Amicus Committee Update
NASP’s Amicus Committee and its StateNet Sub-Committee are working hard to educate our members about court decisions impacting subrogation efforts and identifying pending legislation that might impact recovery efforts.
SUBROGATION LEGISLATION
NASP Opposes New Jersey Senate Bill 191/Assembly Bill 793
An anti-subrogation bill recently swept through New Jersey’s Assembly and Senate, receiving the requisite number of votes. The bill was presented to the Governor for his signature. Governor Christie did not sign the bill. However, the bill became law after forty-five (45) days of “no action” being taken.
The New Jersey law amends “Statute 39:6A-9.1 Recovery from Tortfeasor,” by adding the following language:
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.
Two main issues are apparent in the bill. First, the amended language appears to give priority to the personal injury victim before the medical benefits provider, whether they are an insurer, HMO or governmental agency. Second, the amendment limits the responsibility of the tortfeasor up to the limits of his/her liability policy.
As we have seen repeatedly, the law lacks clarity and precision. First and foremost the “made whole” or priority language is confusing. The subrogation provider shall only be paid after the injured party’s claim is “satisfied.” This standard is subjective as opposed to objective. It is anticipated there will be many questions as to when an injured party is “satisfied.” Additionally, the law limits the responsible party’s payment to the limits of their liability policy. The result is to discourage one from purchasing large limits or even sufficient limits of liability coverage.
NASP wrote a letter to the Governor of New Jersey in opposition to this bill. The Governor’s Office contacted NASP’s Executive Director, Leslie Wiernik, and Daran Kiefer, Amicus Co-Chair, to gain information on subrogation and the effects of this bill. Although NASP was able to provide beneficial information regarding subrogation and the public policy reasons that favor allowing subrogation, the bill had the momentum to become new law.
AMICUS BRIEFS
The Amicus Committee has been extremely busy and filed two briefs in January 2011. Both briefs addressed the importance of subrogation and the public policy advantages emanating from subrogation. The Amicus briefs were filed in the Commonwealth of Pennsylvania.
I. Jones v. Nationwide
The first brief was in the case of Jones v. Nationwide on appeal to the Supreme Court of Pennsylvania, Docket No. 61 EAP 2010. The brief addressed pro rating deductibles in accordance with Pennsylvania Insurance Regulation, 31 Pa.Code, Section 146.8(c). Appellant (Jones) argues she was not reimbursed her full deductible, or rather “made whole,” by Nationwide. Jones carried a five-hundred dollar ($500.00) collision deductible on her automobile insurance policy. Nationwide reimbursed Jones four-hundred and fifty dollars ($450.00) from the subrogation recovery. In addition to the above “made whole” argument, Jones advocates (1) the Insurance Commissioner does not have authority to promulgate an insurance regulation allowing pro ration of deductibles and (2) the Insurance Regulation is void because it violates the common law “made whole” doctrine.
II. State Farm a/s/o Lenoir v. Soxman
The second brief was filed in the case, State Farm a/s/o Lenoir v. Soxman, on appeal to the Superior Court of Pennsylvania. Mr. Lenoir was insured for PIP benefits with State Farm Mutual Automobile Insurance Company through a policy written and executed in the state of Delaware. Mr. Lenoir was involved in an auto accident in Pennsylvania with a Pennsylvania licensed driver. State Farm subrogated for Delaware PIP payments in a Pennsylvania court. Soxman argued the subrogation claim was barred in accordance with Pennsylvania law, 75 P.C.S., Section 1720.
The appeal addresses three issues: (1) a Pennsylvania “made whole” issue, (2) an interpretation of a Pennsylvania subrogation restriction and (3) a conflict of laws.
We will keep you informed on the results of these two appeals in Pennsylvania.
NASP owes a special thanks to William Sylianteng of Bennett, Bricklin & Saltzburg, LLC for his time and effort in writing and filing the Jones brief. Regis Moeller with Poerio & Walter volunteered his time and effort to write and file the brief in Soxman. NASP is appreciative to both attorneys for their dedication and efforts in addressing these important subrogation issues.
Kammy Poff
NASP Amicus Committee Co-Chair
Comments