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The New Jersey Supreme Court has ruled in a 3-2 decision that motorists who opt for the $15,000 insurance minimum in personal injury protection, or PIP benefits, cannot recover medical expenses exceeding that amount.

The justices found no evidence that the Legislature, when it amended the Automobile Insurance Cost Reduction Act to allow motorists to elect smaller amounts of medical coverage, intended to depart from the first-party PIP system. To rule otherwise would be a return to fault-based suits consisting solely of economic damages claims for medical expenses in excess of an elected, lesser level of PIP coverage, which is not what lawmakers intended, the court said. The ruling reversed an Appellate Division decision that allowed plaintiffs in auto accident cases to  recover medical expenses exceeding their $15,000 PIP.

The ruling stems from two consolidated automobile injury cases. In the first, Joshua Haines, while driving his father's car, was struck by a car driven by Jacob Taft in 2011. Haines had no health insurance, and he claims that creditors are pursuing him for $28,000 in unpaid medical bills that remain after exhausting the $15,000 PIP plan in his father's auto insurance policy.

The second case involves Tuwona Little, whose car was rear-ended by Jayne Nishimura's car in 2016. Little was left with $10,488 in medical bills after exhausting her $15,000 PIP coverage.

Haines and Little each filed personal injury claims. In each case, the record indicated the plaintiffs' medical expenses were not subjected to any detailed review to determine if they were reasonable and necessary, the justices said. A trial court ruled against the plaintiffs in each case and prohibited them from admitting evidence of their medical expenses exceeding their $15,000 limits.

Haines and Little each appealed. The Appellate Division reversed both trial court rulings. The panel ruled that admission of medical expenses above an individual's PIP policy limit, but below the $250,000 PIP ceiling, was not barred by the statute governing PIP coverage.

Discussing the Legislature's lengthy efforts to reduce the cost of auto insurance while still providing benefits to those who need them, the Supreme Court noted that in 1990 lawmakers moved from unlimited PIP coverage to a $250,000 ceiling. The Legislature created options for coverage as low as $15,000 in exchange for lower premiums in 1998.

But the Appellate Division's interpretation of the statute to allow admission of medical expenses that fall between the insured's policy limit and the $250,000 ceiling “transgresses the overall legislative design of the No-Fault Law to reduce court congestion, lower the cost of automobile insurance, and most importantly, avoid fault-based suits in a no-fault system,” Justice Jaynee LaVecchia wrote for the court.

Based on evidence of a legislative effort in the No-Fault Law to avoid fault-based suits over medical expenses, the justices could not conclude that the Legislature intended its statute to allow fault-based suits for economic damage claims for medical expenses in excess of an elected, lesser amount of PIP coverage, LaVecchia wrote.

“The extensive efforts to subject medical utilization and associated costs to careful review and control through AICRA's extensive regulatory programs and, to a lesser degree, its fraud prevention methods, would be undercut by the ability of a third party to sue for medical expenses above their PIP policy coverage limit but below the presumptive amount of $250,000,” LaVecchia wrote.

Chief Justice Stuart Rabner and Justice Lee Solomon joined LaVecchia's opinion. Justice Barry Albin issued a dissenting opinion, joined by Judge Jose Fuentes of the Appellate Division, who was temporarily assigned. Justices Anne Patterson, Faustino Fernandez-Vina and Walter Timpone did not participate.

Albin, in his dissent, said the impact of the majority's ruling would be “devastating” and “catastrophic” to low-income accident victims who cannot afford higher coverage.

“Because of their financial circumstances, those insureds are denied access to the courts to recover their uncompensated medical expenses from the wrongdoers who caused their injuries. Some automobile injury victims and their families may be bowed by crushing debt; others may be bankrupted. The message from the majority opinion is that the innocent insured must bear the financial burden caused by the irresponsible wrongdoer.”

Albin called on the Legislature to address the inequity created by the ruling.

Appellants Taft and Nishimura were represented by Michael Marone of McElroy, Deutsch, Mulvaney & Carpenter in Morristown. Calling the ruling “a victory for the public,” he said it “upholds the legislative intent that underpins the no-fault system in New Jersey. The no-fault system was always intended to protect the insured public by containing the cost of insurance and limiting the number of lawsuits.”

Vincent Campo of Malamut & Associates in Cherry Hill, who represented Haines, and Jeffrey Thiel of Petrillo & Goldberg in Pennsauken, representing Little, did not respond to a reporter's calls about the ruling.