N.J. Legislature Reverses N.J. Supreme Court PIP Decision

State Senate and Assembly send Bill to Governor Christie 

NJ car accident victims

Did the NJ Legislature make the right decision?

The Bill (S-191) specifies  that a recovery by an insurer, health maintenance organization or governmental agency shall be subject to any claim against the tortfeasor’s insurance company by the injured party, and shall be paid only after satisfaction of the accident victim’s claim, up to the limits of the insured tortfeasor’s motor vehicle or other liability insurance policy.”

NJ Legislature responds to Fernandez v. Nationwide Mutual Fire Insurance Co., 199 N.J. 591 (2009)

Sebastian Fernandez was injured when his vehicle was struck by a semitrailer owned by Go Pro Waste Services of Hawthorne and driven by a company employee.

Fernandez received $250,000 in PIP benefits from his carrier, Nationwide Mutual. In April 2004, he sued Go Pro, insured by Proformance Insurance Co., for his economic and non-economic damages (pain and suffering, disability, loss of enjoyment of life, etc.).  In July 2004, Nationwide filed a subrogation claim against Proformance for reimbursement of the $250,000 paid to Mr. Fernandez in PIP benefits, and sought arbitration.

Fernandez settled with Proformance for $1 million, but the carrier paid him only $750,000 and deposited the remainder with the court, pending the outcome of the arbitration.

Fernandez objected and filed a separate action. Hudson County Superior Court Judge John O’Shaughnessy ruled that Nationwide could recover from the Proformance policy only if excess funds were available after Fernandez’s recovery (emphasis added).

But Appellate Division Judges William Gilroy, Anthony Parrillo and Linda Baxter reversed, holding that a PIP carrier should be reimbursed even if the injured plaintiff is not made whole.

A year later, the Supreme Court affirmed in the 3-3 vote with one recusal, which meant the appellate ruling stood.

The Appellate Division’s decision correctly held that the insurer of the responsible party, and not the injured victim’s insurer, was liable for the expense of PIP benefits for the victim,” the Court said in it’s per curiam opinion.

Simply because that conclusion diminishes the total amount available to the victim from the tortfeasor’s policy of insurance does not produce an unjust result. Rather, that conclusion advances stability in the insurance marketplace by requiring that the ultimate cost of PIP benefits be borne by the insurer of the responsible party, not by the insurer of the victim,” the Court continued.


I want to disclose my bias before thrashing the Fernadez decision. I am a true blue, life long, dyed in the polyester, plaintiff’s lawyer.  I care deeply about the rights of accident victims; and I fully appreciate the value to the insurance industry of marketplace stability.

This is wonderful news for victims of accidents involving automobiles and commercial vehicles. New Jersey affords PIP carriers the privilege of recovering PIP payments from insured commercial vehicles. The unanswered question was, who gets paid first, the PIP carrier or the accident victim?

In Fernandez, the N.J. Supreme Court weighed in on the side of Insurance companies, by affording priority to PIP carriers; under the harsh view that stability in the insurance marketplace is more important than the right of an accident victim to be fully compensated for his injuries. Hey, accident victim, so what if you lost your leg. Stand in line, and hopefully there will be some money left over for you.

Kudos to both houses of the N.J. Legislature for doing  the right thing, and passing legislation to reverse this heartless decision.

nj car accident victim

Please comment. Your opinion matters

What do you think? Who should be first in line, the accident victim or the PIP carrier?

[Thanks to the NJ Law Journal for the information for this article]


About Lawrence "Larry" Berezin

I retired from the private practice of law after a 35-year legal career and fight parking tickets for people like you and me. I love sharing valuable information and beating NYC parking tickets for the driving community in NYC


  1. Old Case, Good Law, Does Away with “Serious Life Impact” in Oswin v. Shaw | The Personal Injury Blog - March 6, 2011

    […] Did the Supreme Court guess right? The N.J. Supremes must have been right on the money with this decision, or the NJ legislature would have revised AICRA. The Supremes and the Legislature have little difficulty correcting each other’s “mistakes.” […]

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