MATTSON et al v. AETNA LIFE INSURANCE CO. et al

Filing 39

OPINION. Signed by Judge Joseph E. Irenas on 8/31/2015. (TH, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

JOAN MATTSON and ERIC MATTSON,
individually and as a class
representative on behalf of
others similarly situated

HONORABLE JOSEPH E. IRENAS
CIVIL ACTION NO. 14-6809
(JEI/KMW)

Plaintiffs,
v.

OPINION

AETNA LIFE INSURANCE CO. D/B/A
AETNA, INC., THE RAWLINGS
COMPANY, LLC D/B/A/ THE
RAWLINGS GROUP, S.N.J. REGIONAL
EMPLOYEE BENEFIT FUN, COOPER
UNIVERSITY HEALTH CARE D/B/A
COOPER UNIVERSITY HOSPITAL and
D/B/A COOPER
HOSPITAL/UNIVERSITTY MEDICAL
CENTER and D/B/A COOPER
UNIVERSITY PHYSICIANS, and JOHN
DOE INDIVIDUALS and BUSINESS 120,
Defendants.
APPEARANCES:
LAW OFFICE OF LEWIS ADLER
By: Lewis G. Adler, Esq.
26 Newton Avenue
Woodbury, New Jersey 08096
Counsel for Plaintiffs
LOWEY DANNENBERG COHEN & HART PC
By: Uriel Rabinowitz, Esq.
One North Broadway, Suite 590
White Plains, NY 10601
Counsel for Defendants Aetna Life Insurance Co. and
The Rawlings Company
BROWN & CONNERY, LLP
By: Karen A. McGuinness, Esq.
360 Haddon Avenue
1 

PO Box 539
Westmont, NJ 08108
Counsel for Defendant S.N.J. Regional Employee Benefit
Fund
MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN, PC
By: Dante C. Rohr, Esq.
Woodland Falls Corporate Park
200 Lake Drive East, Suite 300
Cherry Hill, NJ 08002
Counsel for Defendant Cooper University Health Care

IRENAS, Senior United States District Judge:
Plaintiffs Joan Mattson and her son, Eric Mattson, bring
this putative class action against Defendants Aetna Life
Insurance Co. (“Aetna”), The Rawlings Company, LLC (“Rawlings”),
Southern New Jersey Regional Employee Benefit Fund (the “Fund”),
and Cooper University Health Care (“Cooper”), based on the Fund,
acting through Aetna and Rawlings, seeking allegedly
impermissible subrogation for medical expenses paid as a result
of injuries Eric Mattson sustained in a motor vehicle accident.
Pending before the Court are two Rule 12(b)(6) motions to
dismiss filed by Aetna and Rawlings, and the Fund.
For the reasons stated herein, Defendants’ motions will be
GRANTED.

I.

BACKGROUND

The Court recites the following relevant facts alleged in
Plaintiffs’ Amended Complaint:

2

Joan Mattson is a New Jersey resident and employee of the
Gateway Regional High School (“Gateway”).
20)

(Amend. Compl. ¶¶ 5,

The Fund is a joint insurance fund formed pursuant to

N.J.S.A. 40A:10-36 for the purpose of providing health care
benefits to individuals enrolled with the Fund’s members.
at ¶ 8)

(Id.

Gateway is a member of the Fund and, being a Gateway

Employee, Ms. Mattson participates in the health benefits plan
offered through the Fund.

(Id. at ¶¶ 18, 20)

Eric Mattson, Ms.

Mattson’s son, is enrolled under the Fund’s health benefits plan
as his mother’s dependent.

(Id. at ¶ 21)

Defendant Aetna administers the Fund’s health benefits
pursuant to a contract with the Fund.

(Id. at ¶ 7)

Defendant

Rawlings, pursuant to a contract with Aetna, provides Aetna with
insurance claims recovery services.

(Id. at ¶ 22)

On or about December 13, 2012, Eric Mattson was involved in
a motor vehicle accident in New Jersey and suffered severe
injuries.

