us better to satisfy the legislative concern that the risk be
spread to the insurers of all responsible tortfeasors."
This appeal focuses on the scope of the phrase "any
tortfeasor . . ." set forth in the reimbursement statute. That
statute provides:
Any insurer, health maintenance
organization or governmental agency paying
. . . [PIP] 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 [PIP] or
medical expense benefits coverage other than
for pedestrians, under the laws of this State
. . . or although required did not maintain
[PIP] 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 . . . is legally entitled
to recover the amount of payments and the
amount of recovery . . . 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).]
The LBIE argues that its insured, the Boulevard Pub, is not
subject to the requirements of the reimbursement statute because
the Legislature intended the "any tortfeasor . . ." phrase to
encompass only those tortfeasors who own commercial vehicles, as
set forth in N.J.S.A. 17:28-1.3. That interpretation, the LBIE
maintains, becomes manifest when N.J.S.A. 17:28-1.3 and N.J.S.A.
39:6A-9.1 are read together. State Farm, on the contrary,
contends that the "any tortfeasor . . ." phrase is not limited to
those tortfeasors who own commercial vehicles, but rather applies
to any and all tortfeasors.
When a court is called upon to interpret a statute, certain rules of statutory interpretation may be of assistance. State Farm contends that the "any tortfeasor . . ." phrase is unambiguous and should be accorded its plain meaning. Kimmelman v. Henkels & McCoy, Inc., 108 N.J. 123, 128 (1987); Renz v. Penn Cent. Corp., 87 N.J. 437, 440 (1981). Because we are satisfied that the "any tortfeasor . . ." phrase is not unambiguous, we must consider other rules of statutory interpretation. Young v.
Schering Corp.,
141 N.J. 16, 25 (1995). "In the interpretation
of a statute our overriding goal has consistently been to
determine the Legislature's intent." Roig v. Kelsey,
135 N.J. 500, 515 (1994) (citing Lesniak v. Budzash,
133 N.J. 1, 8
(1993)). To make that decision, a court should consider the
"legislative policy underlying the statute and any history which
may be of aid." Lesniak, supra, 133 N.J. at 8.
"[A] court should avoid a literal interpretation of
individual statutory terms or provisions that would be
inconsistent with the overall purpose of the statute." Young,
supra, 141 N.J. at 25; Suter v. San Angelo Foundry & Mach. Co.,
81 N.J. 150, 160 (1979). A single statutory term or phrase
should be considered as part of the entire statutory scheme
rather than in a vacuum. Maritime Petroleum Corp. v. City of
Jersey City,
1 N.J. 287, 298 (1949).
An understanding of the history of the reimbursement statute
is important in defining its scope. In 1972, the State
Legislature enacted the New Jersey Automobile Reparation Reform
Act, N.J.S.A. 39:6A-1 to -35, commonly known as the "No-Fault"
law. The Act "encompasse[d] the recommendations of the
Automobile Insurance Study Commission created under Joint
Resolution 4 of 1970." Gambino v. Royal Globe Ins. Co.,
86 N.J. 100, 105 (1981) (quoting Sponsor's Statement to L. 1972, c. 70).
An interpretation of the purpose of the No-Fault law in a
later case is informative:
The Legislature's intent in adopting the act was to
provide a means of quickly compensating injured
motorists. The tort system was considered to be an
inefficient means of compensation since it required
expensive and time-consuming litigation, and since it
would not compensate drivers whose own fault caused
their injuries. The act contemplated the elimination
of burdensome administrative and investigative expenses
and a consequent lowering of insurance premiums.
* * *
The intent of the No Fault law is that each automobile
insurer should pay the medical expenses of its insured.
It is the primary coverage. Substantial savings to
insurers and the public were expected to result from
the elimination of intercompany litigation.
[Garden State Fire & Casualty Co. v. Commercial Union
Ins. Co.,
176 N.J. Super. 301, 305 (App. Div. 1980).]
Prior to the enactment of the No-Fault law, insurers were
free to file suit against other insurers to recover payments for
medical expenses based on the common-law right of subrogation.
The No-Fault Act was intended to eliminate this type of
litigation; however, it did allow for a two-year transition
period between 1973 and December 31, 1974, during which time
insurers paying PIP benefits were able to recover the PIP costs
from the tortfeasor's insured. Unsatisfied Claim & Judgment Fund
Bd. v. New Jersey Mfrs. Ins. Co.,
138 N.J. 185, 197 (1994).
The reimbursement option was embodied in a temporary
provision, N.J.S.A. 39:6A-9, now repealed, which provided a
limited right to "subrogation" that could be pursued only through
arbitration.See footnote 1 It was suggested that this two-year period
allowing intercompany arbitration was necessary to compile
information for the rate-setting process. Pennsylvania Mfrs.
