In the Law Division case of Wise v. Marienski, L-2741-09 a Union County New Jersey superior court judge was presented with the question of whether plaintiffs injured in a motor vehicle accident could recover as damages unpaid medical expenses which exceeded their minimal PIP policy, or whether their election of minimal limits barred them from recovery of any medical expenses which exceeded their limits.
The plaintiffs were occupants of a vehicle which was rear-ended by defendant Marienski. They were covered by a policy of insurance which provided only $15,000 in personal injury protection (PIP) limits, which were fully exhausted as a result of the medical treatment received by each. As a result, both plaintiffs had in excess of $20,000.00 in outstanding medical bills. Defendant Marienski moved to bar plaintiffs from introducing their unpaid bills into evidence at time of trial, contending that under New Jersey law medical expenses “paid or payable” under PIP are non-recoverable in a third party lawsuit.
At issue was whether N.J.S.A. 39:6A-12, which states that evidence of the amounts collectible or paid under a “standard automobile insurance policy” pursuant to 39:6A-4 to an injured person, including the amounts of any deductibles, co-payments or exclusions otherwise compensated, are inadmissible in a civil action for recovery of damages for bodily injury, applies in the situation where the plaintiff has elected lower PIP limits and incurs medical expenses which exceed those lower limits.
The motion judge reviewed the history of New Jersey’s insurance legislation, specifically the 1998 Automobile Insurance Cost Reduction Act (AICRA), which changed the first clause of N.J.S.A. 39:6A-12 to state that evidence of the amounts collectible or paid under a standard automobile insurance policy pursuant to 39:6A-4 to an injured person, including the amounts of any deductibles, co-payments or exclusions otherwise compensated, is not admissible in a civil action for recovery of damages for bodily injury. By enacting AICRA, the New Jersey Legislature permitted insurers to offer reduced levels of PIP coverage compared to the pre-AICRA law (which mandated a minimum of $250,000.00 in PIP medical expense benefits). So while the pre-AICRA system required a “standard” automobile insurance policy to provide $250,000.00 in medical expense benefits, AICRA allowed for lower limits to be offered.
The defendant argued that the previously-decided cases of Roig v. Kelsey , D’Aloia v. Georges and Kim v. Kim, required that N.J.S.A. 39:6A-12 be interpreted to bar plaintiffs from recovering their medical expenses beyond the $15,000.00 limits provided by their applicable PIP policy.
The D’Aloia and Roig’s cases held that amounts paid by injured plaintiffs in the form of deductibles and co-payments were not recoverable. Kim addressed the question of whether, in a case where the plaintiff had chosen a $15,000.00 PIP limit, N.J.S.A. 39:6A-12 prohibited the introduction of medical expense evidence over that amount. In its ruling, the Kim court took into account the definition of “standard automobile insurance policy” in N.J.S.A. 39:6A-12, which it took to mean the original $250,000.00 PIP limit, which changed when the AICRA legislation was enacted. The Kim court held that by allowing insureds the option of paying lower premiums in exchange for lesser amounts of coverage, the Legislature essentially created a trade-off, whereby in exchange for lower premiums, an insured gave up his or her rights in tort. The Kim plaintiff had therefore in effect bargained away its right to sue for the amounts in excess of its $15,000 PIP policy.
The court disagreed with the Kim ruling, noting that N.J.S.A. 39:6A-2(k)’s definition of “economic loss” specifically included “medical expenses.” Since N.J.S.A. 39:6A-12 prohibits itself from being interpreted to preclude a victim in an automobile accident from recovering uncompensated economic losses from a tortfeasor, the motion judge concluded the Legislature intended to permit recovery of medical expenses for which a motor vehicle accident plaintiff had not been compensated.
Therefore, if this ruling stands, the amount “collectible” under N.J.S.A. 39:6A-12 would depend upon the actual limit of the insured’s PIP policy, which in this case was $15,000.00, rather than what had been the “standard” of $250,000.00. The plaintiffs were only barred from admitting into evidence medical expenses below their actual PIP limits, and were permitted to recover unreimbursed medical expenses in excess of their $15,000.00 PIP limits.