(Id. at ¶ 29)

He received treatment at Cooper and

Ms. Mattson submitted Eric’s medical bills to Aetna for payment.
(Id. at ¶¶ 30, 33)
Plaintiffs allege that Cooper, a participating provider
with Aetna, improperly demanded payment from Plaintiffs of
certain hospital bills when Cooper’s agreement with Aetna
explicitly provides that Cooper bill Aetna only for such
charges.

(Id. at ¶ 39)

First, Cooper sent Plaintiffs a
3

statement in June 2013 requesting $3,036.00.
Ex. 2 to Amend. Compl.)

(Cooper Statement,

Then, in August 2013, a debt collector

acting on Cooper’s behalf sent Plaintiffs a letter stating that
Eric owed Cooper over $70,000.

(Cooper Demand Ltr., Ex. 6 to

Amend. Compl.)
In addition to the demands from Cooper, Eric received a
letter from Rawlings dated July 18, 2013, informing him that his
health plan’s claim would need to be paid “from any settlement
or payment you may receive from another party and/or your own
insurance company.”
Amend. Compl.)

(July 18, 2014, Rawlings Ltr., Ex. 3 to

The letter instructed Eric “to make sufficient

allowances to satisfy the health plan’s claim in any settlement”
he might receive.

(Id.)

Two weeks later, Rawlings sent another letter to Eric’s
personal injury attorney with “notice that [Aetna] has a
claim/lien for medical benefits paid on behalf of” Eric.
1, 2013, Rawlings Ltr., Ex. 4 to Amend. Compl.)

(Aug.

The letter

continued as follows:
This claim/lien applies to any amount now due or which
may hereafter become payable out of a recovery collected
or to be collected, whether by judgment, settlement, or
compromise, from any party hereby notified.
No
settlement of any claim should be made prior to notifying
our office of the potential settlement and reaching an
agreement for satisfaction of [Aetna’s] interest.
(Id.)

4

Plaintiffs then commenced this action in the Superior Court
of New Jersey, Law Division, Gloucester County, in September
2014.

In the Complaint, Plaintiffs alleged that the lien/claims

asserted by Rawlings on behalf of Aetna and the Fund violated
New Jersey laws that prohibit subrogation of health plan
benefits, and brought counts under the New Jersey Civil Rights
Act (“CRA”), New Jersey Consumer Fraud Act (“CFA”), and New
Jersey Truth-in-Consumer Contract Warranty and Notice Act
(“TCCWNA”).

Specifically, the Complaint cited to (1) N.J.S.A. §

2A:15-97, the New Jersey Collateral Source Statute (“NJCSS”),
and (2) N.J.S.A. § 39:6A-9.1, a provision of the Automobile
Insurance Cost Reduction Act (“AICRA”) governing recovery of
personal injury protection benefits from a tortfeasor.
¶¶ 38-40)

(Compl.

Plaintiffs also brought a number of claims resulting

from Cooper’s allegedly improper billing statement.
Defendants removed to this Court on October 30, 2014, and
subsequently filed initial motions to dismiss the Complaint.
their motions, as one argument against the NJCSS’s
applicability, Defendants Aetna and Rawlings noted that
Plaintiffs had not yet even instituted a separate civil tort
action against the alleged tortfeasor involved in the motor
vehicle accident.
On November 10, 2014, Eric filed a motor vehicle bodily
injury complaint in the Gloucester County Superior Court.
5

In

(Amend. Compl. ¶ 44)

In that complaint, Eric brings a count for

negligence against the alleged tortfeasor, and a count against
his own automobile insurance company for allegedly withheld
Personal Injury Protection (“PIP”), Uninsured Motorist (“UM”),
and Underinsured Motorist (“UIM”) benefits.
Complaint, Ex. 7 to Amend. Compl.)

(Motor Vehicle

Plaintiffs thereafter sought

leave to file an Amended Complaint in the instant case, which,
with the Court’s permission, they filed on December 31, 2014.
The lengthy Amended Complaint asserts the following counts:
(1) violation of the TCCWNA against Rawlings and Aetna; (2)
violation of the CRA, against the Fund; (3) breach of contract
against Aetna and the Fund; (4) violation of the covenant of
good faith and fair dealing, against Aetna and the Fund; (5)
promissory estoppel, against Aetna and the Fund; (6) violation
of the CFA, against Rawlings and Aetna; (7) breach of contract,
against Cooper; (8) violation of the covenant of good faith and
fair dealing, against Cooper; (9) promissory estoppel, against
Cooper; (10) violation of the CFA, against Cooper; and (11)
declaratory judgment against Aetna.

