New Jersey car accident victims cannot recover future medical expenses in a personal injury trial if the expenses do not exceed the state’s $250,000 no-fault personal injury protection (PIP) coverage limit, the New Jersey Supreme Court has ruled in a unanimous opinion.
The ruling came in a case where future medical expenses under $250,000 were presented to a jury and included in a jury award despite the state’s no-fault law that says expenses that come in under the limit are inadmissible in a personal injury trial.
The court explained that the no-fault law seeks to prevent a double recovery. Even though they have not yet been paid, the future medical expenses will be legally due and “collectible” as PIP benefits and thus they should not be included in a jury award.
The high court upheld an Appellate Division ruling overturning a trial court that had allowed the jury to consider the future expenses in its award.
Also, the appeals court and high court opinions make it clear that the no-fault law’s inadmissibility rule not only applies to PIP claims under personal auto policies, but also to claims by an injured party covered by the state’s Unsatisfied Claim and Judgment Fund (UCJF).
In August 2016, Lakita Murray was injured when she was a passenger in Christopher Punina’s car when it collided with a car driven by Anthony Marrone. Punina’s car was uninsured, and neither Murray nor any member of her family or household insured a car. Consequently, in December 2016, Murray applied for PIP benefits from the UCJF which helps those who incur losses due to uninsured drivers. The fund approved her PIP application, entitling her to medical expense benefits up to the legal limit of $250,000. The cost of the medical treatment she underwent prior to trial did not exceed the limits of her PIP coverage.
Murray filed a personal injury complaint against both drivers involved in the collision. She filed an offer of judgment for $50,000, but defendant Marrone did not accept it. That rejection became an issue because rejecting a reasonable settlement offer and proceeding to trial can lead to penalties under the “offer of judgment” rule. If the final judgment is 80% or less of the offer, a party may be held responsible for the legal costs, interest, and attorney fees incurred after the offer was rejected
Murray’s medical expert estimated that her future medical expenses would be between $42,000 and $160,000. The medical expenses were characterized as “future medical expenses” because Murray had planned to but had not yet undergone the recommended surgeries.
The jury awarded Murray $250,000 in non-economic damages and $100,000 in damages for future medical expenses. The judgment against Marrone was for $50,000 and $20,000, respectively, plus pre-judgment interests and costs. Also, pursuant to the offer of judgment rule that penalizes a defendant for not accepting a reasonable offer, the trial court awarded Murray an additional $44,107.
Marrone moved for judgment notwithstanding the verdict (JNOV), contending that Murray’s future medical expenses were inadmissible. He relied on the undisputed facts that Murray was eligible for $250,000 in PIP benefits; those benefits had not been exhausted as of the time of trial; and the projected future medical expenses would not exhaust the remainder of the PIP benefits available to her. The trial judge denied the JNOV motion.
Marrone appealed to the Appellate Division on the basis that Murray’s future medical expenses should not have been presented to the jury and should not have been included in the jury award, given the inadmissibility rule.
The appellate court agreed with Marrone, finding that evidence of Murray’s future medical expenses was inadmissible because those expenses were “collectible” under the no-fault law. Because it found that the future medical expenses should have been excluded, the appellate court also modified the judgment against Marrone to exclude the additional award under the offer of judgment rule. Reading the UCJF statute together with the no-fault act, the Appellate Division determined that the inadmissibility provision applies to the UCJF.
The high court affirmed that Appellate Division opinion.
Murray had argued that the UCJF is not expressly mentioned in the text of the statute and thus her expenses are not subject the no-fault law’s inadmissibility rule. But even if the rule applies to UCIF, she added, her future medical expenses are admissible because they were unpaid.
In rejecting Murray’s reasoning, the high court said the plain text and legislative history of the no-fault law confirm that the legislature clearly intended to distinguish between medical expenses that are payable by applicable PIP benefits and those that are not. The law says medical expenses are inadmissible in a civil trial as damages against a tortfeasor if they are “collectible or paid.” Medical expenses that are covered by applicable PIP limits are “collectible” because they are eligible to be paid when incurred. Notably, medical expense benefits may be “unpaid” but still “collectible” — for example, projected medical expenses that have not yet been incurred are not “paid” but remain eligible for payment.
Conversely, the ruling notes that uncompensated medical expenses that are not covered by applicable PIP limits are admissible against a liable party. These amounts are neither “collectible” (as they are uncovered and not legally due), nor “paid” (as they are uncompensated).
Also, the court noted that the UCJF statute plainly states that it applies when PIP benefits under the no-fault act would be payable. The court said the UCJF is intended “to provide the kind of protection a liability insurance policy would provide” so that individuals who sustain losses inflicted by uninsured drivers are not left remediless. Thus, the fund provides for recovery of PIP benefits.
According to the high court, if the no-fault law did not apply to UCJF PIP benefits, UCJF claimants would be entitled to greater recovery: they could recover both from PIP and from the tortfeasor, whereas those covered by no-fault PIP benefits could recover only from PIP.
“UCJF claimants are entitled to protection equivalent to that provided by a liability insurance policy — no more, no less,” the court declared.
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