SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)
Karon K. Johnson v. Roselle EZ Quick LLC (075044) (A-33-14)
Argued January 5, 2016 – Decided July 27, 2016
CUFF, P.J.A.D. (temporarily assigned), writing for a majority of the Court.
In this appeal, the Court considers whether a 2011 amendment to N.J.S.A. 39:6A-9.1 (2011 amendment),
which allows a personal injury protection (PIP) provider to obtain reimbursement from the tortfeasor’s insurer for
payments that the PIP provider made to the injured insured only after the insured’s claim is satisfied in full, applies
retroactively.
On December 16, 2009, plaintiff Karon K. Johnson sustained severe personal injuries after driving his
mother’s car into a tree while intoxicated, rendering him a paraplegic. Plaintiff filed a claim for PIP benefits with
defendant GEICO Insurance Company (GEICO), and GEICO paid the policy limit for PIP coverage of $250,000.
On June 19, 2011, plaintiff commenced suit against defendant Roselle EZ Quick LLC, which owned and operated L
& J Liquor & Deli, and the non-insurer defendants (collectively, EZ Quick), asserting claims for negligent service of
alcoholic beverages to a minor. Plaintiff also sued GEICO, seeking payment of additional PIP benefits. GEICO
filed crossclaims against EZ Quick, and a third-party complaint against its insurer (One Beacon), seeking
reimbursement for the PIP benefits that it paid to plaintiff. GEICO relied on N.J.S.A. 39:6A-9.1, as it was written
prior to the 2011amendment, and the decision in Fernandez v. Nationwide Mutual Fire Insurance Co., 402 N.J.
Super. 166 (App. Div. 2008), aff’d by an evenly divided court, 199 N.J. 591 (2009), which addressed insurers’
claims for reimbursement under the statute.
On August 9, 2012, EZ Quick settled with plaintiff, and agreed to pay the limit of its policy with One
Beacon in the amount of $1,000,000.00. Plaintiff agreed that a portion of the payment would be held by the court
(withheld payment) until GEICO’s claim for PIP reimbursement was resolved. Plaintiff and GEICO filed cross-
motions for summary judgment regarding the withheld payment. GEICO argued that it was entitled to the withheld
payment even though this would prevent plaintiff from being fully compensated by EZ Quick on his claim for
bodily injury. GEICO relied on N.J.S.A. 39:6A-9.1, prior to the 2011 amendment. Plaintiff asserted that GEICO
was precluded from obtaining reimbursement of the PIP benefits that it paid until his claims against EZ Quick were
satisfied in full. Plaintiff relied on the 2011 amendment, and argued that although the amendment was enacted on
January 28, 2011, and thus after he had filed his claim for PIP benefits, it should be applied retroactively. The trial
court disagreed, and concluded that the amendment was not retroactive. The court granted GEICO’s motion for
summary judgment on the withheld payment, thereby awarding GEICO reimbursement of the $250,000,00 payment
for PIP benefits to plaintiff, and accumulated interest.
Plaintiff appealed, and GEICO cross-appealed. A divided panel of the Appellate Division affirmed the trial
court’s determination. A majority of the panel agreed with the trial court that nothing in the amendment indicated
that it should apply retroactively. The panel majority further found no basis for retroactivity under the common law.
One member of the panel dissented, and concluded that the amendment should be applied to claims that were
unresolved and unpaid before its passage, based on the sponsors’ statements explaining the amendment and the
panel member’s conclusion that the amendment is curative. The dissenting member also concluded that the 2011
amendment applied because the PIP provider’s claim did not accrue until the tortfeasor’s liability was established in
August 2012 when plaintiff and EZ Quick reached a settlement, which was after the date on which the amendment
was adopted. Plaintiff filed an appeal as of right. R. 2:2-1(a)(2).
HELD: The 2011 amendment to N.J.S.A. 39:6A-9.1 does not expressly or implicitly present any of the factors
necessary to rebut the presumption that, as a newly enacted law, it should be applied prospectively. Consequently,
the amendment does not apply to plaintiff’s claims for personal injuries. The trial court therefore properly granted
GEICO’s motion for summary judgment on its claim for reimbursement of the PIP benefits that it paid to plaintiff.
1
1. Prior to 1972, insurers were free to file suit against other insurers to recover payments for medical expenses
based on the common-law right of subrogation. After the New Jersey Automobile Reparation Reform Act, N.J.S.A.
39:6A-1 to -35 (No-Fault Act), was enacted in 1972, and based on judicial interpretations of an insurer’s subrogation
rights, it became necessary to clarify and reaffirm an insurer’s right to reimbursement through subrogation. As a
result, in 1983, the Legislature enacted N.J.S.A. 39:6A-9.1, which expressly permits an automobile insurer to obtain
reimbursement of the PIP benefits that it paid to an insured. In Fernandez, the Appellate Division recognized that,
under the statute, a PIP carrier which has paid PIP benefits is entitled to reimbursement from the insurance coverage
of a third-party tortfeasor, even if the tortfeasor’s insurance policy would then become insufficient to make the
insured injured party whole. An equally divided Supreme Court recognized this holding as the controlling
application of the No-Fault Law for more than a decade, undisturbed by any legislative disapproval. (pp. 12-17)
2. The 2011 amendment to N.J.S.A. 39:6A-9.1 was intended to reverse the holding in Fernandez, by providing that
an insurer’s claim for reimbursement of PIP benefits is subject to the injured party’s claim against the tortfeasor, and
shall be paid only after satisfaction of that claim. Whether the 2011 amendment should be applied retroactively, as
plaintiff asserts, is a legal question of statutory interpretation. (pp. 17-18)
3. As a general rule, newly enacted laws are applied prospectively. Whether a court should apply a statute
retroactively requires the court to determine whether the Legislature intended to give the statute retroactive
application. Legislative intent for retroactivity can be demonstrated by the following: (i) when the Legislature
expresses its intent that the law apply retroactively, either expressly, in the statute or pertinent legislative history, or
implicitly, such as where retroactive application may be necessary to make the statute workable or provide the most
sensible interpretation; (ii) when an amendment is curative, and thus designed to carry out or explain the intent of
the statute; or (iii) when the parties’ expectations warrant that interpretation. (pp. 18-22)
4. The 2011 amendment does not include any language evidencing that it applies retroactively. Because the
amendment altered the reimbursement scheme established by the pre-amendment statute, and changed settled law, it
cannot be applied retroactively without an unequivocal expression of legislative intent, which is absent here. A
legislative intent for retroactive application cannot be inferred from the unofficial statements of individual
legislators. Additionally, the amendment is not curative because it was not designed to carry out or explain the
intent of the original statute. Instead, it was intended to change settled law by providing that PIP insurers cannot
receive PIP reimbursement that would prevent the injured party from being made whole. There is also no basis to
conclude that it was the parties’ expectation that GEICO would be unable to seek reimbursement until plaintiff was
made whole. Because none of the three factors warranting retroactive application are present in this matter, the
Court does not determine whether retroactive application would result in an unconstitutional interference with
vested rights, or a manifest injustice. (pp. 22-30)
5. Plaintiff’s alternative argument that, even if the statute is applied prospectively, he should prevail, does not
entitle him to relief. Pursuant to the express language of the statute and the controlling case law, GEICO’s claim
accrued when it paid plaintiff’s PIP claim on August 20, 2010, and the law in effect at that time is applicable. The
2011 amendment was adopted later, and therefore does not apply to plaintiff’s claim. (pp. 30-34)
The judgment of the Appellate Division is AFFIRMED.
JUSTICE ALBIN, DISSENTING, agrees that the 2011 amendment should not be applied retroactively.
However, Justice Albin would conclude that the accrual date of GEICO’s claim did not give it a vested right to a PIP
reimbursement after passage of the amended statute. Nothing in the amended statute suggests that the Legislature
intended that, after the law’s effective date, an insurer should be made whole at the expense of the insured,
particularly since this is the result that the amendment was enacted to prevent.