Ass'n Ins. Co. v. Government Employees Ins. Co.,
136 N.J. Super. 491, 499 (App. Div. 1975) (citing Mario A. Iavicoli, No Fault &
Comparative Negligence in New Jersey § 50, at 117 (1973)), aff'd,
72 N.J. 348 (1977). Subrogation was disfavored eventually
because "it merely shifted money and paper among insurance
companies at additional administrative expense." James W.
Kerwin, Survey of Insurance Law,
31 Rutgers L. Rev. 519, 542
(1978).
Cirelli v. Ohio Casualty Ins. Co.,
72 N.J. 380 (1977),
involved an accident between a New York resident and a New Jersey
resident insured under a policy allowing PIP reimbursement. Id.
at 383-87. Cirelli, the New Jersey resident, was paid PIP
benefits by his carrier and then instituted suit in New York,
seeking to recover as part of his damages the PIP payments. His
insurance policy, however, contained a right of subrogation for
PIP payments. The accident occurred on March 1, 1974, and the
two-year statutory right of subrogation did not expire until
December 31, 1974. Id. at 383, 385. Cirelli sought a judgment
declaring that the right of subrogation in the policy was
invalid. Id. at 384. Although the statutory procedure for
resolving the issue was intercompany arbitration, the Court
concluded that the intercompany arbitration requirement was not
enforceable because the Legislature did not have the "power to
compel an out-of-state insurer covering an out-of-state motor
vehicle for tort liability to arbitrate." Id. at 386. The Court
nonetheless enforced the subrogation right included in the policy
pursuant to N.J.S.A. 39:6A-9 to prevent Cirelli from obtaining a
double recovery for his PIP benefits and to prevent out-of-state
insurance carriers from receiving a windfall. Id. at 387-88.
Aetna Ins. Co. v. Gilchrist Bros., Inc.,
85 N.J. 550 (1981),
involved an accident that occurred on April 5, 1975. Id. at 554.
Aetna's insured, the operator of a private passenger automobile,
was struck by a tractor trailer owned by defendant and insured by
Home Indemnity Co. (Home). Ibid. Aetna paid approximately
$30,000 in PIP benefits on behalf of its insured and advised Home
in August 1975 of its subrogation claim. Id. at 555. Home
rejected the claim, asserting there was no legal basis for
subrogation. Ibid. Thereafter, Home settled the claims of
Aetna's insured, and Aetna, as subrogee, instituted suit against
the owner and operator of the commercial truck that caused the
accident seeking reimbursement of the PIP benefits paid. Ibid.
The Court found that Aetna's right of subrogation was
derivative in nature and that it obtained "only the rights of the
insured against the tortfeasor subject to defenses of the
wrongdoer against the insured." Id. at 560-61. The Court
concluded that the No-Fault law "has eliminated the ability of
the insured in an action in this State to recover damages from
the tortfeasor for the amounts collectible or paid under PIP
[N.J.S.A. 39:6A-12]," Aetna had no right to recover reimbursement
from the wrongdoer or his [or her] carrier. Id. at 562. The
Court noted that a PIP-insured's action against the tortfeasor
would have constituted a double recovery, as it would have sought
payments for the same items that were compensated by PIP
coverage. Ibid.
Justice Sullivan dissented, arguing that the decision would
result in "private automobile owners "subsidizing" the cost of
insurance on non-PIP-covered commercial vehicles in this State"
and that this result was inequitable and in conflict with the
premium-reducing objection of the No-Fault law. Id. at 567-68
(Sullivan, J., dissenting). He pointed out that, based on the
majority's decision, automobile insurers would be barred from
suing any party for PIP costs incurred regardless of whether the
tortfeasor is[:]" (1) a commercial trucker who is not subject to
the no-fault law; (2) an out-of-state driver not subject to the
no-fault law who negligently causes an accident with a no-fault
insured in New Jersey; (3) an uninsured motorist who is required
by law to carry no-fault coverage but culpably fails to do so; or
(4) a person who does not own an automobile but who causes an
accident, such as by throwing a brick through a no-fault
insured's windshield. Id. at 568 n.2.
The majority's response to Justice Sullivan's arguments was
that it would be appropriate for the Legislature, rather than the
Court, to resolve the imbalance between automobile insurers and
commercial-vehicle insurers. Id. at 566.
