SIDOTI CHIROPRACTIC CENTER v. PRUDENTIAL INSURANCE COMPANY

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6277-04T36277-04T3

SIDOTI CHIROPRACTIC CENTER

a/s/o ELENA SANCHEZ,

Plaintiff-Appellant,

v.

PRUDENTIAL INSURANCE COMPANY

k/n/a HIGH POINT INSURANCE

COMPANY,

Defendant-Respondent.

________________________________________________________________

 

Submitted March 21, 2006 - Decided April 3, 2006

Before Judges Kestin and Lefelt.

On appeal from the Superior Court of

New Jersey, Law Division, Passaic

County, Docket No. L-528-05.

Joseph A. Massood, attorney for

appellant.

Zimmerer, Murray & Conyngham,

attorneys for respondent (Kevin

J. Conyngham, of counsel; James

Falcicchio, on the brief).

PER CURIAM

This appeal, by Sidoti Chiropractic Center as the assignee of plaintiff Elena Sanchez, presents two issues: (1) whether Judge Graziano correctly found Sanchez ineligible for extended medical expense (med-pay) benefits coverage under Sanchez's automobile insurance policy, and (2) whether disputes regarding med-pay coverage are subject to Personal Injury Protection (PIP) benefits arbitration. Because we find Sanchez ineligible for med-pay under her insurance policy and affirm Judge Graziano on that basis, the arbitration issue becomes moot.

Sanchez was involved in an automobile accident while operating a school bus for her employer, Station Wagon Services, Inc. At the time of her accident, Sanchez owned two personal automobiles, both insured by defendant, Prudential General Insurance Company of New Jersey. Sanchez received treatment from Sidoti Chiropractic Center; and Sidoti, thereafter, as Sanchez's assignee, sought PIP benefits from Prudential to cover the medical services it had rendered to Sanchez.

Prudential refused PIP benefits because the automobile Sanchez was operating at the time she was injured was a "commercial vehicle" and not "a private passenger automobile." In addition, Prudential advised Sidoti that med-pay, though provided in Sanchez's policy, was excluded because she was "entitled to benefits for the bodily injury under" workers' compensation. Sanchez's policy specifically excluded med-pay "for bodily injury to any eligible injured person: a. who is entitled to benefits for the bodily injury under: 1. Personal Injury Protection Coverage; or 2. any Worker's Compensation law; or Medicare provided under federal law."

After receiving Prudential's disclaimer, Sidoti demanded, received, and engaged in arbitration with the American Arbitration Association. The arbitrator found Prudential "correct in its assertion that the commercial use of the vehicle in question at the time of the loss precluded PIP coverage." The arbitrator went on to state, however, that "it would appear that Claimant is correct in its position that med-pay exists to cover the Injured Party's losses in the within matter." But the arbitrator believed that Prudential could not be directed to provide med-pay because "such a directive would exceed the jurisdiction of the within forum, which is limited to determinations relative to PIP benefits." The arbitrator concluded by denying PIP benefits.

Following the arbitration decision, Sidoti sought a declaratory judgment in the Law Division to "modify or in the alternative to confirm the arbitration award so as to allow for the payment of the outstanding bills under the Med-Pay endorsement of the subject policy." Specifically, Sidoti sought a judgment confirming med-pay benefits, declaring that the arbitrator has jurisdiction to decide med-pay claims, or vacating the arbitration award denying PIP benefits.

Both parties subsequently moved for summary judgment, and Judge Graziano granted Prudential's motion and denied Sidoti's, dismissing the complaint. The judge found the exclusionary language in Sanchez's policy precluded med-pay benefits and chose not to address Sidoti's argument that the arbitrator had jurisdiction to decide disputes regarding med-pay benefits. We agree completely with Judge Graziano.

"PIP benefits are generally limited to accidents involving an 'automobile' as defined by N.J.S.A. 39:6A-2." Warnig v. Atlantic County Special Servs., 363 N.J. Super. 563, 567 (App. Div. 2003). Given that Sanchez was injured in a commercial school bus, there is no serious contention in this appeal that Sanchez was eligible for PIP benefits.

