Haines v. Taft

• Decision Date: 26 March 2019
• Docket Number: A-14 September Term 2017,A-13 September Term 2017,079600
• Parties: Joshua HAINES, Plaintiff-Respondent, v. Jacob W. TAFT, Bonnie L. Taft, Jointly, Severally and/or in the Alternative, Defendants-Appellants, and John McHenry, Defendant. Tuwona Little, Plaintiff-Respondent, v. Jayne Nishimura, Defendant-Appellant.
• Court: New Jersey Supreme Court

237 N.J. 271

204 A.3d 263

Joshua HAINES, Plaintiff-Respondent,

v.Jacob W. TAFT, Bonnie L. Taft, Jointly, Severally and/or in the Alternative, Defendants-Appellants,andJohn McHenry, Defendant.

Tuwona Little, Plaintiff-Respondent,

v.Jayne Nishimura, Defendant-Appellant.

A-13 September Term 2017

A-14 September Term 2017

079600

Supreme Court of New Jersey.

Argued October 22, 2018

Decided March 26, 2019

Michael J. Marone, Morristown, argued the cause for appellants Jacob W. Taft, Bonnie L. Taft, and Jayne Nishimura (McElroy, Deutsch, Mulvaney & Carpenter, attorneys; Michael J. Marone, of counsel and on the briefs, and Eric G. Siegel, Morristown, on the briefs).

Vincent A. Campo, Woodbury, argued the cause for respondent Joshua Haines (Malamut & Associates, attorneys; Vincent A. Campo, on the brief).

Jeffrey M. Thiel, Pennsauken, argued the cause for respondent Tuwona Little (Petrillo & Goldberg, attorneys; Jeffrey M. Thiel, on the brief).

Susan Stryker, Florham Park, argued the cause for amici curiae Insurance Council of New Jersey and The Property Casualty Insurers Association of America (Bressler, Amery & Ross, attorneys; Susan Stryker, of counsel and on the brief).

Stephen J. Foley, Jr., Asbury Park, argued the cause for amicus curiae New Jersey Defense Association (Campbell, Foley, Delano & Adams, attorneys; Stephen J. Foley, Jr., on the brief).

Kenneth G. Andres, Jr., Haddonfield, argued the cause for amicus curiae New Jersey Association for Justice (Andres & Berger, attorneys; Kenneth G. Andres, Jr., of counsel and on the brief, and Tommie Ann Gibney, Haddonfield, on the brief).

JUSTICE LaVECCHIA delivered the opinion of the Court.

In this consolidated appeal, we consider one question of law: Did the Legislature intend to deviate from its highly regulated no-fault system of first-party self-insurance to cover medical expenses arising from automobile accidents when it amended the statutory scheme to allow an insured to elect smaller amounts of personal injury protection (PIP) under a standard policy?

Each plaintiff in this appeal was injured in a car accident. Each was insured under a standard policy with insurance that provided for $ 15,000 in PIP coverage instead of the default amount of $ 250,000. Neither plaintiff was able to sustain a claim for bodily injury (noneconomic loss) due to each policy's limitation-on-lawsuit option. Each was suing for outstanding medical provider charges in excess of their elected PIP coverage ($ 28,000 and $ 10,000, respectively). The trial court record reveals that the outstanding provider charges had not been subjected to the cost containment requirements under the PIP regulatory scheme.

The Appellate Division concluded that plaintiffs could introduce evidence of their outstanding medical bills in excess of the elected PIP policy coverage in support of fault-based claims for economic damages against their respective tortfeasors.

For the reasons that follow, we reverse. We cannot conclude that there is evidence of a clear intention on the part of the Legislature to deviate from the carefully constructed no-fault first-party PIP system of regulated coverage of contained medical expenses and return to fault-based suits consisting solely of economic damages claims for medical expenses in excess of an elected lesser amount of available PIP coverage. Unless the Legislature makes such an intent clearly known, we will not assume that such a change was intended by the Legislature through its amendments to the no-fault system in the Automobile Insurance Cost Reduction Act (AICRA).

Indeed, in the opening findings and declarations section of AICRA, it was the Legislature's belief that "it is good public policy to provide medical benefits on a first party basis, without regard to fault, to persons injured in automobile accidents," but "in order to keep premium costs down, the cost of the benefit must be offset by a reduction in the cost of other coverages, most notably a restriction on the right of persons who have non-permanent or non-serious injuries to sue for pain and suffering." N.J.S.A. 39:6A-1.1(b) (1998). Upon consideration of the coordinated amendments accomplished through AICRA to tighten up medical utilization, contain insurance costs, and make first-party no-fault insurance coverage more affordable and available, we find the Appellate Division's conclusion counter-intuitive and look for greater guidance from the Legislative Branch.

I.

