The Supreme Court of New Jersey recently held in Johnson v. Roselle EZ Quick LLC, A-33-14, 2016 N.J. LEXIS 712 (July 27, 2016), that the 2011 amendment to the New Jersey Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 to 35 (the “No-Fault Act”) applies prospectively only. The amendment provided that the claim of an injured person must be satisfied before there can be recovery by a no-fault insurer of medical benefits it had paid.
The underage plaintiff in Johnson purchased a bottle of vodka, consumed the vodka and crashed his mother’s car into a tree in December 2009. Plaintiff is now a paraplegic. Plaintiff filed a claim for personal injury protection (PIP) benefits through his mother’s auto insurer, GEICO. GEICO paid the full PIP benefits policy limit of $250,000 in 2010. In June 2011, plaintiff filed suit against the liquor store for negligent service of alcoholic beverages to a minor and against GEICO for additional no-fault insurance benefits. GEICO filed a cross-claim for reimbursement from the liquor store and its insurer, One Beacon Insurance and/or The Camden Fire Insurance Association, pursuant to N.J.S.A. 39:6A-9.1 which allows an insurer paying PIP benefits to recover the amount of the payment from a tortfeasor.
Plaintiff then entered into a settlement with the liquor store and its insurer for the $1,000,000 policy limits. The court held a portion of the settlement until GEICO’s claim for PIP reimbursement could be resolved. GEICO and plaintiff then filed cross-motions for summary judgment for the portion of the settlement held by the court. GEICO argued that it was entitled to reimbursement from the tortfeasor’s insurer even if it would prevent plaintiff from being made whole. Plaintiff relied on the January 28, 2011 amendment to N.J.S.A. 39:6A-9.1, arguing that as an injured party, his claim must be satisfied before any recovery by an insurer.
The trial court held that because plaintiff’s claim for PIP benefits was filed before the 2011 amendment was enacted, the amendment did not apply to that claim and GEICO was entitled to reimbursement. The Appellate Division affirmed with one member of the panel dissenting. The Supreme Court affirmed, rejecting plaintiff’s argument that the amendment should apply retroactively. The Court noted that generally, newly enacted laws are applied prospectively. As the Legislature did not express an intent that the amendment apply retroactively, the amendment was not curative, and the expectations of the parties did not warrant retroactive effect, the Court held the amendment must apply prospectively. Although plaintiff’s recovery was thus diminished, the Court found that GEICO was entitled to reimbursement. Justice Albin dissented, stating that the Court’s holding perpetuates the very injustice the 2011 amendment to the No-Fault Act was intended to eliminate.