CHIEF JUSTICE RABNER, and JUSTICES LaVECCHIA, PATTERSON, and SOLOMON, join in
JUDGE CUFF’s opinion. JUSTICE ALBIN filed a separate, dissenting opinion. JUSTICE FERNANDEZ-
VINA did not participate.
2
SUPREME COURT OF NEW JERSEY
A-33 September Term 2014
075044
KARON K. JOHNSON,
Plaintiff-Appellant,
v.
ROSELLE EZ QUICK LLC, L & J
LIQUOR & DELI, HARSHIRA
PATEL, SURESH PATEL, GREGORY
PARISI, INTREPID
INVESTIGATIONS,
Defendants,
and
GEICO INSURANCE COMPANY,
Defendant-Respondent,
and
GEICO INSURANCE COMPANY,
Third-Party Plaintiff,
v.
ONE BEACON INSURANCE and THE
CAMDEN FIRE INSURANCE
ASSOCIATON,
Third-Party Defendants.
Argued January 5, 2016 – Decided July 27, 2016
On appeal from the Superior Court, Appellate
Division.
James C. Mescall argued the cause for
appellant (Mescall & Acosta, attorneys).
1
Curtis J. Turpan argued the cause for
respondent (Harwood Lloyd, attorneys; Mr.
Turpan and Paul E. Kiel, on the brief).
JUDGE CUFF (temporarily assigned) delivered the opinion of
the Court.
In this appeal, we consider whether a 2011 amendment to
N.J.S.A. 39:6A-9.1 should be applied retroactively. The
amendment provides that a personal injury protection (PIP)
insurance provider may be reimbursed for payments made to an
injured insured party by the tortfeasor’s insurer only after the
injured party’s claim is fully satisfied. The parties entered
into a policy agreement, plaintiff drove while intoxicated and
was injured in an automobile accident, and plaintiff filed a
claim for PIP benefits prior to the enactment of the 2011
amendment.
Plaintiff also filed a civil action alleging negligence by
the store that sold him alcohol. When that litigation settled,
and pursuant to the pre-amendment law, plaintiff’s PIP provider
sought priority reimbursement from the tortfeasor’s insurer,
even though doing so would prevent plaintiff from being fully
compensated on the bodily injury claim. Plaintiff contends that
this was improper because the legislative intent and purpose of
the 2011 amendment, along with the expectations of the parties,
justify retroactive application of the amendment to his case.
2
The trial court concluded that the amendment was not
retroactive and therefore granted in part the PIP provider’s
motion for summary judgment.1 The Appellate Division affirmed
over the dissent of one of its panel members. The dissenting
judge concluded that the amendment was retroactive and,
additionally, that the PIP provider’s claim did not accrue until
the tortfeasor’s liability was established, after the 2011
amendment was enacted.
This appeal comes before us as of right, and we now affirm.
In so doing, we conclude that plaintiff failed to rebut the
presumption that the 2011 amendment to N.J.S.A. 39:6A-9.1, as a
newly enacted law, is prospective. Specifically, the language
and legislative history of the amendment provide no indication
that the Legislature intended retroactive application. There is
also insufficient evidence that the amendment was merely
“curative,” because it altered well-settled law and was not
enacted in response to a misapplication of that law. Similarly,
given the established law at the time the agreement was entered
into and when the injury occurred, we cannot conclude that the
expectations of the parties warrant retroactivity.
We are also unpersuaded that PIP providers’ reimbursement
claims do not accrue until such a claim is filed or the
1 The remaining issues before the trial court are not at issue.
3
tortfeasor’s liability is established -- in this case, through
settlement. Such a position departs from settled practice that
a claim accrues when a party gains the right to institute a suit
and the statute of limitations begins to run. In cases such as
this, the claim accrues when the insured party files a claim for
PIP benefits. Moreover, accepting either of plaintiff’s
proposals would tie the date of accrual to illogical,
unpredictable, or statutorily disfavored events.
I.
On December 16, 2009, plaintiff Karon K. Johnson was twenty
years old. On that date, Johnson purchased a bottle of vodka
from L & J Liquor & Deli, owned and operated by defendants
Roselle EZ Quick, LLC, Harshira Patel, and Suresh Patel
(collectively, EZ Quick). Johnson was not asked for
identification when making his purchase. Several hours later,
after consuming some of the vodka, Johnson was seriously injured
when he drove his mother’s car into a tree. Johnson’s blood
alcohol content was determined to have been 0.128% at the time
of the crash. Johnson suffered serious injuries rendering him a
paraplegic.
Johnson filed a claim for PIP benefits on August 8, 2010,
through his mother’s auto insurer, defendant GEICO Insurance
Company (GEICO). By August 20, 2010, GEICO had paid the full
PIP benefits policy limit of $250,000 to Johnson. Over five
4
months later, on January 28, 2011, an amendment to N.J.S.A.
39:6A-9.1 was enacted preventing PIP carriers such as GEICO from
being reimbursed from a tortfeasor’s insurer for benefits the
PIP carrier paid to an insured party until the insured party’s
claims against the tortfeasor are fully satisfied. L. 2011, c.
11, § 1.
On June 10, 2011, Johnson filed suit in the Law Division
against EZ Quick for the negligent service of alcoholic
beverages to a minor, and against GEICO for additional no-fault
insurance benefits.2 GEICO filed its answer on December 20,
2011, in which it requested contribution and indemnification
from EZ Quick. GEICO also sought PIP reimbursement from EZ
Quick, pursuant to N.J.S.A. 39:6A-9.1. On February 22, 2012,
GEICO filed a third-party complaint seeking the same relief from
EZ Quick’s insurer, One Beacon Insurance and/or The Camden Fire
Insurance Association (collectively, One Beacon).
On August 9, 2012, Johnson entered into a settlement
agreement and release with EZ Quick and One Beacon. Under the
agreement, EZ Quick agreed to pay Johnson $1,000,000, the limit
of its policy with One Beacon. The $1,000,000 was to be divided
2 Johnson also alleged that defendants Gregory Parisi and
Intrepid Investigations tampered with evidence. Those claims
were dismissed with prejudice and are not at issue in this
appeal. Johnson’s claims against GEICO for additional insurance
benefits are also not at issue in this appeal.
5
as follows: $251,449.90 to Johnson’s attorneys; $483,970.10 to
Johnson’s special-needs trust; and $264,580 to the court to be
held until GEICO’s claim for PIP reimbursement was resolved.
The trial court approved the settlement and dismissed with
prejudice Johnson’s claims against EZ Quick on August 15, 2012.
GEICO and Johnson filed cross-motions for summary judgment
regarding the $264,580 held by the court pending resolution of
GEICO’s reimbursement claim. In support of its motion, GEICO
argued, pursuant to N.J.S.A. 39:6A-9.1, as interpreted by
Fernandez v. Nationwide Mutual Fire Insurance Co., 402 N.J.
Super. 166 (App. Div. 2008) (Fernandez I), aff’d by an evenly
divided court, 199 N.J. 591 (2009) (Fernandez II), that it was
entitled to reimbursement from One Beacon, EZ Quick’s insurer,
even if the limits of EZ Quick’s policy would prevent Johnson
from being made whole. The portion of N.J.S.A. 39:6A-9.1 on
which GEICO relied states, in part, that
[a]n insurer . . . paying . . . personal injury
protection benefits . . . as a result of an
accident occurring within this State, shall,
within two years of the filing of the claim,
have the right to recover the amount of
payments from any tortfeasor who was not, at
the time of the accident, required to maintain
personal injury protection . . . benefits
coverage, other than for pedestrians, . . . or
although required did not maintain personal
injury protection or medical expense benefits
coverage at the time of the accident.
[N.J.S.A. 39:6A-9.1(a).]