Counts 3, 4, 5, 7, 8, 9,

10, and 11 all concern Cooper’s allegedly improper collection of
charges from Plaintiffs.

Counts 1, 2, and 6 each concern the

Fund’s, Aetna’s and Rawlings’s allegedly improper subrogation
activity.

The Fund, Aetna, and Rawlings subsequently filed the

instant motions to dismiss.
6

On March 26, 2015, Plaintiffs settled with and voluntarily
dismissed their claims against Cooper.

In their opposition

papers, Plaintiffs concede that their only remaining causes of
action concern subrogation activity, specifically (1) Aetna and
Rawlings’s alleged TCWWNA violation (Count 1), (2) the Fund’s
alleged CRA violation (Count 2), and (3) Aetna and Rawlings’s
alleged CFA violation (Count 6).

During oral argument, which

the Court held on August 25, 2015, Plaintiffs confirmed that all
other counts in the Amended Complaint are moot.

II.

Motion to Dismiss Standard

Federal Rule of Civil Procedure 12(b)(6) provides that a
court may dismiss a complaint “for failure to state a claim upon
which relief can be granted.”

In order to survive a motion to

dismiss, a complaint must allege facts that make a right to
relief more than speculative.

Bell Atlantic Corp. v. Twombly,

550 U.S. 544, 555 (2007); see also Fed. R. Civ. P. 8(a)(2).

A

court must accept all allegations in the plaintiff’s complaint
as true, viewing them in the light most favorable to the
plaintiff, Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d
Cir. 2008), but a court is not required to accept sweeping legal
conclusions cast as factual allegations.

Morse v. Lower Merion

Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997).

The pleadings

must state facts sufficient to show that the legal allegations
7

are not simply possible, but plausible.
234.

Phillips, 515 F.3d at

“A claim has facial plausibility when the plaintiff pleads

factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

III.

Discussion

At the outset, based on the voluntary dismissal of
Defendant Cooper, the Court will dismiss Counts 3, 4, 5, 7, 8,
9, 10, and 11 from the Amended Complaint as moot.

Remaining are

Plaintiffs’ CRA claim against the Fund, and Plaintiffs’ CFA and
TCCWNA claims against Aetna and Rawlings.
The relevant issues on Defendants’ motions to dismiss can
be distilled as follows: (1) was the Fund, acting through Aetna
and Rawlings, prohibited from seeking subrogation for medical
expenses paid as a result of Eric Mattson’s motor vehicle
accident from any judgment, settlement, or other award in
Plaintiffs’ pending action against the tortfeasor; (2) if yes,
have Plaintiffs otherwise pled facts sufficient to support their
CRA, CFA and TCCWNA claims; and (3) regardless the claims’
viability, whether Plaintiffs were required to pursue
administrative remedies prior to filing the instant lawsuit.

8

The Court will first discuss the whether the relevant
statutes apply to the instant case and then address the merits
of Plaintiffs’ particular causes of action.
A. Statutory Schemes
Plaintiffs allege that two New Jersey statutes prohibited
Defendants from seeking subrogation for Eric’s medical expenses
– N.J.S.A. 2A:15-97 (the New Jersey Collateral Source Statute)
and N.J.S.A. 39:6A-9.1 (the AICRA statute governing recovery of
personal injury protection benefits from a tortfeasor in motor
vehicle accident cases).
1. The Collateral Source Statute
The NJCSS provides:
In any civil action brought for personal injury or death,
except actions brought pursuant to the provisions of
P.L.1972, c. 70 (C. 39:6A-1 et seq.), if a plaintiff
receives or is entitled to receive benefits for the
injuries allegedly incurred from any other source other
than a joint tortfeasor, the benefits, other than
workers' compensation benefits or the proceeds from a
life insurance policy, shall be disclosed to the court
and the amount thereof which duplicates any benefit
contained in the award shall be deducted from any award
recovered by the plaintiff, less any premium paid to an
insurer directly by the plaintiff or by any member of
the plaintiff's family on behalf of the plaintiff for
the policy period during which the benefits are payable.
Any party to the action shall be permitted to introduce
evidence regarding any of the matters described in this
act.
N.J.S.A. 2A:15-97.
The New Jersey Supreme Court has held that the NJCSS does
not allow health insurers to recoup funds expended on behalf of
9

