Johnson v. Roselle EZ Quick LLC
| Decision Date | 27 July 2016 |
| Parties | Karon K. JOHNSON, Plaintiff–Appellant, v. ROSELLE EZ QUICK LLC, L & J Liquor & Deli, Harshira Patel, Suresh Patel, Gregory Parisi, Intrepid Investigations, Defendants, and Geico Insurance Company, Defendant–Respondent, and Geico Insurance Company, Third–Party Plaintiff, v. One Beacon Insurance and The Camden Fire Insurance Association, Third–Party Defendants. |
| Court | New Jersey Supreme Court |
James C. Mescall, West Orange, argued the cause for appellant (Mescall & Acosta, attorneys).
Curtis J. Turpan argued the cause for respondent (Harwood Lloyd, attorneys; Mr. Turpan and Paul E. Kiel, Hackensack, on the brief).
(temporarily assigned) delivered the opinion of the Court.
In this appeal, we consider whether a 2011 amendment to N.J.S.A. 39:6A–9.1
should be applied retroactively. The amendment provides that a personal injury protection (PIP) insurance provider may be reimbursed for payments made to an injured insured party by the tortfeasor's insurer only after the injured party's claim is fully satisfied. The parties entered into a policy agreement, plaintiff drove while intoxicated and was injured in an automobile accident, and plaintiff filed a claim for PIP benefits prior to the enactment of the 2011 amendment.
Plaintiff also filed a civil action alleging negligence by the store that sold him alcohol. When that litigation settled, and pursuant to the pre-amendment law, plaintiff's PIP provider sought priority reimbursement from the tortfeasor's insurer, even though doing so would prevent plaintiff from being fully compensated on the bodily injury claim. Plaintiff contends that this was improper because the legislative intent and purpose of the 2011 amendment, along with the expectations of the parties, justify retroactive application of the amendment to his case.
The trial court concluded that the amendment was not retroactive and therefore granted in part the PIP provider's motion for summary judgment.1 The Appellate Division affirmed over the dissent of one of its panel members. The dissenting judge concluded that the amendment was retroactive and, additionally, that the PIP provider's claim did not accrue until the tortfeasor's liability was established, after the 2011 amendment was enacted.
This appeal comes before us as of right, and we now affirm. In so doing, we conclude that plaintiff failed to rebut the presumption that the 2011 amendment to N.J.S.A. 39:6A–9.1
, as a newly enacted law, is prospective. Specifically, the language and legislative history of the amendment provide no indication that the Legislature intended retroactive application. There is also insufficient evidence that the amendment was merely “curative,” because it altered well-settled law and was not enacted in response to a misapplication of that law. Similarly, given the established law at the time the agreement was entered into and when the injury occurred, we cannot conclude that the expectations of the parties warrant retroactivity.
We are also unpersuaded that PIP providers' reimbursement claims do not accrue until such a claim is filed or the tortfeasor's liability is established—in this case, through settlement. Such a position departs from settled practice that a claim accrues when a party gains the right to institute a suit and the statute of limitations begins to run. In cases such as this, the claim accrues when the insured party files a claim for PIP benefits. Moreover, accepting either of plaintiff's proposals would tie the date of accrual to illogical, unpredictable, or statutorily disfavored events.
On December 16, 2009, plaintiff Karon K. Johnson was twenty years old. On that date, Johnson purchased a bottle of vodka from L & J Liquor & Deli, owned and operated by defendants Roselle EZ Quick, LLC, Harshira Patel, and Suresh Patel (collectively, EZ Quick). Johnson was not asked for identification when making his purchase. Several hours later, after consuming some of the vodka, Johnson was seriously injured when he drove his mother's car into a tree. Johnson's blood alcohol content was determined to have been 0.128% at the time of the crash. Johnson suffered serious injuries rendering him a paraplegic.
Johnson filed a claim for PIP benefits on August 8, 2010, through his mother's auto insurer, defendant GEICO Insurance Company (GEICO). By August 20, 2010, GEICO had paid the full PIP benefits policy limit of $250,000 to Johnson. Over five months later, on January 28, 2011, an amendment to N.J.S.A. 39:6A–9.1
was enacted preventing PIP carriers such as GEICO from being reimbursed from a tortfeasor's insurer for benefits the PIP carrier paid to an insured party until the insured party's claims against the tortfeasor are fully satisfied. L. 2011, c. 11, § 1.
On June 10, 2011, Johnson filed suit in the Law Division against EZ Quick for the negligent service of alcoholic beverages to a minor, and against GEICO for additional no-fault insurance benefits.2 GEICO filed its answer on December 20, 2011, in which it requested contribution and indemnification from EZ Quick. GEICO also sought PIP reimbursement from EZ Quick, pursuant to N.J.S.A. 39:6A–9.1
. On February 22, 2012, GEICO filed a third-party complaint seeking the same relief from EZ Quick's insurer, One Beacon Insurance and/or The Camden Fire Insurance Association (collectively, One Beacon).
On August 9, 2012, Johnson entered into a settlement agreement and release with EZ Quick and One Beacon. Under the agreement, EZ Quick agreed to pay Johnson $1,000,000, the limit of its policy with One Beacon. The $1,000,000 was to be divided as follows: $251,449.90 to Johnson's attorneys; $483,970.10 to Johnson's special-needs trust; and $264,580 to the court to be held until GEICO's claim for PIP reimbursement was resolved. The trial court approved the settlement and dismissed with prejudice Johnson's claims against EZ Quick on August 15, 2012.
.]
That section was not altered by the 2011 amendment. L. 2011, c. 11, § 1.
).]
The amendment, which was enacted on January 28, 2011, was to “take effect immediately.” L. 2011, c. 11, § 2. Although enacted more than a year after he was injured and over five months after he filed a claim for PIP benefits, Johnson contended that the amendment applied retroactively.
In a written decision, the trial court rejected Johnson's argument that the 2011 amendment to N.J.S.A. 39:6A–9.1
should be applied retroactively. The court found that the amendment's language indicated that it was to take effect “immediately,” that the available legislative history did not demonstrate a curative purpose, and that GEICO fairly expected the pre-amendment version of the law to apply. As a result, the trial court entered summary judgment in favor of GEICO. The trial court subsequently entered a final order stating that GEICO was entitled to withdraw $250,000, plus all accumulated interest, from the $264,580 held by the court. The balance was to go to Johnson.
Johnson appealed and GEICO cross-appealed. A divided Appellate Division affirmed in an unpublished opinion. The majority agreed that the language of the 2011 amendment stated that it was to take effect immediately and that the Legislature could have indicated otherwise had it so intended. The majority similarly found no retroactive intent in the legislative history and concluded that the amendment was not curative because it substantially altered the substance and intent of the statute. The majority also found that the parties' expectations did not warrant retroactive application because the pre-amendment law was in effect at the time of the crash and when Johnson claimed the PIP benefits.
Addressing an issue not raised before the trial court, the majority next held that the amendment applies when the injured party submits a PIP claim on or after the effective date of the amendment, January 28, 2011. The court reasoned that a prior decision established that an insurer's right to recover PIP payments arises when an injured party submits a PIP claim. As such, the majority rejected Johnson's argument that the...
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...§ 2. "Such language ‘bespeak[s] an intent contrary to, and not supportive of, retroactive application.’ " Johnson v. Roselle EZ Quick LLC, 226 N.J. 370, 389, 143 A.3d 254 (2016) (quoting Cruz, 195 N.J. at 48, 947 A.2d 1228 ).The State correctly points out that the Legislature made subsectio......