6
That section was not altered by the 2011 amendment. L. 2011, c.
11, § 1.
In response, Johnson argued that GEICO was prevented from
recovering its payments until his own claim against EZ Quick was
fulfilled. In support, Johnson cited the 2011 amendment to
N.J.S.A. 39:6A-9.1, which limits an insurer’s right to recover
PIP benefit payments from a tortfeasor, by providing that
[a]ny recovery by an insurer . . . pursuant to
this subsection shall be 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.
[L. 2011, c. 11, § 1 (codified as N.J.S.A.
39:6A-9.1(b)).]
The amendment, which was enacted on January 28, 2011, was to
“take effect immediately.” L. 2011, c. 11, § 2. Although
enacted more than a year after he was injured and over five
months after he filed a claim for PIP benefits, Johnson
contended that the amendment applied retroactively.
In a written decision, the trial court rejected Johnson’s
argument that the 2011 amendment to N.J.S.A. 39:6A-9.1 should be
applied retroactively. The court found that the amendment’s
language indicated that it was to take effect “immediately,”
that the available legislative history did not demonstrate a
curative purpose, and that GEICO fairly expected the pre-
7
amendment version of the law to apply. As a result, the trial
court entered summary judgment in favor of GEICO. The trial
court subsequently entered a final order stating that GEICO was
entitled to withdraw $250,000, plus all accumulated interest,
from the $264,580 held by the court. The balance was to go to
Johnson.
Johnson appealed and GEICO cross-appealed. A divided
Appellate Division affirmed in an unpublished opinion. The
majority agreed that the language of the 2011 amendment stated
that it was to take effect immediately and that the Legislature
could have indicated otherwise had it so intended. The majority
similarly found no retroactive intent in the legislative history
and concluded that the amendment was not curative because it
substantially altered the substance and intent of the statute.
The majority also found that the parties’ expectations did not
warrant retroactive application because the pre-amendment law
was in effect at the time of the crash and when Johnson claimed
the PIP benefits.
Addressing an issue not raised before the trial court, the
majority next held that the amendment applies when the injured
party submits a PIP claim on or after the effective date of the
amendment, January 28, 2011. The court reasoned that a prior
decision established that an insurer’s right to recover PIP
payments arises when an injured party submits a PIP claim. As
8
such, the majority rejected Johnson’s argument that the
amendment applied because GEICO’s claim only accrued when it
filed its third-party complaint -- an event that the court
described as an unusual, unreliable, and statutorily unsupported
benchmark.
One member of the panel dissented. Addressing
retroactivity, the dissenting judge concluded that statements
made by the amendment’s sponsors clearly indicated an intent to
apply the amendment to claims unresolved and unpaid before its
passage and that the amendment was curative because it clarified
the legislative intent of the statute. The dissenting judge
also stated that retroactive application would not affect any
vested rights held by GEICO because GEICO was required to pay
the PIP benefits to Johnson regardless of whether it could be
reimbursed.
The dissent also maintained that neither Johnson nor GEICO
had a right to be compensated until One Beacon’s obligation to
cover the claim was conceded or established, and that GEICO’s
right to reimbursement therefore did not exist until August
2012, when Johnson and EZ Quick settled Johnson’s claim. As a
result, according to the dissent, the trial court was bound to
apply the 2011 amendment, which was in force at that time.
Johnson appealed to this Court as of right. R. 2:2-
1(a)(2).
9
II.
A.
Johnson asserts three arguments on appeal. First, he
contends that the 2011 amendment to N.J.S.A. 39:6A-9.1 should be
applied retroactively because its legislative history, including
statements made by its sponsors, implies such an intent.
Johnson also relies on those statements made by individual
sponsors to argue that the amendment was curative because it was
meant to improve N.J.S.A. 39:6A-9.1 and correct judicial
misinterpretation of that statute. In addition, Johnson
maintains that retroactivity would be consistent with the
parties’ expectations because, at the time of contracting, he
expected to receive no-fault benefits from GEICO, and GEICO
expected to receive insurance premiums in exchange for that
coverage. Johnson also argues that retroactivity would not
cause manifest injustice because GEICO has not quantified the
financial impact of applying the amendment retroactively.
Second, Johnson argues that the amendment controls because
GEICO did not file its third-party complaint seeking
reimbursement from One Beacon until February 22, 2012, and the
amendment, if not retroactive, applies to “any legal actions
commenced after the effective date” of January 28, 2011.
Alternatively, Johnson adopts the dissent’s conclusion that
GEICO did not have a right to reimbursement until Johnson’s
10
claim against One Beacon was settled on August 9, 2012.
Third, Johnson argues for the first time that the right to
the disputed $250,000 is governed by the insurance contract with
GEICO, which does not entitle GEICO to reimbursement for PIP
benefits owed to insured parties. Johnson therefore submits
that permitting such reimbursement would be contrary to the
parties’ expectations in executing the agreement.
B.
In response, GEICO contends that none of the exceptions for
retroactivity apply to the 2011 amendment. GEICO argues that
there is no explicit or implicit legislative intent for
retroactivity, as reflected by the amendment’s immediate
effective date, and that the sponsors’ oral statements cited by
Johnson are not entitled to interpretative weight. GEICO
contends that the amendment was not curative because its
prioritization of payments to injured parties departs from the
statute’s original legislative intent and represents a change in
settled law, rather than an attempt to merely make the statute
more workable or sensible, and because it was enacted in
response to a disagreement with a judicial decision.
GEICO also argues that retroactivity would not comport with
the parties’ expectations because the pre-amendment version of
the law was in effect when Johnson filed for PIP benefits, and
because the law was well-settled at that point. Similarly,
11
GEICO argues that retroactive application would result in
manifest injustice by denying GEICO, along with other parties in
similar situations, expected PIP reimbursements.
GEICO also urges the Court to affirm the Appellate
Division’s holding that the amendment, when applied
prospectively, is inapplicable in this case because GEICO’s
claim accrued when Johnson filed for PIP benefits on August 8,
2010. Like the appellate panel, GEICO notes that the “two-year
time period within which a PIP carrier can assert a right to
reimbursement under N.J.S.A. 39:6A-9.1 begins to run when a PIP
claim is filed[,]” and that, “[g]enerally, a cause of action
accrues when the applicable statute of limitation[s] begins to
run.”
Finally, GEICO requests that the Court reject Johnson’s
argument regarding the language in the insurance policy because
that issue was not raised before the trial or appellate courts
and does not involve a matter of public concern.
III.
A.
Before 1972, “insurers were free to file suit against other
insurers to recover payments for medical expenses based on the
common-law right of subrogation.” State Farm Mut. Auto. Ins.
Co. v. Licensed Beverage Ins. Exch., 146 N.J. 1, 6 (1996). That
approach, however, was considered “an inefficient means of
12
compensation since it required expensive and time-consuming
litigation, and . . . would not compensate drivers whose own
fault caused their injuries.” Ibid. (quoting Garden State Fire
& Cas. Co. v. Commercial Union Ins. Co., 176 N.J. Super. 301,
305 (App. Div. 1980)).
As a result, in 1972, the Legislature enacted the New
Jersey Automobile Reparation Reform Act,3 N.J.S.A. 39:6A-1 to -35
(the No-Fault Act), to “eliminate this type of litigation” by
requiring automobile insurers to provide “primary coverage” and
“pay the medical expenses of [their] insured[,]” State Farm,
supra, 146 N.J. at 6 (quoting Garden State Fire, supra, 176 N.J.
Super. at 305). The No-Fault Act also provided a limited
subrogation right, in that PIP carriers would be “subrogated to
the rights of any party to whom [they] make[] [PIP] payments,”
but only through “inter-company arbitration or by inter-company
agreement” with the tortfeasor’s insurer. L. 1972, c. 70, § 9.
That provision would also become “inoperative” two years from
its effective date. Ibid.
