Update on New Jersey Supreme Court’s Decision in Haines v. Taft
Aug 14, 2019 - News by Defense Counsel
In our April 2, 2019 article, “New Jersey Supreme Court Rules Claimant Cannot Recover Economic Loss For Difference in Coverage When Electing Lower PIP Coverage,” we reported on the New Jersey Supreme Court’s March 26, 2019 ruling in Haines v. Taft, 237 NJ 271, that plaintiffs were barred from recovering against a tortfeasor the amount of unpaid medical bills in excess of their PIP coverage limits.
The court based its decision upon a review of the legislative history regarding the collateral source statute, NJSA 39:6A-12, which bars plaintiffs from recovering from a tortfeasor medical bills which were “paid or payable” by PIP coverage. The third paragraph of the section provides, however, that “nothing in this section shall be construed to limit the right of recovery against the tortfeasor of uncompensated economic loss sustained by the injured party.”
The Appellate Division relied upon that paragraph of the statute in ruling that the plaintiffs were entitled to claim as damages against the tortfeasor the amount of unpaid medical bills in excess of the plaintiffs’ PIP coverage limits. The New Jersey Supreme Court reversed the Appellate Division and held that there was no evidence that the legislature intended in the last paragraph of Section 12 to allow recovery of unpaid medical bills in excess of PIP coverage when it amended the statutory scheme to allow insureds to elect less than the standard $250,000 PIP coverage limit, and that unless the legislature made such an intent clearly known, the court would not assume that such a change was intended.
The NJ Supreme Court explained, however, that it would “look for greater guidance from the legislative branch.” It noted that the interpretation given to Section 12 by the Appellative Division panel must, in its view, abide a time when the legislature has more clearly indicated its intention. “We invite the legislature to make its intention to introduce fault-based suits into the no-fault medical reimbursement scheme more explicit.”
The New Jersey Legislature quickly took the New Jersey Supreme Court up on its challenge, passing the second of two bills seeking to overturn the Supreme Court’s decision in Haines v. Taft on June 20, 2019.
The Senate bill, S-2432, would permit plaintiffs to recover all uncompensated/unpaid medical bills in excess of the plaintiff’s PIP coverage limits. That bill, if signed into law, would take effect immediately, would apply to all pending and future lawsuits, and would not have any cost-containment measures.
The Assembly bill, A-5639, would apply only to future lawsuits arising out of car accidents occurring on or after August 1, 2019, and would provide that all such claims for unpaid medical expenses would be subject to the New Jersey PIP Fee Schedule amounts. That bill would additionally permit a successful claimant in a suit involving only claims for medical bills (where non-economic claims are barred by the verbal threshold) to recover attorneys fees and costs.
As of the publication of this article, both bills are on Governor Murphy’s desk, awaiting his signature.