Karen K. Johnson v. Roselle Ez Quick, Llc(075044)
226 N.J. 370
| N.J. | 2016Background
- On Dec. 16, 2009 Karon Johnson (a minor) purchased alcohol, later drove intoxicated, and suffered catastrophic injuries; his mother’s insurer GEICO paid $250,000 in PIP benefits by Aug. 20, 2010.
- The Legislature amended N.J.S.A. 39:6A-9.1 on Jan. 28, 2011 to provide that any insurer recovery is subject to the injured party’s claim and must be paid only after that claim is satisfied (i.e., the insured must be made whole); the amendment "take[s] effect immediately."
- Johnson sued the dram‑shop defendants on June 10, 2011; GEICO sought reimbursement from the tortfeasor’s insurer and filed a third‑party complaint Feb. 22, 2012.
- The parties settled on Aug. 9, 2012 for $1,000,000; $264,580 was held by the court pending resolution of GEICO’s reimbursement claim.
- Trial court and Appellate Division (majority) held the 2011 amendment is prospective only and GEICO’s reimbursement right accrued when Johnson filed his PIP claim (Aug. 8, 2010); Supreme Court affirms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2011 amendment to N.J.S.A. 39:6A-9.1 applies retroactively | Johnson: sponsor statements and legislative history show retroactive intent / statute is curative / parties expected the amendment to govern pending claims | GEICO: no express or implicit retroactive intent; amendment changed settled law and is not curative; parties reasonably relied on pre‑amendment law | Not retroactive. Presumption of prospective application not rebutted; amendment altered settled law and lacks unequivocal retroactive intent |
| Whether the amendment is "curative" (i.e., merely clarifies prior law) | Johnson: amendment corrects judicial misinterpretation (Fernandez) and therefore is curative | GEICO: amendment changes substantive policy and reverses settled statutory order, so it is not curative | Not curative. The amendment changed the substantive reimbursement priority and reflects new policy, not clarification |
| Whether parties’ expectations warrant retroactivity | Johnson: insured expected to keep PIP benefits; GEICO could not claim surprise; sponsors said amendment responds to Fernandez | GEICO: pre‑amendment law was settled when policy issued, injury occurred, and PIP claim filed; insurer reasonably relied on established reimbursement priority | Expectations do not warrant retroactivity; parties reasonably relied on pre‑amendment law |
| When GEICO’s reimbursement claim accrued for prospective application purposes | Johnson: claim did not accrue until GEICO filed third‑party complaint (2012) or until tortfeasor liability established by settlement (Aug. 2012) | GEICO: accrual occurs when injured party files PIP claim; statute sets two‑year window from filing of the claim | Accrual occurred when Johnson filed the PIP claim (Aug. 8, 2010); GEICO’s right existed before the 2011 amendment took effect |
Key Cases Cited
- Fernandez v. Nationwide Mut. Fire Ins. Co., 402 N.J. Super. 166 (App. Div. 2008) (PIP carrier entitled to reimbursement even if tortfeasor limits leave insured short)
- Fernandez v. Nationwide Mut. Fire Ins. Co., 199 N.J. 591 (N.J. 2009) (Supreme Court affirmed appellate holding by an evenly divided court)
- State Farm Mut. Auto. Ins. Co. v. Licensed Beverage Ins. Exch., 146 N.J. 1 (N.J. 1996) (No‑Fault Act history and legislative response to subrogation issues)
- Aetna Ins. Co. v. Gilchrist Bros., 85 N.J. 550 (N.J. 1981) (interpretation of No‑Fault Act effect on insureds’ PIP actions)
- James v. N.J. Mfrs. Ins. Co., 216 N.J. 552 (N.J. 2014) (new statutes are presumptively prospective; "take effect immediately" language does not itself establish retroactivity)