Nine years after its passage, the Court concluded that,
following the expiration of the No-Fault Act subrogation
provision, “an insurer’s right to ‘subrogation,’ if any, would
3 In 1998, the No-Fault Act was amended by the Automobile
Insurance Cost Reduction Act, commonly known as AICRA. See L.
1998, c. 21, § 1 (codified as N.J.S.A. 39:6A-1.1).
13
be the same as prior to [the provision’s] enactment.” Aetna
Ins. Co. v. Gilchrist Bros., 85 N.J. 550, 567 (1981). In the
same opinion, however, the Court held that another section of
the No-Fault Act, which stated that “[e]vidence of the amounts
collectible or paid pursuant to [PIP coverage] . . . is
inadmissible in a civil action for recovery of damages for
bodily injury by such injured person[,]” id. at 562 (quoting
N.J.S.A. 39:6A-12), extinguished an injured person’s right “to
maintain an action for PIP payments[,]” ibid. As a result,
because the No-Fault Act “eliminated the ability of the insured
in an action in this State to recover damages from the
tortfeasor for the amounts collectible or paid under PIP[,]”
ibid., insurers had no right to reimbursement through
subrogation, id. at 567.
In 1983, the Legislature responded to the Court’s decision
in Aetna by enacting N.J.S.A. 39:6A-9.1.4 State Farm, supra,
146 N.J. at 9. The purpose of that amendment was to “alleviate
the imbalance” caused by Aetna by “allowing automobile insurers
to recover PIP through reimbursement.” Ibid. (citations
omitted). The insurers’ new right of reimbursement was primary
to, and independent of, any insured’s rights, including the
4 The Legislature also created an exemption in N.J.S.A. 39:6A-12
for the admissibility of evidence of the amount of insurance
benefits paid to an injured party for actions brought pursuant
to N.J.S.A. 39:6A-9.1. L. 1983, c. 362, § 11.
14
right to subrogation. Ibid.
That reimbursement right, as enacted, provided for recovery
from the tortfeasor’s insurer as follows:
An insurer paying personal injury protection
benefits in accordance with [N.J.S.A. 39:6A-4
or 39:6A-10], as a result of an accident
occurring within this State shall, within two
years of the filing of the claim, have the
right to recover the amount of payments from
any tortfeasor who was not, at the time of the
accident, required to maintain personal injury
protection coverage, other than for
pedestrians. In the case of an accident
occurring in this State involving an insured
tortfeasor, the determination as to whether an
insurer is legally entitled to recover the
amount of payments and the amount of recovery,
including the costs of processing benefit
claims and enforcing rights granted under this
section, shall be made against the insurer of
the tortfeasor, and shall be by agreement of
the involved insurers or, upon failing to
agree, by arbitration.
[L. 1983, c. 362, § 20.]
Subsequent amendments broadened the types of parties that
could seek reimbursement for benefits paid so that, by 2003,
N.J.S.A. 39:6A-9.1 provided that
[a]n insurer, health maintenance organization
or governmental agency paying benefits
pursuant to [N.J.S.A. 39:6A-4.3], personal
injury protection benefits in accordance with
[N.J.S.A. 39:6A-4 or 39:6A-10], medical
expense benefits pursuant to [N.J.S.A. 39:6A-
3.1] or benefits pursuant to [N.J.S.A. 39:6A-
3.3], as a result of an accident occurring
within this State, shall, within two years of
the filing of the claim, have the right to
recover the amount of payments from any
tortfeasor who was not, at the time of the
15
accident, required to maintain personal injury
protection or medical expense benefits
coverage, other than for pedestrians, under
the laws of this State, including personal
injury protection coverage required to be
provided in accordance with [N.J.S.A. 17:28-
1.4], or although required did not maintain
personal injury protection or medical expense
benefits coverage at the time of the accident.
[L. 2003, c. 89, § 53.]
Significantly, N.J.S.A. 39:6A-9.1 continuously provided PIP
providers a “right to recover the amount of payments from any
tortfeasor” without PIP coverage. L. 2003, c. 89, § 53. The
Legislature also did not alter the time when an insurer’s right
to reimbursement accrued. Ibid.
Thus, the Appellate Division in Fernandez I, supra,
addressed a consistent, over twenty-year-old framework for PIP
reimbursement when, in 2008, it held that, “where a PIP carrier
has paid benefits to its insured, it is entitled to
reimbursement of those benefits from the insurance proceeds of a
third-party tortfeasor . . . even if the limits of the
tortfeasor’s insurance policy are insufficient to make the
insured whole.” 402 N.J. Super. at 168-69. That decision was
affirmed the next year by an equally divided Supreme Court. In
affirming, three justices stated that the appellate holding “has
been the controlling application of the No-Fault Law in this
state for more than a decade, undisturbed by any legislative
disapproval.” Fernandez II, supra, 199 N.J. at 593. Those
16
justices also found no compelling reason “to justify
reinterpretation of the No-Fault Law,” and stated that the
Legislature could “alter the law” if it believed “that a
different policy is preferable[.]” Ibid.
Thereafter, the Legislature passed Senate Bill No. 191, an
amendment to N.J.S.A. 39:6A-9.1, which was signed into law by
the Governor on January 28, 2011. L. 2011, c. 11, § 1. The
amendment added the following language to the end of N.J.S.A.
39:6A-9.1, which is now part of subsection (b):
Any recovery by an insurer, health maintenance
organization or governmental agency pursuant
to this subsection shall be 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.
[L. 2011, c. 11, § 1 (emphasis added).]
The Sponsor’s Statement, the Senate Commerce Committee
Statement, and the Assembly Financial Institutions and Insurance
Committee Statement provided that the amendment was “in response
to” the Fernandez decisions, and that it “would reverse th[e]
outcome” of that case. Sponsor’s Statement to Senate No. 191
(2010); Senate Commerce Comm., Statement to Senate No. 191
(2010); Assembly Fin. Insts. & Ins. Comm., Statement to Senate
No. 191 (2010). The amendment provided that it would “take
effect immediately.” L. 2011, c. 11, § 2.
17
B.
The central question presented here is whether the 2011
amendment to N.J.S.A. 39:6A-9.1 was intended to apply
retroactively. The trial and appellate courts answered that
question in the negative on a motion for summary judgment. We
review an order granting summary judgment “in accordance with
the same standards as the motion judge.” Bhagat v. Bhagat, 217
N.J. 22, 38 (2014) (citations omitted). Such a motion will be
granted if the record demonstrates that there is no genuine
issue of material fact and “the moving party is entitled to a
judgment or order as a matter of law.” R. 4:46-2(c). Whether
the 2011 amendment should be applied retroactively is a purely
legal question of statutory interpretation. See McGovern v.
Rutgers, 211 N.J. 94, 108 (2012). We review questions of law de
novo, and do not defer to the conclusions of the trial or
appellate courts. Ibid.
C.
When interpreting a statute, “our overriding goal must be
to determine the Legislature’s intent.” Jersey Cent. Power &
Light Co. v. Melcar Util. Co., 212 N.J. 576, 586 (2013) (quoting
Cast Art Indus., LLC v. KPMG LLP, 209 N.J. 208, 221 (2012)).
“In most instances, the best indicator of that intent is the
plain language chosen by the Legislature.” Cashin v. Bello, 223
N.J. 328, 335 (2015) (quoting State v. Gandhi, 201 N.J. 161, 176
18
(2010)). “If the plain language leads to a clear and
unambiguous result, then our interpretive process is over.”
Richardson v. Bd. of Trs., Police & Firemen’s Ret. Sys., 192
N.J. 189, 195 (2007) (citing DiProspero v. Penn, 183 N.J. 477,
492 (2005)). It is only when there is ambiguity in the language
that we turn to extrinsic evidence, such as legislative history.
Id. at 195-96 (citing DiProspero, supra, 183 N.J. at 492-93).
