NEW JERSEY PIP CARRIER SUBROGATION CLAIMS

On January 28, 2011, Gov. Chris Christie signed a bill mandating that when an accident victim and a PIP carrier vie for recovery from an at-fault party’s insurer, the victim must first be made whole. The measure, S-191, amends the Personal Injury Protection Subrogation Statute, N.J.S.A. 39:6A-9.1(b), to provide that recovery from a tortfeasor’s carrier by an insurer, health maintenance organization or governmental agency is “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.” The bill nullifies the State Supreme Court decision of Fernandez v. Nationwide Mutual Fire Ins. Co., 199 N.J. 591(2009). In Fernandez, the court held that giving priority to reimbursing the carrier “advances the stability in the insurance market place by requiring that the ultimate cost of PIP benefits be born by the insurer of the responsible party, not by the insurer of the victim.” Plaintiff Fernandez, was injured when his vehicle was struck by a semi-trailer. His insurer, Nationwide Mutual, paid the maximum $250,000 in PIP benefits, which did not cover all of his injuries. Fernandez sued truck owner Go Pro Waste Services for the deficiency. Soon after, Nationwide filed a subrogation claim against Proformance Insurance Company, Go Pro’s carrier, for the $250,000 paid out. Fernandez and Go Proformance settled for $1,000,000, but the insurer paid him $750,000 and deposited the remainder with the court, pending the outcome of arbitration between Nationwide and Proformance.

Fernandez filed a separate action. Hudson County Superior Court Judge John O’Shaughnessy ruled that Nationwide could only recover after Fernandez was made whole and if excess funds remained. The Appellate Division reversed, and the Supreme Court affirmed in a 3-3 decision with 1 recusal.

Measure S191, was introduced in direct response to the Fernandez ruling. A thorough discussion of the bill can be found in the February 7 and February 14, 2011 edition of the New Jersey Law Journal. For more information, contact Christopher D. Devanny at cdevanny@kentmcbride.com

NEW PA RULE OF CIVIL PROCEDURE REQUIRES INSURANCE ADJUSTERS TO ATTEND PRE-TRIAL CONFERENCES

On January 15, 2011, the Pennsylvania Supreme Court amended several rules of civil procedure, including Pa.R.C.P. 212.3, 215 and 216, pertaining to pre-trial conferences and settlement conferences.

Of particular note is the new provision relating to Pre-Trial Conferences which empowers the trial judge to require various parties to attend, including insurance adjusters or others who have settlement authority. The Rule goes on to state that, if the Pre-Trial Conference is set up without any Court order regarding the attendance of an insurance representative with settlement authority, such a person is nevertheless required by the Rule to attend the conference in person "or be promptly available by phone."

 Here is a link to all of the amendments to the Rules noted as contained in the January 8, 2011 Pennsylvania Bulletin:  http://www.pabulletin.com/secure/data/vol41/41-2/30.html 

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