an insured through subrogation or reimbursement when the insured
recovers a judgment against a tortfeasor.
169 N.J. 399, 403 (2001).

Perreira v. Rediger,

The Perreira court explained as

follows:
Allowing health insurers to recover funds expended
pursuant to an insurance contract either by way of
subrogation or contract reimbursement would reallocate
the
benefit
accorded
by
N.J.S.A.
2A:15-97
in
contravention of the underlying legislative intent.
Accordingly, we hold such recovery to be interdicted by
the statutory scheme.
Id.

Reviewing the legislative history, the Supreme Court stated

that the purposes of the statute – disallowing double recovery
to plaintiffs and containing spiraling insurance costs – could
have been accomplished in two ways: benefit[ting] health
insurers by allowing repayment of costs expended on a tort
plaintiff, or . . . benefit[ting] liability carriers by reducing
the tort judgment by the amount of health care benefits
received.”
latter.

Id. at 410.

The Legislature ultimately chose the

Id. at 411.

The Court stated further that when regulations promulgated
by the Commissioner of Banking and Insurance authorize
subrogation and reimbursement provisions in health insurance
contracts, those regulations “must be interpreted narrowly as
limited to cases in which the collateral source rule does not
apply, for example, a case in which choice of law principles

10

require application of the law of a jurisdiction with a
collateral source rule at variance from our own.”

Id. at 416.

The Appellate Division later considered whether the same
rule applied when the health benefits provider was a public
entity.

See Cnty. of Bergen Emp. Benefit Plan v. Horizon Blue

Cross Blue Shield of N.J., ACS, 412 N.J. Super. 126 (App. Div.
2010).

County of Bergen concerned a health benefit plan

established pursuant to N.J.S.A. 40A:10-6(e), which delineates
when a “governing body of any local unit may establish an
insurance fund.”

Id. at 129.

The issue was whether the NJCSS

barred that plan from recouping funds expended on an insured’s
behalf through subrogation or contract reimbursement after the
insured settled a separate civil action against a tortfeasor.
Id. at 131.
Extending Perreira, the Appellate Division found “no
evidence to suggest that the Legislature intended to favor
public entities under [the NJCSS] or that it was not intended to
apply to amounts received by a tort plaintiff from public
sources.”

Id. at 138.

The statute, by its own terms, drew “no

distinction between a publicly-funded payment source and a
private, for-profit health insurer.”

Id.

Defendants argue that the NJCSS does not pertain to this
case for a number of reasons: (1) the NJCSS does not apply to
the Fund, which is not an insurance entity, but a publicly11

funded “joint insurance fund”; (2) the regulations governing the
Fund require that the Fund include a subrogation provision in
its bylaws; and (3) by its own terms, the NJCSS does not apply
to civil actions brought pursuant to N.J.S.A. 39:6A-1, et seq.,
and Plaintiffs’ pending personal injury action brings claims
under that statute against their insurer.
2. N.J.S.A. 39:6A-9.1
Plaintiffs’ Amended Complaint also alleges that a provision
under the AICRA detailing when and how an insurer may recover
benefits paid to an insured from a tortfeasor or the torfeasor’s
automobile insurer also prohibited Defendants from seeking
subrogation from Plaintiffs.
The relevant provision states,
a. An insurer, health maintenance organization or
governmental
agency
paying
benefits
pursuant
to
subsection a., b. or d. of section 13 of P.L.1983, c.
362 (C.39:6A-4.3), personal injury protection benefits
in accordance with section 4 or section 10 of P.L.1972,
c. 70 (C.39:6A-4 or 39:6A-10), medical expense benefits
pursuant to section 4 of P.L.1998, c. 21 (C.39:6A-3.1)
or benefits pursuant to section 45 of P.L.2003, c. 89
(C.39:6A-3.3), as a result of an accident occurring
within this State, shall, within two years of the filing
of the claim, have the right 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,
including personal injury protection coverage required
to be provided in accordance with section 18 of P.L.1985,
c. 520 (C.17:28-1.4), or although required did not
maintain personal injury protection or medical expense
benefits coverage at the time of the accident.

