208 A.3d 888
N.J. Super. Ct. App. Div.2019Background
- Early-morning collision between a CEVA-owned, self-insured tractor-trailer (driver: Albert Kika) and a pickup driven by Eugene Jerinsky; police report and a witness implicated Kika in blocking and failing to yield the roadway.
- Jerinsky’s insurer, Liberty Mutual, paid PIP and property-damage benefits to Jerinsky and sought reimbursement from CEVA under N.J.S.A. 39:6A-9.1.
- CEVA (self-insured commercial carrier, not required to carry PIP) refused to reimburse and declined Liberty’s demand to arbitrate, asserting Kika was not a tortfeasor.
- Liberty filed suit and moved to compel arbitration under Section 9.1(b); the Law Division denied the motion, holding that tortfeasor status must first be adjudicated in court.
- Appellate court reviewed statutory interpretation de novo and considered whether disputes over an insured’s fault (tortfeasor status) fall within the arbitration framework of Section 9.1(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Section 9.1(b) requires arbitration of disputes over whether a non-PIP insurer’s insured was a "tortfeasor" | Liberty: Section 9.1(b)’s phrase "legally entitled to recover" includes disputes about tortfeasor/fault; arbitration is mandated when parties fail to agree | CEVA: Tortfeasor status is a threshold legal issue to be decided in court before Section 9.1(b) applies | Court: Arbitration covers factual disputes over whether the insured was a tortfeasor; compel arbitration |
| Whether the term "tortfeasor" in the statute creates a prerequisite judicial determination before arbitration | Liberty: No; the statute contemplates resolving entitlement (including liability) by agreement or arbitration | CEVA: "Tortfeasor" must be established in court first; arbitration limited to amount if liability established | Court: "Legally entitled to recover" includes liability; read in context arbitration was intended to resolve such disputes |
| Applicability of precedents declining arbitration for purely legal questions | Liberty: Precedents distinguish legal/statutory questions from factual liability disputes; Section 9.1 covers factual liability | CEVA: Cases like AAA Mid-Atlantic and Coach USA show courts should decide pure legal/statutory issues | Court: Those cases involved purely legal/statutory questions; here liability is factual and thus arbitrable |
| Whether compelling arbitration would undermine No-Fault Act’s goals | Liberty: Arbitration furthers Act’s goal to reduce litigation and efficiently resolve reimbursement claims | CEVA: Judicial determination prevents improper arbitration of threshold rights | Court: Arbitration advances the statutory purpose and avoids an unnecessary, protracted court step |
Key Cases Cited
- Aetna Ins. Co. v. Gilchrist Bros., Inc., 428 A.2d 1254 (1981) (Supreme Court recognized insurer subrogation issues after No-Fault subrogation clause became inoperative)
- Unsatisfied Claim & Judgment Fund Bd. v. N.J. Mfrs. Ins. Co., 649 A.2d 1243 (1994) (Section 9.1 creates a direct reimbursement right distinct from subrogation)
- State Farm Mut. Auto. Ins. Co. v. Licensed Beverage Ins. Exch., 679 A.2d 620 (1996) (interpreted "any tortfeasor" broadly to include tortfeasors outside No-Fault coverage)
- Empire Fire & Marine Ins. Co. v. GSA Ins. Co., 808 A.2d 98 (App. Div. 2002) (commercial vehicles not within statute’s definition of "automobile" and not required to maintain PIP)
- Haines v. Taft, 204 A.3d 263 (2019) (legislative purpose of No-Fault Act includes limiting litigation and containing costs)