On March 26, 2019, in a 3-2 decision, the New Jersey Supreme Court reversed the Appellate Division’s ruling in Haines v. Taft and Little v. Nishimura, which was previously reported by GRSLBG&B, holding that a motorist who elects PIP limits of less than $250,000.00, has no right to recover medical expenses exceeding the amount elected. This ruling will have a significant impact of automobile accident claims involving medical expenses in excess of limited PIP policy limits as Plaintiffs will no longer be allowed to recover as damages expenses incurred between the reduced PIP limit and $250,000.00.
In both cases, Plaintiffs, Haines and Little, had elected personal injury protection (“PIP”) policies with $15,000.00 of coverage. Each Plaintiff’s medical bills resulting from their respective automobile accident exceeded the $15,000.00 coverage limit. Neither Plaintiff could maintain a lawsuit for personal injuries as they had elected the limitation-on-lawsuit options and could not satisfy the threshold. The Plaintiffs each filed suit to recover unpaid medical expenses in excess of the $15,000.00 coverage. Plaintiff, Haines, alleged approximately $28,000.00 in outstanding medical expenses, and Plaintiff, Little, alleged $10,488.00 in outstanding medical expenses. The Defendants in each matter filed motions to preclude evidence of the outstanding medical expenses.
The Trial Court, in both cases, barred Plaintiffs from admitting evidence of medical expenses that exceeded the $15,000.00 PIP limits. The Appellate Division reversed, finding that the plaintiffs were entitled to admit evidence of and recover for their unpaid medical expenses between the $15,000.00 PIP limit elected and the $250,000.00 ceiling. The Supreme Court granted the Defendants’ petition for certification and reversed.
At issue was the interpretation of N.J.S.A. 39:6A-12, and whether “the Legislature clearly intended Section 12 to allow fault-based suits consisting solely of economic damages claims for medical expenses in excess of an elected lesser amount of available PIP coverage.” In reaching its holding, the Supreme Court stated that the plain language of Section 12 (N.J.S.A. 39:6A-12), was ambiguous and capable of more than one interpretation. As such, the Supreme Court undertook an extensive review of the Legislative history and intent behind the New Jersey Automobile Reparation Reform Act, and the amendments thereto, including the Automobile Insurance Cost Reduction Act (“AICRA”).
The Plaintiffs argued that the third paragraph of N.J.S.A. 39:6A-12, which provides that “[n]othing in this section shall be construed to limit the right of recovery, against the tortfeasor, of uncompensated economic loss sustained by the injured party,” when read with the definition economic loss in N.J.S.A 39:6A-2(k), permits a cause of action for medical expenses exceeding their elected PIP coverage limits. In response, the Defendants and supporting amici argued that such an interpretation would permit essentially create a fault-based system by “reliev[ing] insureds of the intended consequences of minimizing coverage in exchange for less money,” and would result in a higher volume of litigation. The parties further disagreed on the meaning of the undefined phrase, “amounts collectible,” which plaintiffs interpreted to mean the policy limit, and defendants contend means the $250,000.00 limit available to every consumer.
The Supreme Court found that the overall goals of the No-Fault Law were to reduce court congestion and reduce the cost of automobile insurance, and to permit “fault-based suits consisting solely of economic damages claims for medical expenses in excess of an elected lesser amount of available PIP coverage,” would lose sight of those goals. The Supreme Court was similarly unpersuaded that the amendment of the definition of “economic damages” to include uncompensated medical expenses, created under the third paragraph of N.J.S.A. 39:6A-12, “a right to bring a new cause of action where before one could not.” The Court stated that such interpretation could theoretically allow a driver who elects a lower PIP coverage amount to receive a higher overall reimbursement than a drive who elects $250,000.00 in coverage.
The dissent claims that the majority’s ruling will have a catastrophic impact on low-income individuals that are injured in motor vehicle accidents. As interpreted by the dissent, N.J.S.A. 39:6A-12 was intended to bar double recovery, and that a plain reading of the statutory language permits suits for recovery of unpaid medical expenses above the elected reduced PIP coverage limit. The dissent urges that none of the amendments to the No-Fault Act suggest that in exchange for purchasing policies with PIP coverage of less than $250,000.00, low-income individuals sacrificed their right to sue for medical expenses above their elected PIP limit.
upon this holding, medical expenses in excess of a motorist’s elected reduced
PIP coverage limits, up through the $250,000.00 coverage ceiling, are not
recoverable from a tortfeasor. Although the Court’s opinion is based upon
factual circumstances in which a plaintiff was unable to sustain a claim for
non-economic loss, it is arguable that all plaintiffs, regardless of their
ability to sustain a non-economic loss claim, will be barred from recovering
any unpaid medical expenses below $250,000.00.
The impact of this decision cannot be
understated. It is anticipated that
automobile personal injury claims involving limited PIP policy limits will be
more difficult to resolve as a plaintiff will still be required to pay back the
outstanding medical expenses owed and now cannot seek to recover those amounts
from the defendants. As a result, it is
anticipated that the plaintiff will seek to recover maximum value for his or
her alleged pain and suffering. Accordingly,
the defense must continue to actively contest the nature, severity, and
proximate causation of a plaintiff’s alleged injuries. One thing is for certain, although the New
Jersey Supreme Court has issued this ruling, both the majority and the dissent
put the onus on “the Legislature to make its intention to introduce fault-based
suits into the no-fault medical reimbursement scheme more explicit,” should it
disagree with the Court’s current interpretation. Stay tuned, as this issue appears to be far from
 Jeffrey S. Bell, Esq. is a Shareholder in GRSLBG&B’s Litigation Department. He defends a wide variety of clients in various civil actions brought forth in New Jersey State and Federal Courts. Jeff can be reached at email@example.com.
 Carolynn A. Mulder, Esq. is an Associate in GRSLBG&B’s Litigation Department. She defends a wide variety of clients in various civil actions brought forth in New Jersey and New York State and Federal Courts. Carolynn can be reached at firstname.lastname@example.org