For accidents "not otherwise qualifying for PIP medical expense benefits," the New Jersey Administrative Code, 11:3-7.3(b), mandates that some medical expense benefits be provided. Ibid. Under this rule, all automobile insurance policies must "include excess medical payments coverage [med-pay], corresponding to Section II, Extended Medical Benefits Coverage of the personal automobile policy." N.J.A.C. 11:3-7.3(b); Warnig, supra, 363 N.J. Super. at 568.

Med-pay benefits provide "a very narrow window of coverage to a limited class of persons who [] are ineligible for . . . PIP benefits." Ingersoll v. Aetna Cas. & Sur. Co., 138 N.J. 236, 240 (1994). Med-pay benefits are designed to mitigate "the medical-expense disaster that can befall those injured by use of a 'highway vehicle' (as distinguished from an automobile)[.]" Ibid.

Here, however, Sanchez's insurance policy excludes med-pay coverage whenever the insured is eligible for workers' compensation, PIP, or Medicare benefits. Obviously, an injured driver who can obtain medical treatment through PIP, workers' compensation, or Medicare should not suffer "the medical-expense disaster" that med-pay benefits were designed to mitigate. Ibid.

"Absent statutory prohibitions, an insurance company has the right to impose whatever conditions it desires prior to assuming its obligations and such provisions should be construed in accordance with the language used." Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960) (citing Schneider v. New Amsterdam Cas. Co., 22 N.J. Super. 238, 243 (App. Div. 1952)). While exclusionary clauses are "strictly construed against the insurer," courts "should not ignore the clear meaning and intent of exclusion provisions." Stafford v. T.H.E. Ins. Co., 309 N.J. Super. 97, 103-04 (App. Div. 1996) (citing Schmidt v. Smith, 294 N.J. Super. 569, 582 (App. Div. 1996), aff'd, 155 N.J. 44 (1998), and Scarfi v. Aetna Cas. & Sur. Co., 233 N.J. Super. 509, 514 (App. Div. 1989)).

In this case, we see no reasons that would preclude enforcement of the specific exclusion in question. Contrary to the arbitrator, Warnig, supra, 363 N.J. Super. 563, is neither on "all fours with" nor supportive of Sidoti's position. There is no indication in Warnig that the insurance policy in issue contained any exclusion similar to the one in Sanchez's policy. In any event and for whatever reason, Prudential in that case paid med-pay benefits. The precise question we confronted was "whether an insurer who pays benefits to its insured pursuant to [med-pay] may be reimbursed for this payment in a workers' compensation proceeding pursuant to N.J.S.A. 39:6A-6," the PIP collateral source rule. Id. at 565. In Warnig, we affirmed the compensation judge's ruling "that the insurer could not be reimbursed because the statute did not apply to Med-Pay benefits." Ibid.

Here, Sanchez was working for her employer and operating a school bus owned by the employer at the time of her accident. There is no contention that Sanchez was ineligible for workers' compensation benefits. Even though she has not filed a workers' compensation claim for this accident, her eligibility for such benefits renders applicable the exclusionary clause found in her policy.

Though the carrier's obligation to pay PIP benefits may be primary with regard to workers' compensation, Speiser v. Harleysville Ins. Co., 237 N.J. Super. 507, 510 (App. Div.), certif. denied, 121 N.J. 647 (1990), this obligation provides no solace to Sidoti who, as Sanchez's assignee, was not eligible for PIP benefits and was subject to a valid policy exclusion for med-pay. When the exclusion is "specific, plain, clear, prominent, and not contrary to public policy," as is the one in this case, it will be enforced. Maimone v. Liberty Mut. Ins. Co., 302 N.J. Super. 299, 305 (App. Div. 1997), certif. denied, 154 N.J. 610 (1998), (quoting Doto v. Russo, 140 N.J. 544, 559 (1995)).

Accordingly, Judge Graziano correctly found that Prudential is not obligated to provide med-pay benefits to Sanchez or her assignee Sidoti. Furthermore, our decision, affirming Judge Graziano's determination that med-pay benefits are not required, renders unnecessary or moot any decision on the arbitration jurisdiction question advanced by Sidoti.

Affirmed.

 

Prudential is now known as High Point Insurance Company. For ease of reference in this opinion, we continue to refer to the company as Prudential.

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A-6277-04T3

April 3, 2006