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Government Employees Insurance Co. v. Allstate Insurance Co.3/25/2003
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 22, 2003
The deemer statute, N.J.S.A. 17:28-1.4, mandates that some automobile insurance companies include within their out of-state issued policies certain New Jersey automobile insurance coverages. Government Employees Insurance Company (GEICO), a company not authorized to transact any insurance business in New Jersey, relying on a 1998 amendment to the deemer statute, contends that it is subject to the statute as an affiliate of an insurance company that is authorized to transact some forms of insurance business in New Jersey. If GEICO is subject to the deemer statute under the 1998 amendment and therefore must provide personal injury protection(PIP) coverage for its out-of-state insureds, then GEICO maintains that it need not reimburse Allstate Insurance Company, under N.J.S.A. 39:6A-9.1, for Allstate's payment of PIP benefits to its insureds for injuries sustained in New Jersey accidents with GEICO insured tortfeasors. GEICO appeals from Judge Pisansky's declaratory judgment, concluding that GEICO is not covered by the 1998 amendment to the deemer statute and not exempted from reimbursing Allstate under the PIP reimbursement statute. We agree with the trial judge's conclusion and therefore affirm the declaratory judgment.
I.
We begin by summarizing the pertinent facts and procedural history. While Allstate is authorized to underwrite all types of insurance in New Jersey, GEICO is a Maryland Corporation underwriting private-passenger automobile insurance in every state except New Jersey and Massachusetts. GEICO withdrew from the New Jersey automobile insurance market around 1976. In 1996, GEICO was acquired by Berkshire-Hathaway Corporation. Berkshire also owns stock in a number of other companies including 82% of Central States Indemnity Company of Omaha (Central States), which is authorized to transact certain limited forms of non-automobile and non-motor vehicle insurance in New Jersey, including accident, health, credit and economic security insurance. The record does not reflect whether Central States is authorized to write automobile insurance policies in any state, and there are no ties between GEICO and Central States except for the common ownership of stock in both companies by Berkshire.
In 1998 and 1999, three New Jersey accidents involving vehicles insured by Allstate were allegedly caused by GEICO out-of-state insureds. In each of these three accidents, Allstate paid PIP benefits to eligible persons under N.J.S.A. 39:6A-4. Allstate then sought reimbursement from GEICO under N.J.S.A. 39:6A-9.1. Allstate's reimbursement theory was that GEICO was not required to provide PIP coverage for its out-of state insureds and therefore was responsible to Allstate under the reimbursement statute. Allstate currently has over fifty pending claims of this type against GEICO.
GEICO contends that it is obligated to provide PIP benefits based on a 1998 amendment to the deemer statute and its affiliation with Central States and has, in fact, provided PIP benefits in accordance with the amendment since its effective date on January 19, 1998. Because all of the accidents for which Allstate seeks reimbursement occurred after the deemer statute amendment's effective date, GEICO refused to submit to arbitration.
Following a number of similar attempts by Allstate to obtain PIP benefit reimbursement, GEICO filed a declaratory judgment action seeking to establish its right not to reimburse Allstate. After GEICO moved for summary judgment, the motion judge denied the motion and interpreted the deemer statute to require"a company authorized to transact auto
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