12

b. In the case of an accident occurring in this State
involving an insured tortfeasor, the determination as to
whether an insurer, health maintenance organization or
governmental agency 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. Any recovery by an insurer, health
maintenance organization or governmental agency pursuant
to this subsection shall be subject to any claim against
the insured tortfeasor's insurer by the injured party
and shall be paid only after satisfaction of that claim,
up to the limits of the insured tortfeasor's motor
vehicle or other liability insurance policy.
N.J.S.A. 39:6A-9.1.
Defendants argue that this provision does not prohibit
subrogation, but merely “conditions subrogation, regulating how
it may occur and limiting the extent of a subrogation recovery,
based upon factors such as the tortfeasor’s insurer’s policy
limits and whether the subrogor has been made whole.”
Rawlings’s Motion to Dismiss (“MTD”) at 14)

(Aetna &

Plaintiffs respond

that the statute clearly does not make injured parties
personally responsible to pay any subrogation claim and that
seeking subrogation from injured parties is therefore unlawful.
B. Applying the Statutes to the Present Case
The NJCSS, by its own explicit terms, does not apply when
the underlying personal injury action by which the insured seeks
to recover from a tortfeasor was filed pursuant to AICRA.

See

N.J.S.A. 2A:15-97 (“In any civil action brought for personal

13

injury or death, except actions brought pursuant to the
provisions of P.L.1972, c. 70 (C. 39:6A-1 et seq.) . . .”)
(emphasis added).

On this basis, Plaintiffs cannot assert that

Defendants violated both the NJCSS and AICRA – only one could
apply.
With regards to the NJCSS, the case law implies that the
statute, and its accompanying prohibition on subrogation, would
apply to an entity like the Fund, despite the Commissioner’s
regulation that the Fund specify its subrogation rights in its
bylaws.

County of Bergen made clear that the NJCSS draws no

distinction between publicly funded health plans and private
insurance companies.

Defendants give no reason to treat a

“joint insurance fund” created pursuant to N.J.S.A. 40A:10-36
differently than the “insurance fund” in County of Bergen, which
was created pursuant to N.J.S.A. 40A:10-6.

The entities in

County of Bergen are otherwise analogous to the present parties
– Bergen County’s plan, like the Fund, was administered through
a third party provider, which subcontracted subrogation services
to another entity.

Cnty. of Bergen, 412 N.J. Super. at 129.

Neither is the Court convinced by the Fund’s claim to
“regulatory mandated subrogation rights.”

The regulation

Defendants cite states that the bylaws of a joint insurance fund
shall “[s]pecify the subrogation rights of the fund.”
11:15-3.6(b)(3).

This does not “mandate” subrogation rights, as
14

N.J.A.C.

Defendants maintain.

It merely instructs joint insurance funds

to detail any subrogation rights they may have.

Further, The

New Jersey Supreme Court has opined that courts should interpret
regulations authorizing the inclusion of subrogation and
reimbursement provisions in health insurance contracts
“narrowly.”

Perreira, 169 N.J. at 416.

Considering the NJCSS’s

language regarding its inapplicability to certain types of cases
(e.g., workers’ compensation benefits), the proper
interpretation of the Commissioner’s regulation would be that
the Fund specify those particular kinds of subrogation rights in
its bylaws.
Yet, even accepting that the NJCSS applies to entities like
the Fund, Plaintiffs conceded during oral argument that their
underlying personal injury action falls under AICRA – an action
explicitly excluded from the NJCSS procedure.

The complication

here arises from Ms. Mattson’s decision to decline PIP
protection benefits in her automobile insurance policy in favor
of having her health insurance policy with the Fund cover
medical bills.

