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Court Rules That Plaintiff Unable To Seek PIP Coverage For Unpaid Medical Expenses Under Policies Issued By Insurance Companies To Tortfeasor’s Resident Relatives

By on December 6, 2019 in Claims with 0 Comments

Plaintiff Raymond Nesby was injured in an automobile accident when his car was struck from behind by the vehicle driven by defendant Sheryl Fleurmond, whose vehicle was owned by defendant Chris Decaro and insured by Progressive Garden State Insurance Company.  Fleurmond did not own a vehicle nor have her own automobile insurance policy.  However, she lived with her mother and sister who were insured by Geico and AAA MAIC (AAA Mid-Atlantic Insurance Company), respectively.  Neither vehicle, however, was involved in the accident.  The issue in the published decision of Nesby v. Fleurmond, 2019 N.J. Super. LEXIS 162 (App. Div. November 18, 2019) was whether the plaintiff, who had a limited $15,000 PIP coverage but incurred $400,000 in medical bills, could recover the remainder of his medical bills from the two insurance policies issued to the defendant Fleurmond’s relatives.

After the plaintiff’s $15,000 personal injury protection benefits were exhausted, the rest of his medical bills were paid by his personal health insurance company.  He tendered his bodily injury claim to Progressive (the defendant Decaro’s carrier), which offered him the full $25,000 policy limit.

The plaintiff accepted that offer and signed a release, which released both Fleurmond and Decaro from any and all claims, actions, causes of actions, which in any way resulted from the automobile accident.

Sometime before signing the release, plaintiff’s counsel sent what he described as a “Longworth letter” to Geico and AAA MAIC, notifying the carriers of Progressive’s offer.  Although neither carrier objected to the proposed settlement, both later denied coverage.

Thereafter, plaintiff filed a law suit against Fleurmond and Decaro, seeking damages for injuries he suffered in the accident.  Although he did not specifically name Geico or AAA MAIC as defendants, the Fourth Count of his Complaint sought to compel insurance coverage from both carriers.  Prior to beginning discovery, the plaintiff moved for a declaratory judgment against Geico and AAA MAIC, seeking coverage under the policies issued to Fleurmond’s sister or mother.  Geico and AAA MAIC cross-moved for the same relief. 

The trial court judge found that plaintiff had settled his claims with Fleurmond and Decaro and had no relationship with Geico and AAA MAIC, which would otherwise entitle him to coverage under their policies.  Because plaintiff was not seeking underinsured motorist coverage from these insurance carriers, the trial court judge found that the Longworth case was inapplicable and distinguishable from the facts of this case.

On appeal, the plaintiff argued that he was entitled to PIP coverage and bodily injury benefits under the Geico and AAA MAIC policies.  The Appellate Division disagreed.

Starting with the plaintiff’s claim for PIP coverage under the policies, the Court noted that plaintiff was not an insured under the Geico or AAA MAIC policies, did not live with either insured and was not driving a vehicle insured under either policy.  Thus, he did not fall under any category which might entitle him to PIP benefits under either of these policies.

Further, the Appellate Division noted that New Jersey does not permit “stacking” of policies for PIP benefits.  To the contrary, N.J.S.A. 39:6A-4.2 expressly prohibits an insured from recovering PIP benefits from multiple policies.

Further, the Appellate Division pointed out that the plaintiff settled his claims with Fleurmond and Decaro and fully released both of them (the tortfeasor and the owner of the vehicle) from any and all claims arising from the accident.  The Court noted that where a release’s language refers to “any and all claims,” courts do not generally permit exceptions.  Because the release did not preserve plaintiff’s right to proceed against either Geico or AAA MAIC, the Appellate Division found that he could not continue to litigate his settled claims against the insurers. 

As to the plaintiff’s reliance upon Longworth, the Appellate Division noted that such reliance was “misplaced.”  The Longworth case pertains only to protecting the UIM carrier’s subrogation interest.  However, the plaintiff acknowledged that he was not seeking UIM coverage from either Geico or AAA MAIC.  Thus, any reservation of rights under Longworth provided him no relief.

To the contrary, the plaintiff was seeking excess insurance under the Geico and AAA MAIC policies.  However, the Appellate Division found that the plaintiff had released the tortfeasor without a reservation of rights clause protecting his claims against those insurers.            

In summary, the Appellate Division found that the plaintiff was not a named insured under the Geico or AAA MAIC policies.  He did not reside with the named insureds, did not occupy a vehicle insured under those policies and released the tortfeasor from any and all claims arising from the accident.  Thus, the Court ruled that his claims against these insurers failed.  Hence, the Appellate Division affirmed the trial court decision, dismissing the claims against both Geico and AAA MAIC.

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Betsy G. Ramos

About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 25 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

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