Generally, newly enacted laws are applied prospectively.
James v. N.J. Mfrs. Ins. Co., 216 N.J. 552, 556 (2014). This
approach is based on “long-held notions of fairness and due
process[,]” Cruz v. Cent. Jersey Landscaping, Inc., 195 N.J. 33,
45 (2008), because, “although everyone is presumed to know the
law, no one is expected to anticipate a law that has yet to be
enacted[,]” Maeker v. Ross, 219 N.J. 565, 578 (2014) (citations
omitted). That practice, however, is no more than a rule of
statutory interpretation meant to “aid the court in the search
for legislative intent.” Twiss v. State, 124 N.J. 461, 467
(1991) (citation omitted). As such, it “is not to be applied
mechanistically to every case.” Gibbons v. Gibbons, 86 N.J.
515, 522 (1981) (citing Rothman v. Rothman, 65 N.J. 219, 224
(1974))).
Rather, “[t]wo questions inhere in the determination
whether a court should apply a statute retroactively.” Twiss,
supra, 124 N.J. at 467. “The first question is whether the
19
Legislature intended to give the statute retroactive
application.” Ibid. (citing Gibbons, supra, 86 N.J. at 522).
“If so, the second question is whether retroactive application
is an unconstitutional interference with ‘vested rights’ or will
result in a ‘manifest injustice.’” Ibid. (quoting State, Dep’t
of Envtl. Prot. v. Ventron Corp., 94 N.J. 473, 498-99 (1983)).
Both questions must be satisfied for a statute to be applied
retroactively.
In addressing the first question, legislative intent for
retroactivity can be demonstrated: “(1) when the Legislature
expresses its intent that the law apply retroactively, either
expressly or implicitly; (2) when an amendment is curative; or
(3) when the expectations of the parties so warrant.” James,
supra, 216 N.J. at 563. “Only if one of these grounds is
present, will we give a statute retroactive effect.” Cruz,
supra, 195 N.J. at 46.
The Legislature’s expression of intent to apply a statute
retroactively “may be either express, that is, stated in the
language of the statute or in the pertinent legislative history,
or implied, that is, retroactive application may be necessary to
make the statute workable or to give it the most sensible
interpretation[.]” Gibbons, supra, 86 N.J. at 522. When the
Legislature is silent on the issue, a prospective intent “may be
inferred from [the] knowledge that courts generally will enforce
20
newly enacted substantive statutes prospectively, unless [the
Legislature] clearly expresses a contrary intent.” Maeker,
supra, 219 N.J. at 578. Moreover, “a statute [that] changes the
settled law and relates to substantive rights is prospective
only, unless there is an unequivocal expression of contrary
legislative intent.” Phillips v. Curiale, 128 N.J. 608, 617
(1992) (alteration in original) (quoting Dewey v. R.J. Reynolds
Tobacco Co., 121 N.J. 69, 95 (1990)).
A statute is curative “if it is designed merely to carry
out or explain the intent of the original statute[,]” in that
its purpose is “to remedy a perceived imperfection in or
misapplication of a statute and not to alter the intended scope
or purposes of the original act.” Nelson v. Bd. of Educ., 148
N.J. 358, 370 (1997) (quoting Kendall v. Snedeker, 219 N.J.
Super. 283, 288 (App. Div. 1987)). A curative statute may
clarify, but may not change, the meaning of existing law.
Schiavo v. John F. Kennedy Hosp., 258 N.J. Super. 380, 386-87
(App. Div. 1992) (citing Carnegie Bank v. Shalleck, 256 N.J.
Super. 23, 29-40 (App. Div. 1992)), aff’d, 131 N.J. 400 (1993).
The same restrictions apply when the Legislature seeks to remedy
what it “perceive[s] as a misapplication of the law” by the
courts. 2nd Roc-Jersey Assocs. v. Town of Morristown, 158 N.J.
581, 605 (1999).
Finally, “in the absence of a clear expression of
21
legislative intent that the statute is to be applied
prospectively, such considerations as the expectations of the
parties may warrant retroactive application of a statute.”
Gibbons, supra, 86 N.J. at 523. In such circumstances, a court
will look at the controlling law at the relevant time and
consider the parties’ reasonable expectations as to the law.
James, supra, 216 N.J. at 573. An expectation of retroactive
application “should be strongly apparent to the parties in order
to override the lack of any explicit or implicit expression of
intent for retroactive application.” Ibid. For example, a
party may not rely on pending legislation because “[t]he
possibility that a bill might become law is an expectation built
on uncertainty until it happens.” Ibid.
IV.
Johnson concedes that the Legislature did not explicitly
provide that the 2011 amendment would be applied retroactively.
Rather, the amendment directs that it is to “take effect
immediately.” L. 2011, c. 11, § 2. Such language “bespeak[s]
an intent contrary to, and not supportive of, retroactive
application.” Cruz, supra, 195 N.J. at 48 (citation omitted).
Indeed, we have understood it to mean that newly enacted
provisions “will apply to claims that arise immediately after
the effective date of the amendment to the Act.” Id. at 49.
Like the 2011 amendment before us now, the amendment
22
considered in James, supra, stated that it was “to take effect
immediately.” 216 N.J. at 568. The amendment considered in
James prohibited inclusion of step-down provisions to provide
less uninsured and underinsured coverage for employees in motor
vehicle liability policies issued to corporate or business
entities. Id. at 555-56. There, the plaintiff had been injured
while driving his employer’s vehicle two months before the
amendment barring step-down clauses was enacted. Id. at 558-59.
The motor vehicle liability policy issued to the plaintiff’s
employer containing a step-down provision for employees was
issued five months before the amendment was enacted. Id. at
559. In determining whether the amendment was nonetheless meant
to be applied retroactively, the Court noted that, “had the
Legislature intended an earlier date for the law to take effect,
that intention could have been made plain in the very section
directing when the law would become effective.” Id. at 568
(citation omitted). In that case, however, “[n]either the law
nor the bill sponsor’s statement expresse[d] that the law was to
have operative effect before its stated effective date.” Ibid.
(citation omitted). As a result, “the plain language of the
statute simply [did] not specify an intended retroactive
effect[.]” Ibid.
As in James, the 2011 amendment to N.J.S.A. 39:6A-9.1 was
meant to “take effect immediately” and includes no language
23
indicating a retroactive intent. Had the Legislature sought to
apply the amendment to all pending claims, it could have adopted
the approach taken in other amendments, such as applying it to
“all actions and proceedings that accrue, are pending or are
filed” at the time of enactment. See Phillips, supra, 128 N.J.
at 611 (quoting L. 1987, c. 217, § 6). That it did not do so
indicates a lack of intent to depart from the standard practice
of prospective application. Maeker, supra, 219 N.J. at 578.
Nonetheless, Johnson argues that a retroactive intent may
be inferred from statements made by the amendment’s sponsors.
Those statements, however, are not official sponsor statements
affixed to a bill. See Panzino v. Cont’l Can Co., 71 N.J. 298,
301-02 (1976); Deaney v. Linen Thread Co., 19 N.J. 578, 584-85
(1955). Instead, they are unofficial statements of individual
legislators, which “are not generally considered to be a
reliable guide to legislative intent[,]” Berg v. Christie, ___
N.J. ___, ___ (2016) (slip op. at 40) (quoting State v. Yothers,
282 N.J. Super. 86, 104 (App. Div. 1995) (Skillman, J.A.D.,
dissenting)), because they “tell us only what the speaker . . .
believed” and “nothing about what the Legislature meant by the
words it chose to include in the amendment[,]” Cruz, supra, 195
N.J. at 48. The sponsors’ statements, like the text of the
amendment, only indicate that the amendment was to take effect
immediately, which, as noted, belies any claimed retroactive
24
intent.
We also do not find that retroactive application is
“necessary to make the statute workable or to give it the most
sensible interpretation[.]” Gibbons, supra, 86 N.J. at 522.