The Legislature responded fewer than three years later by
enacting N.J.S.A. 39:6A-9.1 under the "New Jersey Automobile
Insurance Freedom of Choice and Cost Containment Act of 1984," L.
1983, c. 362 (1984 Act), effective October 4, 1983. Section 9.1
granted limited rights of reimbursement to PIP carriers. Rather
than reviving the difficulties of subrogation previously
identified in Cirelli and Aetna, section 9.1 provided for a new
right of reimbursement that was primary and not linked to any
purported subrogation right. Wilson v. Unsatisfied Claim &
Judgment Fund Bd.,
109 N.J. 271, 280 (1988); Sherman v. Garcia
Constr., Inc.,
251 N.J. Super. 352, 356 (App. Div. 1991). The
legislative intent behind this statute was to alleviate the
imbalance identified by Justice Sullivan by reducing the cost of
insurance for automobile owners and allowing automobile insurers
to recover PIP through reimbursement. UCJF, supra, 138 N.J. at
201; Liberty Mutual Ins. Co. v. Selective Ins. Co.,
271 N.J.
Super. 454, 458 (App. Div. 1994); IFA Ins. Co. v. Waitt, 270 N.J.
Super. 621, 627 (App. Div.), certif. denied,
136 N.J. 295 (1994);
Tyberg v. Kokinidis,
283 N.J. Super. 84, 92 (Law Div. 1995).
Since the enactment of section 9.1, this Court, as well as
others, have acknowledged that section 9.1 partially overrules
Aetna, supra, in that it "`confers a primary right of
reimbursement on the injured party's insurer.'" Wilson, supra,
109 N.J. at 280 (quoting Buoni v. Browning Ferres Indus.,
219 N.J. Super. 96, 100 (Law Div. 1987)); accord UCJF, supra, 138
N.J. at 191; Sherman, supra, 251 N.J. Super. at 356. That right
may be exercised against: (1) the insurer of a tortfeasor who was
not required to maintain PIP coverage; or (2) a tortfeasor who
wilfully fails to carry the requisite PIP coverage, i.e., the
uninsured motorist. UCJF, supra, 138 N.J. at 193; see also
Liberty Mutual, supra, 271 N.J. Super. at 458 (acknowledging PIP
insurer's entitlement to seek recovery for PIP benefits paid to
victim from commercial tortfeasor's insurer and adding that
commercial excess liability insurer becomes tortfeasor's insurer
when primary carrier exhausts limits); IFA Ins., supra, 270 N.J.
Super. at 622-23 (acknowledging that statute allows PIP insurer
to seek reimbursement from tortfeasor's insurer where tortfeasor
is commercial-vehicle owner); Range v. McLarty,
246 N.J. Super. 196, 197, 200 (Law Div. 1990) (holding UCJF had direct right to
reimbursement for PIP benefits paid to passenger in uninsured
automobile from tortfeasor, a commercial-vehicle owner); Buoni,
supra, 219 N.J. Super. at 97-98 (acknowledging automobile
insurer's right to recover benefits paid to injured insured from
tortfeasor where tortfeasor causing accident operated commercial
vehicle).
The most significant case interpreting the scope of section
9.1 is the Court's decision in UCJF, supra. The issue raised was
whether the UCJF was entitled to reimbursement for PIP benefits
from a tortfeasor's automobile insurance carrier. In rejecting
the argument that the "any insured tortfeasor" language was broad
enough to include insurers of private-passenger automobiles, the
Court held the UCJF was not entitled to reimbursement under
section 9.1 from a tortfeasor's private-passenger automobile
insurer. Unsatisfied Claim & Judgment Fund Bd., 138 N.J. at 194.
The Court reasoned that the tortfeasor did not fall into either
of the two classes of tortfeasors from which an automobile
insurer may seek reimbursement, namely: "uninsureds, and
insureds not required to carry PIP coverage." Id. at 194-95.
The LBIE is an insurer of the Boulevard Pub that is not required
to carry PIP coverage.
Simultaneous with the enactment of N.J.S.A. 39:6A-9.1 was
the enactment of N.J.S.A. 17:28-1.3, which supplements N.J.S.A.
