Hagains v. Government Emp. Ins. Co.

• Decision Date: 13 May 1977
• Citation: 150 N.J.Super. 576,376 A.2d 224
• Parties: Catherine HAGAINS and James Hagains, her husband, Plaintiffs, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant.
• Court: New Jersey Superior Court

Page 576

150 N.J.Super. 576

376 A.2d 224

Catherine HAGAINS and James Hagains, her husband, Plaintiffs, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant.

Superior Court of New Jersey, Law Division.

May 13, 1977.

Barry J. Hockfield, Trenton, for plaintiffs (Joseph Asbell & Associates, Camden, attorneys).

Robert J. Forgash, Haddonfield, for defendant (Orlando, Forgash & Slimm, Haddonfield, attorneys).

CORUZZI, J. C. C., Temporarily Assigned.

These are cross-motions for summary judgment pursuant to R. 4:46-2. No material fact being challenged this determination concerns only legal questions of construction of the New Jersey Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 et seq., commonly called the "No Fault Law."

On August 2, 1975 plaintiff Catherine Hagains was involved in an automobile accident. At the time of the accident defendant Government Employees Insurance Company was the personal injury protection carrier for plaintiff Catherine Hagains. As a result of the accident plaintiffs had incurred various medical expenses, all of which have now been paid. Nevertheless, on June 21, 1976 plaintiffs filed a complaint against defendant, alleging the late payment of personal injury protection benefits in the nature of medical expenses arising from the accident of August 2, 1975. Plaintiffs seek (1) interest pursuant to N.J.S.A. 39:6A-5(c); (2) counsel fees pursuant to R. 4:42-9(a), and costs of suit.

The issues in this case appear to be ones of first impression. Plaintiffs here allege the late payment of personal injury protection benefits on the grounds that certain medical bills were not paid within 30 days of their submission to the defendant. The argument raised on behalf of plaintiffs is that once an insured presents his carrier with medical expenses following an automobile accident, the insurer has been presented with the required written notice of a covered loss for purposes of N.J.S.A. 39:6A-5(b). Consequently, unless the insurer can meet his statutory burden of proving that it is not responsible for the payment, the insurer must make payment on the bill within the 30-day period, pursuant to N.J.S.A. 39:6A-5(b).

In their motion for summary judgment plaintiffs claim, as a matter of law, that they are entitled to interest, costs and counsel fees for the late payment of four separate medical bills. The first item is the bill of John F. Kennedy Memorial Hospital in the amount of $1,192.95 concerning plaintiff's six-day admission from August 2, through August 8, 1975. The second item is the bill of the John F. Kennedy Memorial Hospital in the amount of $1,040 concerning plaintiff's ten-day admission from December 3 through December 13, 1975. The third item is the bill of Dr. Ralph V. Franciosi in the amount of $205. The fourth item is the bill of Kennedy Internal Medicine Specialists in the amount of $255.

Defendant, in its cross-motion for summary judgment on the issues of interest, attorneys fees and costs, contends that the only way for an insurer to know that a loss is a covered loss for purposes of N.J.S.A. 39:6A-5(b) is for that section to be read in pari materia with N.J.S.A. 39:6A-13(b). Defendant argues that the latter section gives the insurer the right to obtain the relevant medical records which, in turn, enable it to determine whether or not the medical bill is for treatment for injuries sustained in an automobile accident or whether the treatment is for an unrelated condition. Therefore, defendant's position is that, without reading N.J.S.A. 39:6A-5 in pari materia with N.J.S.A. 39:6A-13(b), there is no way for the insurance carrier to know that the submitted bill is for a covered loss. Consequently, the 30-day period mandated by N.J.S.A. 39:6A-5 does not begin to run until the carrier receives the necessary medical reports to establish that the bill was for a covered loss.

Clearly, when interpreting a statute the first task for any court is to discern and effectuate the intent of the Legislature. State v. Madden,61 N.J. 377, 294 A.2d 609 (1972). Our courts, in construing the intent of the legislators with respect to the No Fault Law, have consistently supported the proposition that the purpose of the act is to provide for the prompt payment of medical bills, lost wages and property damages without the injured party having to await the outcome of protracted litigation. Hoglin v. Nationwide Mut. Ins. Co., 144 N.J.Super. 475, 366 A.2d 345 (App.Div. 1976); Zyck v. Hartford Ins. Group, 143 N.J.Super. 580, 364 A.2d 32 (Law Div. 1976); Harris v. Osorio, 125 N.J.Super. 468, 311 A.2d 748 (Law Div. 1973).

This court is also well aware of the legislative mandate which requires that the act "shall be liberally construed so as to effect the purpose(s) thereof" N.J.S.A. 39:6A-16; Maros v. Transamerica Ins. Co., 143 N.J.Super. 307, 362 A.2d 1296 (Law Div. 1976). Of course, the No Fault Law, like all remedial statutes, is entitled to a liberal construction under our common law. Service Armament Co. v. Hyland, 70 N.J. 550, 362 A.2d 13 (1976); Carianni v. Schwenky, 38 N.J.Super. 350, 118 A.2d 847 (App.Div. 1956).

Mindful of the purposes and liberal construction which must be given the No Fault Law, the court now turns to an examination of the statute in question. N.J.S.A. 39:6A-5(b) reads in pertinent part:

Personal injury protection coverage benefits shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same. If such written notice is not furnished to the insurer as to the entire claim, any partial amount supported by written notice is overdue if not paid within 30 days after such written notice is furnished to the insurer. Any part or all of the remainder of the claim that is subsequently supported by written notice is overdue if not paid within 30 days after such written notice is furnished to the insurer; provided, however, that any payment shall not be deemed overdue where the insurer has reasonable proof to establish that the insurer is not responsible for the payment, notwithstanding that written notice has been furnished to the insurer. For the purpose of calculating the extent to which any benefits are overdue, payment shall be treated as being made on the date of a draft or other valid instrument which is equivalent to payment was placed in the United States mail in a properly addressed, postpaid envelope, or, if not so posted, on the date of delivery.

The crucial question before the court is whether the "covered loss" referred to in the above statute can only be determined, as argued by defendant, by reading the statute in pari materia with N.J.S.A. 39:6A-13(b). This court believes that the fundamental purpose of the No Fault Act was to insure the prompt payment of medical bills without regard to fault. A ruling by this court that the receipt of medical reports is a condition precedent to the payment of medical bills pursuant to N.J.S.A. 39:6A-5(b) would only frustrate the previously stated purposes of this act by causing unnecessary delays and perhaps even litigation in the preparation, processing and interpretation of the said reports.

An excellent example of this rationale of construing the various sections of the No Fault Law in a manner which is in keeping with the spirit of the entire act can be found in Maros v. Transamerica Ins. Co., supra. There the court held that it was...