Johnson has offered no evidence to support such a finding, and
it appears that the pre-amendment law, although perceived by
some as unjust, was entirely workable, particularly in ensuring
that PIP carriers could seek reimbursement from tortfeasors.
Moreover, because the amendment altered the reimbursement
scheme established by the pre-amendment statute, the amendment
changed settled law. Between October 4, 1983 and January 28,
2011, PIP carriers had a primary right to reimbursement,
unconnected to the claims of the insured. The 2011 amendment
reversed that statutory order, making a PIP carrier’s
reimbursement contingent on full satisfaction of the insured’s
claims. An amendment altering settled law cannot be applied
retroactively without an “unequivocal expression of . . .
legislative intent[,]” Phillips, supra, 128 N.J. at 617 (quoting
Dewey, supra, 121 N.J. at 95), of which there is none here.
Further, our concern in Cruz, supra, 195 N.J. at 49, that
retroactive application could reach “beyond pending and non-
finalized claims[,]” thereby “rais[ing] the specter that all of
the awards that have been entered in years past would be
reopened[,]” is not dissipated by the fact that this amendment
25
may affect only a small number of cases.
For similar reasons, we conclude that the 2011 amendment
was not curative, because it was not “designed merely to carry
out or explain the intent of the original statute[,]” Nelson,
supra, 148 N.J. at 370, or “to remedy a perceived imperfection
in or misapplication of [the] statute[,]” ibid. (quoting
Kendall, supra, 219 N.J. Super. at 288). To the contrary, the
purpose of the amendment was to alter settled law by providing
that PIP insurers cannot receive reimbursements that would
prevent the injured party from being made whole. The amendment
therefore not only changed the reimbursement process, but also
altered the purpose of N.J.S.A. 39:6A-9.1, which had ensured
that PIP providers had a right to reimbursement for paid claims.
A statutory change based on public policy considerations cannot
be curative. James, supra, 216 N.J. at 573; see also Olkusz v.
Brown, 401 N.J. Super. 496, 503-04 (App. Div. 2008) (stating
that amendment expressing, “for the first time, the public
policy position of the Legislature” is not curative).
In addition, unlike in 2nd Roc-Jersey Associates, supra,
158 N.J. at 605, in which an official sponsor statement
explicitly provided that the amendment was meant to clarify
existing law, there is no indication in the legislative history
of the 2011 amendment that it was enacted to address a perceived
misapplication of the law. See also Cty. of Monmouth v.
26
Commc’ns Workers of Am., 300 N.J. Super. 272, 292 (App. Div.
1997) (finding statute curative where committee statement
provided that the amendatory act was meant to clarify existing
law). Similarly, in contrast to Twiss, supra, 124 N.J. at 468,
the amendment does not apply to a period of time preceding its
enactment, “as if [the act] had been in effect during that
period[,]” (emphasis omitted) (quoting N.J.S.A. 46:30B-5), and
retroactive application therefore would not reflect “the
Legislature’s attempt to improve the existing statutory scheme”
or be “necessary to achieve its remedial purposes,” ibid. To
the contrary, Johnson’s arguments rely on informal sponsor
comments, which, as noted, do not warrant interpretative weight.
Moreover, those statements do not evince a curative intent.
For example, although Johnson argues that the Assembly
Sponsor characterized the outcome in Fernandez II as “not what
the Legislature intended[,]” the Sponsor was actually describing
the view of the three justices who did not vote to affirm the
appellate decision in that case. Public Hearing Before Assembly
Fin. Insts. & Ins. Comm. at 4 (Dec. 9, 2010). Indeed, the
Sponsor later described the amendment as a “new policy[,]” id.
at 16, remedying “a quirk in the law that the Supreme Court has
recognized should be addressed[,]” id. at 7. The Senate
Sponsor’s statements -- that there was “a judicially determined
ranking of plaintiffs” and that the amendment would “rerank[]
27
the primacy in which we allow claims” -- also do not establish
that the Legislature viewed the Fernandez decisions as
misinterpreting the law, or that it intended the amendment to be
curative. Public Hearing Before Senate Commerce Comm. at 19
(Oct. 7, 2010).
The language used in the official sponsor and committee
statements, providing that the amendment was “in response” to,
and meant to “reverse,” the Fernandez decisions, also cannot
support retroactivity. Although the sponsor and committee
statements constitute legislative history, see State ex rel.
Hayling v. Corr. Med. Servs., Inc., 422 N.J. Super. 363, 373
(App. Div. 2011), we have found that such language does not
suggest a curative purpose or retroactive intent, see James,
supra, 216 N.J. at 562, 574 (finding amendment “not curative”
despite official sponsor statement that it was “in response to”
and would “reverse[] the effect” of specific court decision);
see also Serrano v. Gibson, 304 N.J. Super. 314, 319 (App. Div.
1997) (stating that “reverse” is “not [a] curative or
ameliorative term”). There is no justification for a different
conclusion in this case.
We also decline to find that the parties expected that
GEICO would be unable to seek reimbursement until Johnson was
made whole. In this case, the pre-amendment law was in effect
when the parties entered into the insurance contract, when
28
Johnson was injured, and when Johnson sought PIP benefits. Both
Fernandez decisions had also been issued by the time Johnson was
injured. Moreover, those decisions were rooted in earlier case
law establishing that carriers paying PIP benefits “have a right
to be made whole even though reimbursement may reduce the pool
of available insurance coverage to which the claimant . . . may
look for recovery.” Knox v. Lincoln Gen. Ins. Co., 304 N.J.
Super. 431, 437 (App. Div. 1997); see also David v. Gov’t Emps.
Ins. Co., 360 N.J. Super. 127, 140-41, 144 (App. Div.)
(reaffirming Knox and finding no conflict with IFA Insurance Co.
v. Waitt, 270 N.J. Super. 621 (App. Div.), certif. denied, 136
N.J. 295 (1994)), certif. denied, 178 N.J. 251 (2003).
As such, it would be reasonable for an insurer such as
GEICO to rely on the well-settled statutory and case law
establishing PIP carriers’ primacy in seeking reimbursements
when it issued the PIP policy and formed its expectations
regarding reimbursement. Any contrary expectations held by
Johnson or any other driver would have been completely contrary
to established law and cannot support retroactivity.
An amendment will not be applied retroactively unless one
of the three above-mentioned factors is present. Cruz, supra,
195 N.J. at 46. Because none of those factors are implicated by
the text, legislative history, or purpose of the 2011 amendment,
or by the expectations of the parties, we need not determine
29
whether retroactive application would result in unconstitutional
interference with “vested rights” or a “manifest injustice.”
Cf. Nobrega v. Edison Glen Assocs., 167 N.J. 520, 537 (2001).
V.
Johnson next contends that the amendment is applicable even
if applied prospectively because GEICO’s claim had not been
perfected at the time the Legislature amended the statutory
reimbursement order on January 28, 2011. Specifically, Johnson
argues that GEICO’s right to file a claim did not accrue until
it filed its third-party complaint against One Beacon on
February 22, 2012, or, in the alternative, when EZ Quick’s
liability was established through settlement between Johnson and
One Beacon on August 9, 2012. We are unpersuaded by this
argument.
A cause of action will accrue on the date that “‘the right
to institute and maintain a suit’ first arose.” White v.
Mattera, 175 N.J. 158, 164 (2003) (quoting Rosenau v. City of
New Brunswick, 51 N.J. 130, 137 (1968)). The date of accrual
also generally coincides with “the date on which the statutory
clock begins to run.” Ibid. (quoting Ali v. Rutgers, 166 N.J.
280, 286 (2000)); see also Poetz v. Mix, 7 N.J. 436, 445 (1951)
(stating that two-year limitations period would expire two years
from accrual of plaintiff’s claim).
