Liberty Mutual Insurance Company v. Penske Truck Leasing Co. explained by Jared Stolz, Esq
In a new article, Jared Stolz, Esq. explains the underlying issue, if the non-PIP insurer denies that their insured is a tortfeasor and denies fault, whether the resolution of that dispute should happen in court or in arbitration.
By: Stolz & Associates
"Section 9.1 of the New Jersey Automobile Reparation Reform Act (the No-Fault Act), N.J.S.A. 39:6A-1 to -35, provides insurers, which have paid personal injury protection (PIP) benefits to their insured, with the statutory right to seek reimbursement against certain tortfeasors. N.J.S.A. 39:6A-9.1. If the tortfeasor is insured, the determination whether the insurer that paid the PIP benefits is entitled to recover those payments and the amount of the recovery is by agreement of the parties, and, if they are unable to agree, by arbitration."
Here, the dispute centered around whether one had to be acknowledged as a tortfeasor before falling the under the arbitration requirements of the act. Put another way, if the non-PIP insurer denies that their insured is a tortfeasor and denies fault, whether the resolution of that dispute should happen in court or in arbitration.
The trial court sided with the non-PIP insurer, ruling that the issue of fault (whether the insured was a tortfeasor to begin with) had to be resolved in court. Only once the issue of fault is resolved in favor of the PIP insurer, can the proceeding move to arbitration under the statute.
Appellate division reversed, agreeing with Liberty Mutual that the issue of fault must be arbitrated as well. Noting that the issue was one of statutory interpretation, the Court examined the arbitration provision in the code. The key phrase the Court examined was the following: "'the determination as to whether an insurer . . . is legally entitled to recover the amount of payments and the amount of the recovery' shall be by agreement, or, 'upon failing to agree, by arbitration.'"
*** Jared Elliott Stolz is an attorney in New Jersey, focusing on insurance law and litigation. He is the managing partner of Stolz and Associates.
Bio on law firm website: http://www.stolzlaw.com/
Stolz & Associates
Jared Elliott Stolz, Esq.