New Jersey PIP Law Clarified
The insurer of a vehicle involved in a collision with a school bus filed an action against the bus driver, the religious school that employed him, and the bus insurer. The plaintiff sought reimbursement of personal injury protection (PIP) benefits it paid for medical expenses arising from the collision. This case is Drive New Jersey Insurance Company v. Gisis, 21 A.3d 216 (2011).
Masoras operates a religious school in New Jersey and Gisis drives a school bus for Masoras. Gisis was driving a bus and collided with a vehicle owned by Mendoza, causing personal injuries to the passengers in Mendoza 's car. Drive New Jersey provided PIP benefits under a personal auto policy covering Mendoza and it paid for the medical expenses incurred by the injured passengers.
Drive New Jersey then commenced this action seeking reimbursement of the PIP benefits it paid as a result of the alleged negligent operation of the school bus by Gisis. The insurer for the school denied liability and Drive New Jersey filed a motion to compel arbitration pursuant to New Jersey law. The trial court ruled in favor of the school bus insurer and this appeal followed.
On appeal, Drive New Jersey argued that, under the statute, because Masoras was not required to maintain PIP or medical expense benefits coverage for its school bus, it had a right to seek recovery of the PIP benefits it paid. The insurer for the school (Philadelphia Indemnity) argued that the statute should be read to bar recovery of PIP payments because, although Masoras was not required to maintain medical expense benefits coverage, it did so.
The Superior Court of New Jersey, Appellate Division, noted that the language of the statute was clear on its face. The law provides that an insurer paying PIP or medical expense benefits pursuant to certain statutes may recover those payments form any tortfeasor who was not, at the time of the accident, required to maintain personal injury protection or medical expense benefits coverage under the laws of New Jersey, or any tortfeasor who did not maintain such coverage, although required to do so.
It was undisputed that, at the time of the accident, the alleged tortfeasors, Masoras and Gisis, were not required to maintain PIP or medical expense benefits coverage. School buses are expressly excluded by the statute from the definition of a motor bus. Thus, according to the plain language of the law, Drive New Jersey has a right to seek recovery of its PIP payments from the defendants. The statute does not preclude Drive New Jersey from seeking reimbursement because, although Philadelphia Indemnity's policy provided medical expense benefits coverage for the school bus, the alleged tortfeasors were not required to maintain that coverage.
The ruling of the trial court was reversed.
Editor's Note: The New Jersey Appeals Court clarifies the intent of the PIP statute with its decision. It is a curious argument on the part of the school bus insurer that its policy was not applicable because the policy provided coverage it was not required to provide. Another curious stance on the part of Philadelphia Indemnity was that the New Jersey law was never intended to permit PIP carriers to pursue reimbursement of PIP payments from other PIP carriers. Wishful thinking or creative interpretation, perhaps. The statute plainly authorizes reimbursement and the court's opinion confirmed this.