30
An insurer paying PIP benefits to an injured party has a
right to recover the amount of its payments “within two years of
the filing of the claim[.]” N.J.S.A. 39:6A-9.1(a). In other
words, the insurer “must commence suit for reimbursement from a
tortfeasor within two years of ‘the filing of the claim.’” N.J.
Mfrs. Ins. Grp. v. Holger Trucking Corp., 417 N.J. Super. 393,
394 (App. Div. 2011). “The claim” that triggers the two-year
limitations period, based on the language and purpose of the
statute, is the injured party’s “submission of the PIP claim
form[.]” Id. at 399-400; see also N.J. Auto. Full Ins.
Underwriting Ass’n v. Liberty Mut. Ins. Co., 270 N.J. Super. 49,
53 (App. Div. 1994) (stating Legislature intended “to limit the
right of insurers to seek reimbursement for PIP payments from
the tortfeasor to a period of two years, which period begins to
run from the filing of the claim”).
Thus, pursuant to the express language of the statute and
settled case law, GEICO’s claim accrued, and the statute of
limitations began to run, when Johnson filed his PIP claim on
August 8, 2010. The Legislature has provided no justification
or intent, whether explicit or implicit, for us to reach a
different result. The cases cited by Johnson, therefore, are
inapposite. See, e.g., James, supra, 216 N.J. at 568-69
(finding “language of the new law” clearly showed legislative
intent to affect policies in force at enactment); Alan J.
31
Cornblatt, P.A. v. Barow, 153 N.J. 218, 232, 236 (1998) (finding
amendment covering “causes of action which occur on or after the
effective date” applicable to conduct, not claims, occurring
after enactment).
Further, where the Legislature has failed to “define or
specify when a cause of action shall be deemed to have accrued
within the meaning of [a] statute,” the courts will exercise
their “proper judicial function” to determine when the cause of
action accrues for that class of cases. Fernandi v. Strully, 35
N.J. 434, 449 (1961) (citations omitted). Making such a
decision “is to establish a general rule of law for a class of
cases, which . . . must be founded on reason and justice.”
Ibid. (quoting 1 Wood on Limitations § 122a, at 685-86 (4th ed.
1916)). As described above, tying the accrual of a cause of
action to when the right to institute a suit arises is
reasonable, fair, and based on long-standing practice.
In contrast, the accrual dates of an insurer’s right to PIP
reimbursement suggested by Johnson, that is, when GEICO filed
its third-party claim or when EZ Quick’s liability was
established by settlement, represent events which the original
and amended versions of N.J.S.A. 39:6A-9.1 eschewed. The
accrual dates offered by Johnson are contrary to the explicit
language of N.J.S.A. 39:6A-9.1(a), which provides that the right
accrues when the injured party files a claim for PIP benefits.
32
Johnson had filed his claim and received all PIP benefits to
which he was entitled by August 20, 2010, months before the
effective date of the 2011 amendment. As of that time, GEICO’s
right to reimbursement had accrued and the amount of
reimbursement was known. As in James, supra, “the new law did
not retroactively alter . . . claims that arose before the
legislation took effect.” 216 N.J. at 556. Johnson submits no
legal authority to support departure from the express terms of
the statute.
VI.
We decline to address Johnson’s argument that this case
should be governed by the PIP policy agreement. This issue was
not raised before the trial or appellate courts, and we “will
consider matters not properly raised below only if the issue is
one ‘of sufficient public concern.’” Cornblatt, supra, 153 N.J.
at 230 (quoting State v. Churchdale Leasing, Inc., 115 N.J. 83,
100 (1989)). The significance of Johnson’s argument, however,
is limited to the case at hand. Moreover, the record on this
issue is incomplete -- the full policy agreement has not been
provided to the Court -- making its resolution now all the more
inappropriate. Ibid. (citations omitted).
VII.
In sum, we conclude that the 2011 amendment to N.J.S.A.
39:6A-9.1 does not expressly or implicitly present any of the
33
factors needed to rebut the presumption of prospective
application. Because the 2011 amendment altered settled law, we
would expect to find an unequivocal statement that it was to be
applied retroactively. Moreover, at the time when the policy
was issued, when Johnson was injured, and when he filed his PIP
claim, both parties expected GEICO to have a primary right to
reimbursement.
To be sure, prospective application of the 2011 amendment
diminishes Johnson’s recovery. Applying the 2011 amendment
retroactively, however, would be contrary to established law and
would upend the expectations of PIP providers before enactment
of the amendment. The same would be true were we to rule in
Johnson’s favor on the basis that GEICO’s claim did not accrue
when Johnson filed for PIP benefits. That too would create a
rule untethered to settled law.
VIII.
The judgment of the Appellate Division is affirmed.
CHIEF JUSTICE RABNER, and JUSTICES LaVECCHIA, PATTERSON,
and SOLOMON, join in JUDGE CUFF’s opinion. JUSTICE ALBIN filed
a separate, dissenting opinion. JUSTICE FERNANDEZ-VINA did not
participate.
34
SUPREME COURT OF NEW JERSEY
A-33 September Term 2014
075044
KARON K. JOHNSON,
Plaintiff-Appellant,
v.
ROSELLE EZ QUICK LLC, L & J
LIQUOR & DELI, HARSHIRA
PATEL, SURESH PATEL, GREGORY
PARISI, INTREPID
INVESTIGATIONS,
Defendants,
and
GEICO INSURANCE COMPANY,
Defendant-Respondent,
and
GEICO INSURANCE COMPANY,
Third-Party Plaintiff,
v.
ONE BEACON INSURANCE and THE
CAMDEN FIRE INSURANCE
ASSOCIATON,
Third-Party Defendants.
JUSTICE ALBIN, dissenting.
Plaintiff Karon Johnson suffered catastrophic injuries in
an automobile accident that rendered him a paraplegic. GEICO
paid $250,000 in personal injury protection (PIP) benefits
1
toward plaintiff’s medical expenses because he was covered by
his mother’s automobile insurance policy. After the accident,
the Legislature amended N.J.S.A. 39:6A-9.1 to ensure that an
insurance carrier is not reimbursed PIP payments from a
settlement or damages award that has not made the insured whole.
The majority’s tortured interpretation of the effective date of
the amendment to N.J.S.A. 39:6A-9.1 allows GEICO reimbursement
of its PIP payments from plaintiff’s settlement with the
tortfeasors -- even though doing so will reduce the available
financial resources to pay plaintiff’s medical expenses and
other future needs. By extending the reach of the old statute,
the majority perpetuates the very injustice the amended statute
was intended to eliminate. I therefore respectfully dissent.
I.
A.
In 2011, plaintiff filed a dram shop lawsuit against the
captioned defendants, including a liquor store for allegedly
selling him alcohol before the accident.5 At the time, plaintiff
had not reached the statutory age to purchase alcohol.
Defendants settled the lawsuit with plaintiff, agreeing to pay
the $1,000,000 limit of their insurance policies. The
1 Defendants included a number of individuals and entities:
Roselle EZ Quick, LLC, L & J Liquor & Deli, Harshira Patel,
Suresh Patel, Gregory Parisi, and Intrepid Investigations.
2
settlement award was allocated in the following manner:
$483,970.10 was placed in a special-needs trust for plaintiff;
$251,449.90 was paid to plaintiff’s attorneys; and $264,580 was
deposited with the court pending the outcome of GEICO’s claim
for reimbursement of PIP benefits paid to plaintiff.
Despite having received premium payments for the PIP policy
on the covered vehicle,6 GEICO sought reimbursement of PIP
benefits paid to plaintiff to make itself whole at the expense
of its insured. Plaintiff suffered permanent injuries in the
accident and will incur expenses far in excess of the settlement
monies over his lifetime. In short, GEICO wanted to deduct from
plaintiff’s settlement $264,580 -- representing $250,000 of PIP
benefits plus interest -- funds necessary for plaintiff’s
medical expenses and long-term care.