17:28-1.1. The new provision provides:
Every liability insurance policy issued in this State
on a motor vehicle, exclusive of an automobile as
defined in [N.J.S.A. 39:6A-2a], but including a
motorcycle, or on a motorized bicycle, insuring against
loss resulting from liability imposed by law for bodily
injury, death, and property damage sustained by any
person arising out of the ownership, operation,
maintenance, or use of a motor vehicle or motorized
bicycle shall provide personal injury protection
coverage benefits, in accordance with [N.J.S.A. 39:6A-4], to pedestrians who sustain bodily injury in this
State caused by the named insured's motor vehicle or
motorized bicycle by being struck by an object
propelled by or from the motor vehicle or motorized
bicycle.
[N.J.S.A. 17:28-1.3.]
The LBIE argues that the simultaneous enactment of N.J.S.A. 17:28-1.3, which requires commercial vehicles and other previously non-covered vehicles to carry PIP coverage for pedestrians, indicates that N.J.S.A. 39:6A-9.1 was intended to correct insurance irregularities with regard to commercial vehicles. The LBIE also relies on the following language in N.J.S.A. 39:6A-9.1: "[a]n insurer . . . 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 . . . coverage, other than for pedestrians." N.J.S.A. 39:6A-9.1 (emphasis added). The LBIE argues that "by including the phrase `other than for pedestrians,' the Legislature undoubtedly intended to limit the class of tortfeasors responsible for PIP reimbursement to commercial motor vehicle owners and operators (and to other motor vehicles references in section 1.3) who have insurance coverage." The LBIE relies on Key Agency v. Continental Casualty Co., 31 N.J. 98 (1959) in which this Court stated, "[i]n attempting to discover legislative intention in any law, it is proper to consider other laws which pertain to a
similar subject matter and especially those which were enacted
during the same legislative session as the law in question." Id.
at 103.
The effect of N.J.S.A 17:28-1.3 is to require insurers of
commercial vehicles to provide PIP coverage for pedestrians
injured in accidents. Both sections 39:6A-9.1 and 17:28-1.3 were
included in the Act to "tighten statutory eligibility
requirements for personal injury protection coverage so as to
comport with the original intent of the no-fault law." Statement
to Assembly Bill No. 3981, at 405 (Oct. 4, 1983), reprinted in
N.J.S.A. 17:28-1.1.
Most of the cases interpreting section 9.1 involve
commercial vehicles. E.g., Otto v. Prudential Property &
Casualty Ins. Co.,
278 N.J. Super. 176, 178 (App. Div. 1994);
Liberty Mutual, supra, 271 N.J. Super. at 455; Waitt, supra, 270
N.J. Super. at 622; New Jersey Auto. Full Ins. Underwriting Ass'n
v. Liberty Mut. Ins. Co.,
270 N.J. Super. 49, 51 (App. Div.
1994); Universal Underwriters Ins. Co. v. Phillips,
262 N.J.
Super. 588, 589 (App. Div. 1993); Sherman, supra, 251 N.J. Super.
at 354; Hanover Ins. Co. v. Lewis,
260 N.J. Super. 380, 381 (Law
Div. 1992), overruled by IFA Ins. Co., supra, 270 N.J. Super. at
626-27; Buoni, supra, 219 N.J. Super. at 97; see also Martin v.
Home Ins. Co.,
141 N.J. 279, 282-83 (1995) (involving Unsatisfied
Claim and Judgment Fund); Molnar v. Hedden,
138 N.J. 96, 98-99
(1994) (involving collision with motorcyclist); Wilson, supra,
109 N.J. at 272-73 (involving collision between privately owned
vehicle and school bus); Rowell v. Sluzak,
206 N.J. Super. 210,
211-12 (App. Div. 1985) (dealing with nonresident motorist); New
Jersey Auto. Full Ins. Underwriting Ass'n v. Independent Fire
Ins. Co.,
253 N.J. Super. 75, 77-78 (Ch. Div. 1991) (same).
Coven, supra, on which the courts below relied, is an
exception. Rather than a commercial truck owner or operator, it
involves a hospital and a physician. Coven, supra, 264 N.J.
Super. at 243-44. Allstate's insured was more than eight-months
pregnant when injured in a collision with a flagpole. Id. at
243. After the accident, the insured was rushed to a hospital
where her son was delivered by caesarean section. Ibid. The son
suffered severe brain damage and required extensive medical
treatment. Ibid. Allstate paid over one million dollars in
medical expenses to its insured under its PIP coverage. Ibid.
Allstate alleged malpractice against the doctor and the hospital
and sought from them reimbursement of the PIP payments. Id. at
244. The Appellate Division held that Allstate did not have a
common-law right of subrogation through its insured, but could
bring a direct action for reimbursement against the medical
tortfeasors pursuant to N.J.S.A. 39:6A-9.1. Id. at 246.
