New Jersey Insurance law attorney Jared E. Stolz comments on Haines v. Taft

A recent case of the New Jersey Supreme Court reviews the legislative intent behind the New Jersey no-fault car insurance scheme. Insurance lawyer Jared Elliott Stolz explains in a new article.
Jared Stolz, attorney in New Jersey
Jared Stolz, attorney in New Jersey
FLEMINGTON, N.J. - May 15, 2019 - PRLog -- The New Jersey Supreme Court reviewed issues related to uncompensated medical expenses in a case where the limitation-on-lawsuit policy option prevented a claim for bodily injury. Insurance law attorney Jared Stolz reviewed the case in a published comment, available on his blog at

The New Jersey Supreme Court addressed the following question of law in Haines v. Taft: "Did the Legislature intend to deviate from its highly regulated no-fault system of first-party self-insurance to cover medical expenses arising from automobile accidents when it amended the statutory scheme to allow an insured to elect smaller amounts of personal injury protection (PIP) under a standard policy?"

"Each plaintiff in this appeal was injured in a car accident. Each was insured under a standard policy with insurance that provided for $15,000 in PIP coverage instead of the default amount of $250,000. Neither plaintiff was able to sustain a claim for bodily injury (noneconomic loss) due to each policy's limitation-on-lawsuit option. Each was suing for outstanding medical provider charges in excess of their elected PIP coverage ($28,000 and $10,000, respectively)."

Appellate court held "that plaintiffs could introduce evidence of their outstanding medical bills in excess of the elected PIP policy coverage in support of fault-based claims for economic damages against their respective tortfeasors."  New Jersey Supreme Court, however, overturned the appellate holding.

Plaintiffs argued that plain reading of the statute clearly allowed evidence of outstanding medical bills.  N.J.S.A. 39:6A-12 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."  Then N.J.S.A. 39:6A-2(k) defines "economic loss" as "uncompensated loss of income or property, or other uncompensated expenses, including, but not limited to, medical expenses."

The Court, however, did not agree that the statutory interpretation was so clear cut.  "At the outset, one must recognize that Section 12 addresses evidence that is admissible or not in a claim for bodily injury. The first paragraph sets that stage for the section. And, as is universally understood, authorization to bring claims for bodily injury under our regulated system of motor vehicle insurance law is heavily circumscribed. Indeed, in this matter, both plaintiffs had the limitation-on-lawsuit option controlling their ability to bring a claim for bodily injury and neither could exceed the necessary threshold. So, we are considering this issue in the context of a stand-alone claim to be able to sue for only uncompensated medical expenses in a case where the limitation-on-lawsuit policy option prevented a claim for bodily injury."

The Court concluded that there is an ambiguity in the statute with respect to this issue and turned to legislative intent behind the New Jersey's no-fault car insurance scheme.  After an in-depth discussion of the history of the no-fault system in New Jersey, the Court noted that the most recent amendment sought "to preserve the no-fault system, while at the same time reducing unnecessary costs which drive premiums higher."  The higher premium was attributed "to medical benefits, which were 'overutilized for the purpose of gaining standing to sue for pain and suffering.'"  The Court also noted that the statute "take[s] care to ensure that the decision to carry less-than-full PIP coverage is an informed and conscious one."  Thus, the Court concluded that "based on the strong evidence of a legislative effort to avoid fault-based suits in the realm of medical expenses in the No-Fault Law, we cannot conclude that 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."

Therefore, the Court concluded that the evidence should have been excluded and reversed the decision of the Appellate Division. The case is Haines v. Taft, (A-13/14-17) (079600).

*** Jared Elliott Stolz is an attorney in New Jersey, focusing on insurance law and litigation. He is the managing partner of Stolz and Associates.

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