(Amend. Compl. ¶ 10)

Under AICRA, when an

insured makes such an election, her automobile insurance will be
secondary to her health insurance policy, and will be liable
only for medical expenses not covered by the primary insurer.
N.J.S.A. 39:6A-4.3(d).

In his pending personal injury lawsuit,

Eric has indeed invoked AICRA by suing his automobile insurance
15

company along with the tortfeasor for allegedly unpaid benefits.
Plaintiffs did not respond to this argument in their papers and
did not explain during oral argument how the NJCSS and AICRA
could apply in the same case.
Turning to the AICRA procedure laid out in N.J.S.A. 39:6A9.1, Plaintiffs are correct in arguing that the statute does not
permit the entity paying health benefits to seek reimbursement
from the insured in the insured’s personal injury action against
the tortfeasor or tortfeasor’s automobile insurer.

However, the

Court has not found any cases applying this provision of AICRA
to an entity like the Fund, and not an automobile insurer, as a
result of an insured’s decision to decline primary PIP
protection benefits from her automobile insurer.
The extent to which the NJCSS and N.J.S.A. 39:6A-9.1 apply
to this case is unclear.

However, the Court need not rule at

this time whether either statute prohibited Defendants’
subrogation activity.

Even assuming one or both statutes apply,

Plaintiffs have not pled facts sufficient to state claims under
the CRA, CFA, and TCCWNA.
C. Merits Of Plaintiffs’ Causes of Action
As stated above, Plaintiffs’ Amended Complaint alleges that
the Fund violated the CRA in seeking subrogation to which it was
not entitled under New Jersey law, and that Aetna and Rawlings

16

violated the CFA and TCCWNA for similar reasons.

The Court

addresses each claim in turn.
1. CRA Claim Against the Fund
The New Jersey Civil Rights Act, N.J.S.A. 10:6-1, et seq.,
provides as follows:
Any person who has been deprived of any substantive due
process or equal protection rights, privileges or
immunities secured by the Constitution or laws of the
United States, or any substantive rights, privileges or
immunities secured by the Constitution or laws of this
State, or whose exercise or enjoyment of those
substantive rights, privileges or immunities has been
interfered with or attempted to be interfered with, by
threats, intimidation or coercion by a person acting
under color of law, may bring a civil action for damages
and for injunctive or other appropriate relief . . . .
N.J.S.A. 10:6-2(c).
New Jersey courts have described two circumstances under
which a person may bring a civil action under the CRA: “(1) when
he’s deprived of a right, or (2) when his rights are interfered
with by threats, intimidation, coercion or force.”

Felicioni v.

Admin. Office of Courts, 404 N.J. Super. 382, 400 (App. Div.
2008).

“To establish a cause of action [under the CRA], a

plaintiff must allege a specific constitutional violation.”
Matthews v. N.J. Inst. of Tech., 717 F. Supp. 2d 447, 452
(D.N.J. 2010).

“[A] procedural due process claim cannot be

brought under the NJCRA.”

Major Tours, Inc. v. Colorel, 799 F.

Supp. 2d 376, 405 (D.N.J. 2011).

17

Plaintiffs do not offer a cogent theory of liability under
the CRA.

The Amended Complaint does not identify any specific

Federal or State constitutional violation, or any general right
to which Plaintiffs were deprived.

In their opposition to the

instant motions, Plaintiffs claim only that “the Fund seeks to
enforce its alleged subrogation rights against plaintiff in
violation of plaintiff(s)’ substantive rights pursuant to New
Jersey law.”

(Pls.’ Opp. to the Fund’s MTD at 14)

Implicit in

this allegation is either the NJCSS’s or N.J.S.A. 39:6A-9.1’s
creation of some substantive right to be free from subrogation
claims.
In determining whether a statute gives rise to a “right”
under the CRA, the New Jersey Supreme Court has applied the same
test developed by the Supreme Court in the context of Section
1983, the vehicle for vindicating rights conferred by the
Federal Constitution and federal laws.
N.J. 450, 476 (2014).

