Is PIP Reimbursement Arbitration Mandatory for a Self-Insured in New Jersey?

An appellate court in New Jersey says that it is. In Liberty Mut. Ins. Co. v. Penske Truck Leasing, Co., CEVA Freight, LLC, and Michael Kika, a recently published decision, the Appellate Division ruled that a self-insured must submit to mandatory arbitration in regard to a PIP reimbursement claim. An arbitrator, not a court, will decide whether the self-insured was negligent and must reimburse the PIP carrier. The decision is important because it is the first such published opinion.

In our post of June 17, 2019, we explained that a PIP-paying insurance carrier has a statutory right of direct reimbursement from a negligent motorist – a “tortfeasor” – not by way of subrogation, but through negotiation or arbitration. In Liberty Mutual, the court reiterated that statutory right and held that CEVA Freight, Inc., a self-insured trucker, is required to arbitrate the issue of whether its employee, Michael Kika, was negligent – thus a tortfeasor – in the operation of CEVA’s truck. If so, CEVA must reimburse Liberty Mutual.

Michael Kika, CEVA’s truck driver, allegedly caused a collision on Route 9 in Monmouth County, New Jersey, by blocking the roadway while attempting to back into a customer’s lot. Eugene Jerinsky, Liberty’s insured, struck the CEVA trailer while operating his pick-up truck. The police investigation and report raise some factual issues of possible fault on Jerinsky’s part. Liberty Mutul made a claim against CEVA for its PIP payments for Jerinsky, and CEVA denied the claim. Liberty sued to compel arbitration, and lost in the lower court. Liberty appealed.

The Appellate Division sided with Liberty. The court reviewed the history and case law regarding the New Jersey No Fault Law, and determined that its clear wording compelled that the issue of CEVA’s liability must be submitted to arbitration. CEVA’s status as a self-insured trucker does not change the conclusion. The Appellate Division endorsed the wording of Liberty’s position that –

. . . CEVA is required to arbitrate the issue of whether Kika was negligent and, therefore, a “tortfeasor,” to determine whether Liberty is “legally entitled” [another statutory phrase] to reimbursement of PIP benefits paid on behalf of Jerinsky

Unless overruled by the New Jersey Supreme Court or the Legislature, the Liberty Mutual decision will now require self-insured commercial vehicle operators to submit to arbitration of PIP carriers’ reimbursement claims.

On This Date in SCOTUS History – June 13

photo by Jennifer Enberg

​In 1966, the landmark case of Miranda v. State of Arizona, 384 U.S. 436 (1966), was decided.  The 5-4 majority held that a person in custody must be informed of his right to counsel before and during questioning, and the right to not self-incriminate.  It further held that the suspect must not only understand these rights but, should the suspect choose to waive these rights, that it be done voluntarily.  While most are familiar with the case of Miranda v. Arizona, which gave rise to the term “Miranda rights,” did you know that three additional cases fell under this SCOTUS ruling?  Westover v. United States, Vignera v. New York, and California v. Stewart, had been consolidated with Miranda.


In 1967, Thurgood Marshall was nominated to the Court by President Johnson. He was confirmed on August 30, 1967, by a vote of 69-11, becoming the first African American to serve as an Associate Justice.  Justice Marshall, himself, won 29 out of the 32 cases he argued before the Supreme Court, the most famous being Brown v. Board of Education of Topeka, 347 U.S. 483 (1954).

Supreme Court Resolves Maritime Product Duty-to-Warn Issue

The United States Supreme Court is the final arbiter of the Maritime Law, a unique and large body of federal common law, tempered by any controlling Congressional enactments. So, in recently decided Air & Liquid Sys. Corp. v. DeVries, the Court addressed the scope of the duty of a marine product manufacturer to warn of a potential harm from a part that is required to be incorporated into its product. Here, the part to be added contained asbestos, and it allegedly led to the deaths of two Navy sailors. Their families sued the manufacturer of pumps, blowers, and turbines, but not the manufacturer of the asbestos-containing added part that actually caused the harm. The Supreme Court sided with the families.

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Care, Custody, or Control, Water Damage Exclusion, Dominate Recent New Jersey Insurance Decisions

Mix a safe, a blowtorch, and $4,000,000 in pearls, and you have a dandy insurance coverage fight. Companion Trading Company, a New York business, purchased a safe from Mega Security Company, in New Jersey. Companion used the safe to store semi-precious jewelry, including pearls at its New York location. For some reason the safe door became immovable, and Companion called Mega in to investigate. Mega’s technician could not open the door, and so arranged to ship the safe back to New Jersey for further work. Over several days Mega employees and an outside technician worked on the safe in vain at Mega’s headquarters. Finally, they opened the safe by using a blowtorch. When Companion got it back and checked the contents, they saw that a valuable cache of pearls had been damaged.

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Forum Selection Clause Alive and Well in the Second Circuit

by John C. Lane

This case involves an on-line retailer, E-Commerce China, and the plan of its majority shareholders to buy out the minority owners in a “going private merger.” The company is incorporated in the Cayman Islands. The minority shareholders brought suit in Manhattan federal court, urging that the purchase price was below market value and grossly unfair. The defendants moved to dismiss on the ground of forum non conveniens, claiming that the case should properly be brought in the Cayman Islands, the company’s home of incorporation.

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