APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. (D.C. Civ. No. 92-06206).
Before: Mansmann, Nygaard, and Weis, Circuit Judges.
In this appeal, we decide that a Pennsylvania policy holder seeking additional medical expense reimbursement under her policy by virtue of a New Jersey "deemer" statute is bound by its time limits for making claims. Because the district court ruled that the insured could rely on the longer Pennsylvania statute of limitations in a suit on the policy seeking "deemer" benefits, we will reverse the judgment in favor of the insured.
Plaintiff Ann DiOrio is a Pennsylvania resident who was injured while driving her automobile in New Jersey on January 26, 1988. At the time of the accident, she was insured under an automobile liability policy written in Pennsylvania by defendant Nationwide Mutual Insurance Company. Included in the policy was a provision entitling her to a maximum payment of $10,000 for medical expenses incurred as a result of the January 1988 accident. Nationwide paid the $10,000 to DiOrio, the last payment being made on January 3, 1990.
DiOrio filed a negligence suit in the federal court in New Jersey against the driver and the owner of the other vehicle involved in the collision. DiOrio's complaint included a claim for her medical expenses attributable to the accident. That court decided that, because of the New Jersey "deemer" statute, N.J. Stat. Ann. § 17:28-1.4 (West Supp. 1993), Nationwide became obligated to pay DiOrio's medical expenses and that reimbursement was not limited to the $10,000 stated in her policy. That being so, the court ruled that under New Jersey law, DiOrio could not pursue her claims for medical expenses against the driver and the owner of the other vehicle. See D'Orio v. West Jersey Health Systems, 797 F. Supp. 371 (D.N.J. 1992).
DiOrio then filed this breach of contract diversity action against Nationwide in the United States District Court for the Eastern District of Pennsylvania on October 28, 1992, seeking reimbursement for her medical expenses of approximately $100,000. Nationwide responded to DiOrio's suit by asserting that the controlling New Jersey statute of limitations had run because more than two years had elapsed since the last payment of benefits.
The district court determined that because the policy had been issued in Pennsylvania, the four-year statute of limitations of that state applied, rather than the more restrictive period specified in the New Jersey statute. Accordingly, the court rejected Nationwide's contention that the statute of limitations had expired and entered judgment for DiOrio in the amount of $101,475.29. Nationwide has appealed.
The sole issue before us is whether the district court erred in applying the Pennsylvania statute of limitations in this action for breach of contract. The parties have structured their arguments around issues of conflict of laws, as affected by when and where DiOrio's claim accrued, and Pennsylvania's borrowing statute, but we think that a more simple and direct approach yields the correct solution.
The New Jersey "deemer" statute provides that insurance policies written in another state by an insurer authorized to transact business in New Jersey must include
"coverage to satisfy at least the . . . personal injury protection benefits coverage pursuant to [N.J. Stat. Ann. § 39:6A-4] . . . whenever the automobile or motor vehicle insured under the policy is used or operated in [New Jersey].
Any liability insurance policy subject to this section shall be construed as ...