Tumpson v. Farina, 218

To prove a statute creates a “right”

under Section 1983, a plaintiff must show “(1) Congress intended
the statute the benefit the plaintiff; (2) the right assertedly
protected by the statute is not so vague and amorphous that its
enforcement would strain judicial competence; and (3) the
statute must unambiguously impose a binding obligation on the
States.”

Id. at 475 (internal quotations omitted) (citing

18

Blessing v. Freestone, 520 U.S. 329, 340-41 (1997).

Neither the

NJCSS nor N.J.S.A. 39:6A-9.1 satisfy these three factors.
As stated in Perreira, the NJCSS’s purpose is “to limit the
double recovery to plaintiffs that flowed from the common-law
collateral source rule and to allocate the benefit of that
change to liability carriers.”

169 N.J. at 403.

The

Legislature did not intend for the statute to “benefit”
Plaintiffs; if anything, it accomplished the opposite by
eliminating the windfalls to which Plaintiffs might have been
privy under the common-law rule.

Liability carriers, not

Plaintiffs, benefit from the NJCSS.

The Court therefore holds

that the NJCSS does not confer a substantive right on Plaintiffs
that may form the basis of a CRA claim.1
Plaintiffs fare no better under N.J.S.A. 39:6A-9.1.

“The

legislative intent behind this statute was to . . . reduc[e] the
cost of insurance for automobile owners and allow[ ] automobile
insurers to recover PIP through reimbursement.”

State Farm Mut.

Ins. Co. v. Licensed Beverage Ins. Exch., 146 N.J. 1, 9 (1996).
The statute does, in this sense, “benefit” Plaintiffs in
lowering their automobile insurance costs.

However, this

benefit does not flow from Plaintiffs’ asserted right to be free

1 Additionally, the NJCSS is
United Healthcare Corp., 402
[the NJCSS] is a general law
Section 1983, does not cover
cannot serve as the basis of

clearly a procedural statute. See Levine v.
F.3d 156, 165 (3d Cir. 2005) (“[T]he law here
of civil procedure.”). Since the CRA, unlike
procedural due process violations, the NJCSS
CRA claim.

19

from subrogation, but from a right conferred on Plaintiffs’
automobile insurer.

See id. at 10 (“[T]his Court, as well as

others, have acknowledged that section 9.1 . . . confers a
primary right of reimbursement on the injured party’s insurer.”)
(internal quotations omitted).

The Court cannot find that

N.J.S.A. 39:6A-9.1 gives Plaintiffs a clear substantive right to
be free from subrogation when such a right would have no
relation to the legislative intent behind the statute.
Since neither the NJCSS nor N.J.S.A. 39:6A-9.1 grant
Plaintiffs a substantive right to be free from subrogation, the
Court will grant the Fund’s motion to dismiss Plaintiffs’ CRA
claim.
2. CFA Claim Against Aetna and Rawlings
As an initial matter, allegations of fraud are subject to a
heightened pleading standard, requiring a plaintiff to “state
with particularity the circumstances constituting fraud.”
R. Civ. P. 9(b).

Fed.

Rule 9(b) requires a plaintiff to plead enough

factual information to put the defendant on notice of the
“precise misconduct with which [it is] charged”.

Frederico v.

Home Depot, 507 F.2d 188, 200 (3d Cir. 2007) (citing Lum v. Bank
of Am., 361 F.3d 217, 223-224 (3d Cir. 2004).

The heightened

pleading standard set forth in Rule 9(b) will apply to
Plaintiffs’ CFA claims.

F.D.I.C. v. Bathgate, 27 F.3d 850 (3d

20

Cir. 1994) (affirming District Court‘s application of Rule 9(b)
to CFA claim)
To state a claim under the CFA, a plaintiff must allege:
“(1) unlawful conduct by the defendants; (2) an ascertainable
loss on the part of the plaintiff; and (3) a causal relationship
between the defendant’s unlawful conduct and the Plaintiffs’
ascertainable loss.”

Frederico, 507 F.3d at 202 (citing Cox v.

Sears Roebuck & Co., 138 N.J. 2, 23-24 (1994)).

