Solimano v. Consolidated Mut. Ins. Co.

• Decision Date: 13 January 1977
• Citation: Solimano v. Consolidated Mut. Ins. Co., 369 A.2d 1003, 146 N.J.Super. 393 (N.J. Super. 1977)
• Parties: Marlene SOLIMANO, Plaintiff, v. CONSOLIDATED MUTUAL INSURANCE COMPANY, Defendant.
• Court: New Jersey Superior Court

Page 393

146 N.J.Super. 393

369 A.2d 1003

Marlene SOLIMANO, Plaintiff, v. CONSOLIDATED MUTUAL INSURANCE COMPANY, Defendant.

Superior Court of New Jersey Law Division.

Jan. 13, 1977.

Breslin & Schepisi, Englewood Cliffs, for plaintiff (Edward F. Breslin, Englewood Cliffs, of counsel).

Feinberg, Feinberg & Tritsch, Rahway, for defendant (Bruce A. Tritsch, Rahway, of counsel).

MORRISON, J.C.C., Temporarily Assigned.

Plaintiff's verified complaint annexed to the order to show cause establishes (solely for the purposes of this motion) that on November 21, 1975 plaintiff, while operating her motor vehicle in returning home from work, was involved in an accident with another vehicle. The automobile she was driving had, at that time, the mandatory PIP coverage under a policy written by defendant Consolidated Mutual Insurance Company. Plaintiff gave notice of the accident to defendant and made claim for personal injury benefits under the policy provisions, in accordance with N.J.S.A. 39:6A--4.

Soon thereafter Consolidated Mutual began to make payments to plaintiff for her loss of wages and her ongoing medical expenses. These payments continued until July 15, 1976 when, by letter of that date, Consolidated Mutual informed plaintiff that no further payments would be made. Accordingly, Consolidated Mutual ceased paying PIP benefits.

Underlying Consolidated Mutual's decision to terminate benefits was its interpretation of N.J.S.A. 39:6A--6. It contended (and it has maintained this position throughout) that the provisions of the statute regarding credits to the insurer for benefits Collectible under workmen's compensation obviated its obligation to pay PIP benefits. Consolidated Mutual made a unilateral determination that plaintiff's injuries were compensable under workmen's compensation. As a result of this 'determination' it asserted that plaintiff must seek workmen's compensation benefits since its contractual obligation to pay PIP benefits is suspended pending the outcome of any Compensation claim.

In this action plaintiff seeks an order (1) compelling Consolidated Mutual to reimburse her for medical expenses incurred since July 15, 1976, and (2) requiring defendant to pay income continuation benefits and future medical benefits as they accrue.

The problem in this situation arise as a result of the inherent condition precedent to a determination of collectibility I.e., in order to be 'collectible,' as that term is used in the statute (and under the facts presented herein), the injury must be declared 'compensable' by the Division of Workers' Compensation. N.J.S.A. 34:15--1 Et seq. Without some clarification, this court foresees a recurrence of thgis dilemma in every case in which there is some nexus, however slight, between the injury and employment. ¹

This case hinges upon an interpretation of a deceptively perplexing statutory provision, N.J.S.A. 39:6A--6, entitled 'Collateral source.' It states:

The benefits provided in section 4a., b., c., d., and e. and section 10, shall be payable as loss accrues, upon written notice of such loss and without regard to collateral sources, except that benefits collectible under workmen's compensation insurance, employees temporary disability benefit statutes and medicare provided under Federal law, shall be deducted from the benefits collectible under section 4a., b., c., d. and e. and section 10.

The provision reads easily up to the word 'except'; however, at that point the quagmire begins. The statute poses two obvious, yet unanswered, questions: (1) who is to determine 'collectible benefits,' and (2) in the interim between injury and the determination of collectibility, what is the obligation of the PIP carrier?

If we take defendant's reading, a PIP claimant must dispose of the Possibility of collecting from another source (when that issue is raised by the carrier) via a claim in workmen's compensation before she may look to the PIP carrier for policy benefits. This would leave the issue of collectibility squarely in the insured's lap while the insurer sits back--awaiting the outcome of the compensation claim--with its contractual payments in abeyance.

Clearly, an adoption of the PIP carrier's position would fly in the face of the policy behind the No Fault Act. From its inception the public policy surrounding the legislation has been 'to provide appreciable reparation for all New Jersey accident victims promptly, fairly, and efficiently.' See State of New Jersey Automobile Insurance Study Commission Report to the Governor and Legislature, Reparation Reform for New Jersey Motorists, xii (1971). This policy was implemented by the Legislature in N.J.S.A. 39:6A--16, which provides that the No Fault Act 'shall be liberally construed so as to effect the purpose thereof.'

In interpreting that section this court has stated:

It is apparent that the purpose of the act is to provide for prompt payment of medical bills, lost wages and property damage without having to await the outcome of protracted litigation. (Harris v. Osorio, 125 N.J.Super. 468, 469, 311 A.2d 748, 749 (Law Div.1973)).

To the above quotation from our opinion in Harris we now add the words 'or an involved claim in workmen's compensation.' Simply stated, the No Fault Act was designed to get the bills paid and keep the injured insured, and those who must rely upon him or her for support, off the public assistance rolls. An implementation of Consolidated Mutual's position would require a judicial mandate to the least capable party (I.e., the injured, oftentimes debilitated, insured) to exhaust all possibilities for recovery before turning to his primary source of reimbursement--the PIP carrier. This position is contrary to the letter and spirit of the No Fault Act and the recent decisions of our courts interpreting it. We therefore reject it.

However, this does not resolve the entire dilemma. The statute goes on to provide a deduction for benefits collectible from any of the three enumerated sources. We read this provision as providing a statutory Right to a deduction that belongs to the PIP carrier. This deduction was established to partially offset the insurer's burden in its role as the primary source of recovery.

We feel that this is the only logical interpretation that can be gleaned from the wording of the statute. If the Legislature intended otherwise, it would have provided some mechanism for the Remittance of, or Subrogation rights to, benefits received from these collateral sources. No mention of remittance or subrogation exists in N.J.S.A. 39:6A--6.

Furthermore, any alternative reading would require a PIP carrier to await the disposition of the compensation or disability claim before asserting any claim for reimbursement. This proposition fails to give due accord to the statutory language and, more importantly, fails to confront the practical realities surrounding an accident involving PIP coverage. In the first instance, the claimant (as previously noted) is often physically unable to immediately pursue the claim due to the gravity of the injuries suffered. Secondly, a person who is being reimbursed by a PIP carrier does not have the motivation to pursue the claim since he knows that any dollars recovered for medical expenses and employment disability (up to the $100 a week maximum) will go to the PIP carrier and not himself. We take judicial notice of human nature and the general lack of combativeness by people who are not financially involved in a dispute. Our system recognizes this and has accommodated it by the device of the 'real party in interest' in lawsuits. If we require the PIP carrier to await action by the insured, we leave the PIP carrier in a state of limbo (I.e., having paid benefits immediately, he must now await a determination that, in all probability, will never come since the...