On October 19, 2011, plaintiff Joshua Haines was in an automobile accident. While driving his father's car, he was struck by a car driven by defendant Jacob W. Taft.¹ Not having any health insurance, Haines sought coverage for medical treatment for his injuries under the PIP plan in his father's standard automobile insurance policy. The PIP plan provided for $ 15,000 of coverage -- the minimum amount permitted under N.J.S.A. 39:6A-4.3(e). Haines exhausted the PIP coverage. He claims to have approximately $ 28,000 in outstanding medical claims that providers are seeking from him. The record before the motion court reveals that Haines' counsel represented that the majority of the $ 28,000 in costs were not subjected to applicable PIP fee schedules but rather are based on the full amount billed by the providers.

On September 13, 2016, the motor vehicle driven by plaintiff Tuwona Little was rear-ended by defendant Jayne Nishimura's vehicle. Little also was insured under a standard insurance policy that provided $ 15,000 in PIP coverage. She sought treatment for the personal injuries she sustained in the accident. Like Haines, Little eventually exhausted her PIP coverage. She claims that she has $ 10,488 in unpaid medical expenses. Similar to the record in Haines, the record considered by the motion court indicated that the individual medical expenses had not been subjected to any detailed review to determine if they were "reasonable and necessary," and the court did not deem it essential to resolve that factual matter before proceeding with the legal question before it.

Each plaintiff filed a personal injury claim against the respective defendant-driver and requested a jury trial. Each defendant filed a pre-trial motion to preclude plaintiff from presenting evidence of medical expenses that exceeded the $ 15,000 PIP limits. Defendants relied on N.J.S.A. 39:6A-12 (Section 12), which addresses the inadmissibility of evidence of losses collectible under personal injury protection, and Roig v. Kelsey, 135 N.J. 500, 641 A.2d 248 (1994). In Roig, our Court reasoned that the public policies underlying the no-fault system required that we construe Section 12 to prohibit injured parties from recovering medical deductibles and copayments from a tortfeasor. 135 N.J. at 513, 515, 641 A.2d 248.

In opposition to the motion, Haines maintained that medical bills exceeding PIP coverage constitute "economic loss" as that term presently is defined in N.J.S.A. 39:6A-2(k) and that evidence of such medical bills should thus be admissible at trial. Similarly, Little distinguished the present case, stating that, in amending the definition of economic loss to include a reference to "medical expenses" after the Roig decision, the Legislature "clearly evinced its intention to allow recovery [in tort] for medical expenses."

The trial courts ruled against plaintiffs in each matter and prohibited plaintiffs from admitting evidence of their medical expenses that exceeded their $ 15,000 PIP limits. In Little's case, the trial court reasoned that "under the AICRA, the Legislature did not intend to have ancillary litigation or to have litigation over medical bills not covered by the PIP limits that [Little] selected." In Haines's case, the trial court reasoned that a person who chooses a $ 15,000 PIP plan should not be allowed to recover in excess of that amount because he or she has made an affirmative decision to buy less insurance for less money. The court concluded that the purpose of the no-fault system is to keep premiums lower by allowing insureds to buy smaller policies, and a necessary component of that goal, as discussed in Roig, is eliminating litigation over claims for medical expenses exceeding an insured's PIP limit.

The Appellate Division consolidated the cases on appeal, and, in a published opinion, reversed both trial court orders. Haines v. Taft, 450 N.J. Super. 295, 309-10, 162 A.3d 296 (App. Div. 2017).

The panel found persuasive plaintiffs' argument in favor of a plain-language approach to N.J.S.A. 39:6A-12 and also agreed that allowing recovery of uncompensated medical expenses is not contrary to the statute's principal goal of avoiding double recovery of medical expenses by plaintiffs. Id. at 302, 307, 162 A.3d 296.

Examining N.J.S.A. 39:6A-12 and the statutory provisions referred to therein, the Appellate Division concluded that "amounts collectible or paid under a standard automobile insurance policy" did not "refer[ ] solely to the maximum PIP coverage, or $ 250,000, that is potentially available in a standard policy." Id. at 302, 162 A.3d 296. The panel reasoned that "because the statutory language expressly allows varying levels of PIP benefits paid or collectible under a standard policy," ibid. (citing N.J.S.A. 39:6A-4.3(e) ), Haines and Little were barred from admitting evidence of medical expenses up to their $ 15,000 PIP policy limit. The panel concluded, however, that evidence of their medical expenses between$ 15,000 and $ 250,000 was not barred by Section 12 and therefore was "admissible and recoverable against the tortfeasors." Id. at 303, 162 A.3d 296.

The panel declined to accept defendants' position that the policies underlying AICRA necessitated the exclusion of recovery for medical expenses between $ 15,000 and $ 250,000. Id. at 306-07, 162 A.3d 296. Similarly, the panel was unpersuaded that allowing admission of medical expenses above an insured's PIP policy limit, but below the $ 250,000 PIP limit, would insert a fault-based aspect into a no-fault system even...