COURT VACATES ARBITRATORíS MISTAKEN APPLICATION OF NJ PIP RECOVERY STATUTE OF LIMITATIONS (LOJM CASE)
GEICO Insurance Company v. Erie Insurance Company
New Jersey Law Division: Bergen County
Docket No. BER-L-9751-14
(January 5, 2015)

Plaintiff filed in Arbitration Forums (AF) for PIP reimbursement within the Statute of Limitations (SOL). AF dismissed as the claim was above Defendantís policy limits (NB: In truth, PIP can't be recovered above an insurer's limits unless there is excess insurance available, see here). Plaintiff re-filed in AF with accepting limits. AF dismissed, saying that Plaintiff was SOL.

Noah Gradofsky of Law Offices of Jan Meyer and Associates, P.C. asked the NJ trial court to vacate the AF ruling, arguing that (a) the original arbitration filing between signatory parties satisfied the NJ PIP SOL even if eventually the case could not be hear by AF; and (b) since the AF rules require that decisions be "based on local jurisdictional law," AF errors of law constitute the arbitratorís exceeding the arbitratorís authority, thus requiring the court to vacate the decision. The Honorable Susan Steele J. Steele, J.S.C. of the New Jersey Superior Court, Bergen County, agreed.

The court agreed with LOJM's analogy to the case of Allstate Insurance Co. v. Universal Underwriters Insurance Co., 330 N.J. Super. 628, 636 (App.Div. 2000), where payment of a portion of the PIP reimbursement claim was held to satisfy the Statute of Limitations as to any future disputes that arose. The Allstate court wrote that "Once the parties agreed that Universal would reimburse Allstate for the initial PIP payments, the two-year statute of limitations, contained in N.J.S.A. 39:6A-9.1, was no longer a factor . . . [t]he applicable statute of limitations was satisfied by the agreement[]" (for further discussion on Allstate click here). In the GEICO case, Judge Steele wrote, at pages 16-17, that, "[l]ike in Allstate, plaintiff's formal demand for arbitration and the parties' agrement to proceed through AF took place within two years of the filing of the insured's PIP claim, thereby satisfying the statute of limitations. Once satisfied, the statute of limitations could no longer be raised as it pertains to the controversy between the parties." Judge Steele further stated that, "[t]he court finds the arbitrator exceeded his powers by incorrectly applying the New Jersey law concerning the statute of limitations[,]" citing N.J.S.A. 2A:23B-23(4). Id. at 17.

A copy of this case can be downloaded here.

Please visit our Guide to Recovery of PIP in New Jersey for the text of the key New Jersey statutes regarding PIP recovery, together with an outline of those statutes, hyperlinks to definitions of key terms, discussions of key provisions of each statute, relevant case law, and other selected issues of New Jersey subrogation.

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