On December 13, 2010, the New Jersey Assembly voted 75-0 to pass legislation giving claimants priority over PIP insurers seeking reimbursement of PIP benefits against the offender’s insurance policy ( the Senate passed its version of this bill 37-0 on October 18, 2010). This bill was proposed to reverse the decision of the New Jersey Supreme Court inFernandez v. Nationwide Mutual First Insurance Company, 199 NJ 591 (2009)which concluded that an injured claimant does not have priority over the insurance proceeds of an injurer when an insurer seeks reimbursement for PIP benefits it had paid to that claimant.
Tea Fernandez The matter involved a truck trailer that struck Mr. Fernández, causing him significant injuries. Fernandez received $250,000 in PIP benefits under his auto policy issued by Nationwide. In April 2004, Fernández sued the trucking company, which was insured by Properformance Insurance Company. In July 2004, Nationwide filed a subrogation claim through arbitration against Proformance seeking repayment of the $250,000 in PIP benefits paid to Fernandez. Subsequently, Fernández settled with Properformance for his personal injury for $1,000,000. However, Properformance paid Fernandez only $750,000 and deposited $250,000 in court pending the outcome of the PIP arbitration filed by Nationwide.
Fernández objected to Properformance depositing the $250,000 in court and filed an action seeking the release of those funds for him pursuant to his settlement agreement. The trial court found that Fernandez had priority over the Properformance policy and that Nationwide was only allowed to recover the amount that was still available under the Properformance policy (if any) after Fernandez’s recovery. The Appellate Division reversed the trial court’s decision and determined that Nationwide should receive funds for the PIP benefits paid even if Fernandez did not receive full agreement from him. Ultimately, the Supreme Court upheld the Appellate Division’s decision and determined that an injured person did not have priority over the offender’s insurance policy.
The bill approved by the Assembly and the Senate modifies the existing PIP statute regarding reimbursement to provide: Any recovery by an insurer, health maintenance organization or government agency… shall be subject to any claim against the insurer of the cause of the insured damage by the injured party and shall be paid only after satisfaction of that claim , up to the limits of the engine of the cause of the insured damage. vehicle or other liability policy.
The bill now goes to Governor Christie for his consideration.
