COVID-19 Resource Center

June 04, 2019

NJ PIP Reimbursement Disputes: To Arbitrate or Litigate?

The New Jersey Appellate Division recently handed down a published decision regarding NJ PIP subro claims against self-insured commercial auto tortfeasors.  (The decision will also apply to PIP reimbursement claims against insured commercial vehicle tortfeasors.)  Liberty Mutual v. Penske and CEVA Freight, __ N.J. Super __ (App.Div. 2019) (Decided May 23, 2019, DOCKET NO. A-5624-17T3).

Here, the self-insured TF, CEVA denied liability for the accident and wanted the PIP reimbursement claim litigated in state court.  The trial court agreed (for some reason).  The injured insured's PIP carrier, Liberty, who was seeking PIP reimbursement pursuant to N.J.S.A. 39:6A-9.1, wanted the case litigated in intercompany arbitration.  The Appellate Division reversed the trial court and agreed with Liberty that these PIP reimbursement disputes should be arbitrated, including when liability for the accident is contested in the first instance.  The court held that the issue of liability is a factual one, fit for intercompany arbitration, pursuant to the statute.

On a related note, N.J.S.A. 39:6A-9.1 also dictates that when adjusting a commercial auto claim and the plaintiff/BI claimant's PIP carrier is seeking reimbursement in intercompany arbitration, the matter should be deferred pursuant to the statute's explicit language:  Any recovery by an insurer, health maintenance organization or governmental agency pursuant to this subsection shall be subject to any claim against the insured tortfeasor's insurer by the injured party and shall be paid only after satisfaction of that claim, up to the limits of the insured tortfeasor's motor vehicle or other liability insurance policy.

If there are any remaining policy limits after any and all BI claims are satisfied, then the PIP reimbursement claims may proceed to arbitration.

For your easy reference, click here to access the Arbitration Forum's website pertaining to NJ's PIP reimbursement statute.

Rule 2-10 of the Arbitration Forum's Rules applies to deferment requests by a Respondent:

  • Each party may request a one-year deferment and must provide the basis for the request in the Deferment Justification section.  There will be no fee for an initial deferment request.
  • Deferment requests by the filing company will be automatically granted.  A responding company may challenge the request if it believes the delay is not warranted.  If challenged, the case will be heard and the arbitrator(s) will consider the validity of the request.  If the request is upheld, the case will be deferred for one year from the date of filing.  If the request is denied, the arbitrator will continue to hear the disputed issues.
  • Deferment requests by a responding company will be automatically challenged and the same process as outlined above will be followed.  (Effective October 1, 2019:  For TRS filings, deferment requests by a responding company will be automatically granted.  An adverse party may challenge the request if it believes the delay is not warranted.  If a deferment request is challenged, the deferment will be ruled on by an arbitrator.  If the deferment is allowed, the case will remain deferred for one year from the deferment request date.  If the deferment is not allowed, the case will continue as not deferred.) (emphasis in original webpage)