In 2011, the Legislature amended N.J.S.A. 39:6A-9.1 to
reverse the consequences of the decision in Fernandez v.
Nationwide Mutual Fire Insurance (Fernandez I), 402 N.J. Super.
166 (App. Div. 2008), aff’d by an equally divided court, 199
N.J. 591 (2009) (per curiam). Sponsor’s Statement to S. No. 191
(2010); S. Commerce Comm., Statement to S. No. 191 (2010);
Assemb. Fin. Inst. & Ins. Comm., Statement to S. No. 191 (2010).
Fernandez I, supra, which was affirmed due to a three-three
2 Plaintiff was covered under his mother’s insurance policy.
3
split on the Supreme Court, held that “[a] PIP carrier who has
paid PIP benefits to an insured is entitled to reimbursement of
those benefits from the insurance proceeds of the third-party
tortfeasor, pursuant to N.J.S.A. 39:6A-9.1, even when the amount
of the tortfeasor’s insurance is insufficient to make the
insured whole.” 402 N.J. Super. at 176.7
Justice Long, in a dissent joined by two members of the
Court, stated that “the Legislature intended the carrier to be
reimbursed for its PIP payments only to the extent that the
proceeds of the tortfeasor’s policy exceed the full amount of
the insured’s damages for all claims.” Fernandez v. Nationwide
Mut. Fire Ins. (Fernandez II), 199 N.J. 591, 594 (2009) (Long,
J., dissenting). By passing the 2011 amendment, the Legislature
effectively adopted Justice Long’s interpretation of N.J.S.A.
39:6A-9.1. The purpose of the amendment was to prevent a
repetition of Fernandez I -- to make certain that the PIP
carrier does not receive priority over its insured when the
insured is not made whole by a settlement or a damages award.
See Sponsor’s Statement to S. No. 191 (2010) (stating that
purpose of amendment was to “reverse” outcome of Fernandez I,
3 The pre-amendment version of N.J.S.A. 39:6A-9.1 provided that
“[a]n insurer . . . paying benefits pursuant to . . . personal
injury protection benefits . . . as a result of an accident
occurring within this State, shall . . . have the right to
recover the amount of payments from” certain tortfeasors. See
L. 2003, c. 89.
4
which held that under pre-amended statute “the claim of an
insurer which has paid PIP benefits has priority over the claim
of that insurer’s insured who seeks recovery from the
tortfeasor’s liability insurance for unpaid medical expenses,
pain, suffering, or other damages caused by the accident”); S.
Commerce Comm., Statement to S. No. 191 (2010) (same); Assemb.
Fin. Inst. & Ins. Comm., Statement to S. No. 191 (2010) (same).
The amended version of N.J.S.A. 39:6A-9.1(b) provides that
“[a]ny recovery by an insurer . . . pursuant to this subsection
shall be 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 Legislature instructed that the amendment “shall take effect
immediately.” L. 2011, c. 11. The Legislature thus made clear
that, after the effective date of the amendment, a PIP carrier
should not be reimbursed at the expense of its insured.
The amended statute, if applied prospectively in the
circumstances of this case, leads to but one reasonable
conclusion -- that the Legislature did not intend plaintiff’s
financial recovery to be sacrificed so that GEICO could be
reimbursed PIP benefits paid to plaintiff. A review of the
timeline of events demonstrates this point. On August 20, 2010,
GEICO paid PIP benefits in the amount of $250,000 to plaintiff.
5
As of that date, GEICO had a right to reimbursement from the
tortfeasor’s insurance company under N.J.S.A. 39:6A-9.1. On
January 28, 2011, the amendment to N.J.S.A. 39:6A-9.1 went into
effect, ensuring that a PIP carrier could not secure
reimbursement from the tortfeasor’s insurance company if doing
so would leave the PIP carrier’s insured with unpaid medical
expenses or other unpaid damages. On June 10, 2011, plaintiff
sued defendant tortfeasors, including the liquor store that sold
him alcohol. Almost a year after the amendment went into
effect, GEICO cross-claimed against the liquor store and the
liquor store’s insurers for reimbursement.
The amended statute went into effect before GEICO submitted
its reimbursement claim. Under the newly enacted statute, GEICO
had no vested right to a PIP reimbursement from an injured
insured not made whole by his tortfeasors. See Farmers Mut.
Fire Ins. Co. of Salem v. N.J. Prop.-Liab. Ins. Guar. Ass’n, 215
N.J. 522, 547 (2013) (PLIGA). GEICO, an insurance company in a
highly regulated industry, had “no ‘contractual expectation’
that a naturally fluid regulatory scheme, ‘subject to change at
any time,’ [would] remain in an unalterably fixed state.” Ibid.
(citing State Farm Mut. Auto. Ins. Co. v. State, 124 N.J. 32,
64-65 (1991)).
That point was made clear in State Farm. There, the
Legislature passed a law establishing the Joint Underwriting
6
Association (JUA) for the purpose of underwriting insurance
policies issued to high-risk drivers. State Farm, supra, 124
N.J. at 40-41. The Legislature explicitly stated that carriers
were not responsible for the liabilities incurred by the JUA.
Id. at 41. When the JUA became heavily indebted, the
Legislature recognized that the regulatory scheme was not
functioning as intended. Id. at 42-43. The Legislature enacted
a new law taxing insurers to pay off the JUA’s debt. Id. at 43-
44. We rejected the insurers’ claims that the Legislature was
not authorized to impose a tax on carriers for matters that had
accrued under the earlier scheme. See id. at 64-65. We
explained that “[t]he JUA was simply a regulatory scheme for the
insurance of high-risk drivers; like all regulatory schemes, it
was potentially transient, subject to change at any time by the
Legislature that had created it.” Id. at 64. We noted that
“[i]n a highly regulated business such as insurance,
participants cannot credibly assert that they [have] any vested
right or contractual expectation in the indefinite continuance”
of a particular regulatory scheme. Id. at 64-65.
Under the principles set forth in PLIGA and State Farm,
GEICO understood that the Legislature was authorized to put in
place a new scheme, regardless of the accrual date of
plaintiff’s claim.
B.
7
The manifest objective of the amended statute, based on the
statute’s language, effective date, and legislative history, was
to immediately implement the new law to avoid the shortchanging
of another injured insured. Yet, the majority has produced a
judicial framework -- at odds with the legislative one -- that
delays the effective date of the statute, rendering plaintiff’s
rights under the amended statute a nullity. The majority’s
mistaken interpretation has real-life consequences for
plaintiff, who is now denied the necessary financial resources
to address his permanent injuries.
The issue is not about whether the amended statute should
be retroactively applied; it should not. Rather, the issue is
when the prospective application of that statute commences. The
majority posits that GEICO’s right to reimbursement accrued when
it paid plaintiff PIP benefits, six months before the amended
statute went to effect. Although the majority is correct about
the accrual date, the amended statute subjected GEICO’s right to
reimbursement to the insured being made whole. As mentioned
earlier, the amended statute went into effect before GEICO made
a reimbursement claim. The accrual date did not give GEICO a
vested right to a PIP reimbursement claim against its insured
after passage of the amended statute.
Nothing in the amended statute suggests that the
Legislature intended that, after the law’s effective date, a PIP
8
carrier would be able to file a reimbursement claim that would
strip an insured of PIP benefits already paid to defray medical
expenses. The Legislature could not have intended for another
paraplegic or seriously injured insured to suffer under the pre-
amendment statute while the PIP carrier was made whole. Indeed,
the PIP carrier here, GEICO, has received a windfall because
plaintiff’s mother dutifully paid premiums for the very benefits
that the majority has withdrawn from her son.
In the end, the majority has failed to give the amended
statute the true prospective effect intended by the Legislature
and therefore allows one further injustice under the old
statute.
II.
For the reasons expressed, I respectfully dissent.
9