21ST CENTURY PINNACLE INSURANCE COMPANY v. A.C. WINGS, LLC

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.



                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-4801-16T3

21ST CENTURY PINNACLE
INSURANCE COMPANY,

        Plaintiff-Respondent,

v.

A.C. WINGS, LLC, d/b/a HOOTERS
RESTAURANT and ALLIED WORLD
ASSURANCE COMPANY,

     Defendants-Appellants.
______________________________

              Submitted February 7, 2018 – Decided March 13, 2018

              Before Judges Nugent, Currier, and Geiger.

              On appeal from Superior Court of New Jersey,
              Law Division, Atlantic County, Docket No.
              L-1062-15.

              Marks, O'Neill, O'Brien, Doherty & Kelly, PC,
              attorneys for appellant Allied World Assurance
              Company (Melissa J. Brown and Nicole M.
              Triner, on the briefs).

              Law Offices of Steven G. Kraus, attorneys for
              respondent (Sandra S. Grossman, on the brief).

PER CURIAM

        Plaintiff,      21st    Century      Pinnacle     Insurance      Company,

instituted suit against defendants, A.C. Wings, LLC, d/b/a Hooters
Restaurant   and   Allied    World   Assurance    Company,   seeking

reimbursement of personal injury protection (PIP) benefits under


N.J.S.A. 39:6A-9.1 (Section 9.1), that it paid to its insureds for

injuries sustained in a motor vehicle accident.   Plaintiff alleged

that the accident was caused by a driver who had become intoxicated

while a patron at Hooters.    After discovery, plaintiff's motion

to compel arbitration under Section 9.1 was granted.     Defendants

appealed. We affirm the trial court's June 23, 2017 order granting

plaintiff's application and compelling arbitration.

     
N.J.S.A. 39:6A-9.1 creates a statutory right of reimbursement

for PIP insurers against certain tortfeasors by allowing an insurer

who pays PIP benefits to:

          recover the amount of payments from any
          tortfeasor who was not, at the time of
          the accident, required to maintain personal
          injury protection or medical expense benefits
          coverage, other than for pedestrians, under
          the laws of this State . . . . In the case
          of an accident occurring in this State
          involving    an   insured    tortfeasor,   the
          determination as to whether an insurer . . .
          is legally entitled to recover the amount of
          payments and the amount of recovery, including
          the costs of processing benefit claims and
          enforcing rights granted under this section,
          shall be made against the insurer of the
          tortfeasor, and shall be by agreement of the
          involved parties or, upon failing to agree, by
          arbitration.
          [N.J.S.A. 39:6A-9.1.]




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      This provision helps promote an important "goal of the No-

Fault Law[,]" which "is to avoid excessive litigation related to

accidents and insurance."          Unsatisfied Claim & Judgment Fund Bd.

v.   N.J.   Mfrs.    Ins.   Co.,   
138 N.J.   185,    205   (1994).    "[T]he

reimbursement       right   conferred    by   section   9.1   encompasses    all

tortfeasors that are not subject to the No-Fault law[,]" and was

intended to alleviate the court system of reimbursement litigation

by requiring claims to be arbitrated.            State Farm Mut. Auto. Ins.

Co. v. Licensed Beverage Ins. Exch., 
146 N.J. 1, 14-15 (1996).

      Defendants argue that the statute is inapplicable to them as

they are not "tortfeasors" as contemplated by the statute.                  They

rely on AAA Mid-Atlantic Ins. of N.J v. Prudential Prop. & Cas.

Ins. Co., 
336 N.J. Super. 71, 76 (App. Div. 2000), in contending

that the trial court should retain jurisdiction to determine all

of the legal issues in the matter.            We disagree.

      In AAA Mid-Atlantic Ins. of N.J., Prudential argued that all

legal issues were to be resolved through the statutorily mandated

arbitration provision under Section 9.1.            Id. at 76.     AAA invoked

a statutory immunity from liability as its insureds were social

hosts under 
N.J.S.A. 2A:15-5.7.          Id. at 75.      If the insureds were

immune, they asserted they could not be tortfeasors under Section

9.1, and Prudential would have no legal entitlement to recovery.

Ibid.   We invoked our original jurisdiction under Rule 2:10-5 and

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resolved the issue, finding that since the parents were statutorily

immune from liability for injuries suffered by their son resulting

from alcoholic beverages they served him, "the son's PIP carrier

[could] not seek direct reimbursement because [the parents were]

not 'tortfeasors' under [Section] 9.1."      Id. at 78.

      The   circumstances   here       are   easily   distinguishable.

Allied insured Hooters. Plaintiff alleges that a patron of Hooters

was negligently served alcohol.    The patron's intoxication was the

cause of a motor vehicle accident in which plaintiff's insureds

were injured and killed.     Plaintiff seeks reimbursement from

defendants of the PIP benefits it paid to its insureds.        Hooters

is a "tortfeasor" potentially responsible for reimbursing PIP

benefits paid by a private passenger automobile carrier to its

insureds because of the restaurant's negligence.          The issue is

whether there is sufficient evidence to prove that Hooters was

negligent under the New Jersey Licensed Alcoholic Beverage Server

Fair Liability Act (Dram Shop Act), 
N.J.S.A. 2A:22A-1 to -7.       That

is a question of fact for the arbitrator.

     Were we to find otherwise, the Law Division would first have

to adjudicate the factual dispute as to whether           Hooters was

negligent under the Dram Shop Act and therefore a tortfeasor, a

proceeding that could well involve a trial.      This would undermine

the statutory scheme by creating an extra and potentially lengthy

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step in the process.       The statute does not envision the court

first resolving the liability issue in a plenary proceeding.                The

statutory arbitration provisions were designed to avoid such a

process,   and   the   motion   judge       correctly   mandated   defendants'

participation in the arbitration proceeding.

    Affirmed.




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