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Tuesday, August 12, 2008

Sebastian Fernandez v. Nationwide Mutual Fire

08-12-08 Sebastian Fernandez v. Nationwide Mutual Fire
Insurance Company

The issue presented on appeal is whether a PIP carrier's
right to reimbursement for paid PIP benefits, pursuant to
N.J.S.A. 39:6A-9.1, has priority over an insured's right to be
made whole where the tortfeasor's insurance does not fully cover
the insured's personal injury damages. We concluded that the
decisions of Knox v. Lincoln Gen. Ins. Co., 304 N.J. Super. 431
(App. Div. 1997) and IFA Ins. Co. v. Waitt, 270 N.J. Super. 621
(App. Div.), certif. denied, 136 N.J. 295 (1994) are not in
conflict, but rather address different issues under the PIP
reimbursement statute. We determined that the issue presented
is controlled by Knox and held: that where a PIP carrier has
paid benefits to its insured, it is entitled to reimbursement of
those benefits from the insurance proceeds of a third-party
tortfeasor, pursuant to N.J.S.A. 39:6A-9.1, even if the limits
of the tortfeasor's insurance policy are insufficient to make
the insured whole.