We believe the Legislature intended the phrase "any
tortfeasor . . ." to have a broad meaning. Because sections 1.3
and 9.1 were enacted together, as part of the same Act, it is
appropriate to interpret them in pari materia. Both were
intended to remedy the problems discussed by Justice Sullivan in
his dissent in Aetna. The "other than for pedestrians" phrase
used in section 9.1 was intended merely to ensure the inclusion
of owners and operators of commercial vehicles under the statute,
not to exclude all otherwise eligible tortfeasors. If the intent
of the Legislature was to limit the application of section 9.1 to
cases involving commercial-vehicle tortfeasors, it could have
done so with much greater clarity and simplicity than with the
language used in the statute, which apparently was intended to
ensure a broad scope of coverage.
In addition, the more expansive interpretation of section
9.1 accords with the statute's legislative history. As expressed
by then-Governor Kean, the purpose of the 1984 Act was to "bring
about long sought after reductions in premiums for New Jersey
motorists." Statement of Governor Thomas H. Kean accompanying L.
1983, c. 362; accord Liberty Mut., supra, 271 N.J. Super. at 458.
The 1984 Act contained various provisions intended to reduce the
premiums paid by owners of private-passenger vehicles. Such
provisions included granting insureds the options of having
deductibles on their PIP benefits, L. 1983, c. 362, § 13(a),
limiting their right to sue for pain-and-suffering damages
resulting from an automobile accident, id. § 14, and declining to
receive PIP coverage for funeral expenses and lost wages. Id. §
13(b).
Section 9.1's right of reimbursement, id. § 20, must be
understood in the context of the 1984 Act's primary purpose of
reducing the cost of insuring private-passenger vehicles.
Enabling PIP carriers to seek reimbursement in all cases where
the tortfeasor is not subject to the No-Fault law would reduce
automobile-insurance premiums and would ensure that the cost of
PIP benefits "will be borne by . . . the individuals responsible
for the injury who, in good conscience, ought to pay them."
Aetna, supra, 85 N.J. at 568 n.2 (Sullivan, J., dissenting).
Moreover, permitting PIP carriers to assert such reimbursement
claims would not be inconsistent with the No-Fault law's primary
goal of providing quick compensation to injured motorists. See
Garden State Fire & Casualty Co. v. Commercial Union Ins. Co.,
176 N.J. Super. 301, 305 (App. Div. 1980). Allowing PIP-reimbursement suits to go forward would not delay injured
parties' receipt of PIP benefits, but would enable PIP carriers
to pass on PIP costs to the parties responsible for the injuries.
Also, because such reimbursement suits generally are resolved
through arbitration, see N.J.S.A. 39:6A-9.1, and are relatively
rare (as revealed by the dearth of reported opinions on point),
there is no threat of courts being overrun with litigation by
insurance companies seeking PIP reimbursement.
We hold that the reimbursement right conferred by section
9.1 encompasses all tortfeasors that are not subject to the No-Fault law. That interpretation of the statute is consistent with
the legislative objective of reducing insurance premiums for
owners of private-passenger vehicles. If, however, we have
misread the intent of the Legislature, it may readily clarify its
intent to limit the reimbursement right as defendant contends.
The judgment of the Appellate Division is affirmed.
JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI and STEIN join in JUSTICE COLEMAN's opinion.
NO. A-90 SEPTEMBER TERM 1995
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Plaintiff-Respondent,
v.
LICENSED BEVERAGE INSURANCE
EXCHANGE,
Defendant-Appellant.
DECIDED July 31, 1996
Justice Handler PRESIDING
OPINION BY Justice Coleman
CONCURRING OPINION BY
DISSENTING OPINION BY
Footnote: 1 The full text of N.J.S.A. 39:6A-9 provided:
Any insurer paying benefits in accordance with the provisions of section 4 and section 10, [PIP] coverage, regardless of fault, shall be subrogated to the rights of any party to whom it makes such payments, to the extent of such payments. Such subrogated insurer may only by intercompany arbitration or by intercompany agreement exercise its subrogation rights against only the insurer of any person liable for such damages in tort provided, however, that such insurer may exercise its subrogation rights directly against any person required to have in effect the coverage required by this act and who failed to have such coverage in effect at the time of the accident. The exemption from tort liability provided in section 8 does not apply to the insurers' subrogation rights. On and after 2 years from the effective date of this act the provisions of this section shall be inoperative.