Here,

Plaintiffs’ CFA claim fails because they have not sufficiently
pled an ascertainable loss.
The CFA does not define what constitutes an “ascertainable
loss,” but the New Jersey Supreme Court has recognized that the
loss must be capable of calculation, and not just hypothetical
or illusory.

Thiedemann v Mercedes-Benz USA, LLC, 183 N.J. 234,

248 (2005); see also Torres-Hernandez v. CVT Prepaid Solutions,
Inc., No. 08–1057–FLW, 2008 WL 5381227, at *7 n. 3, (D.N.J. Dec.
9, 2008) (“A sufficiently plead ascertainable loss is one with
enough specificity as to give the defendant notice of possible
damages.”).
In their opposition to Aetna and Rawlings’s motion,
Plaintiffs argue that they sufficiently pled “an ascertainable
loss in the form of an improper debt and/or lien proximately
cause by defendant(s)’ improper efforts to collect sums to which
defendant(s) are not entitled.”

(Pls.’ Opp. to Aetna & Rawlings
21

MTD at 18)

Plaintiffs cite to Cox v. Sears Roebuck & Co., where

the New Jersey Supreme Court stated that “an improper debt or
lien against a consumer-fraud plaintiff may constitute a loss
under the [CFA], because the consumer is not obligated to pay an
indebtedness arising out of conduct that violates the Act.”
N.J. at 23.

138

Here, Plaintiffs point to Rawlings’s August 1,

2013, letter stating that Eric’s medical expenses, on which
Aetna claimed to have a lien, amounted to $19,062.10.

(Aug. 1,

2013, Ltr. from Rawlings, Ex. 5 to Amend. Compl.)
This Court finds Cox inapplicable to the present facts.

In

Cox, the plaintiff had entered into a contract with defendant
Sears for renovations to plaintiff’s kitchen and financed that
transaction by charging it to his Sears credit card.
at 7.

138 N.J.

The work on plaintiff’s kitchen proved faulty, and the

cost of repairing the kitchen would have cost plaintiff
thousands of dollars.

Id. at 10.

The New Jersey Supreme Court

found that both the cost of repairing the kitchen, and
plaintiff’s credit card debt, qualified as losses under the CFA.
Id. at 23.

With regards to the debt, the Court noted that it

“was presumptively collectible prior to the lawsuit, and Sears
filed a counterclaim demanding payment of the full contract
price.

Sears also filed a lien on plaintiff’s house, thereby

encumbering the title.”

Id.

22

The “claim/lien” referenced in Rawlings’s letters to
Plaintiffs does not equate to the credit card debt the Cox
plaintiff had incurred.

Unlike the debt in Cox, the claim/lien

in this case was not collectible when Rawlings sent the relevant
notice.

Plaintiffs had not even filed the underlying personal

injury lawsuit, let alone gained some recovery from that action.
The claim/lien was never “charged” to any of Plaintiffs’ credit
cards or accounts.

Neither had Aetna, acting alone or through

Rawlings, filed a lien on any of Plaintiffs’ property.
Plaintiffs have suffered in no discernable way.

Simply put, the

alleged harm in this case is illusory.2
Accordingly, the Court will grant Aetna and Rawlings’s
motion to dismiss as to Plaintiffs’ CFA claim.
3. TCCWNA Claim Against Aetna and Rawlings
The TCCWNA provides:
No seller, lessor, creditor, lender or bailee shall in
the course of his business offer to any consumer or
prospective consumer or enter into any written consumer
contract or give or display any written consumer
warranty, notice or sign after the effective date of
this act which includes any provision that violates any
clearly established legal right of a consumer or
responsibility of a seller, lessor, creditor, lender or
bailee as established by State of Federal law at the

2

This Court has already rejected prior assertions that Cox held CFA
plaintiffs need not allege that they suffered any monetary loss. See DeHart
v. U.S. Bank, N.A. ND, 811 F. Supp. 2d 1038 (D.N.J. 2011). In DeHart, the
plaintiffs argued that Cox found the CFA “does not require the consumer to
have paid the false debt.” Id. at 1050. The Court found “no support for
this proposition in either Cox or in logic itself,” and rejected CFA claims
where plaintiffs “have not paid for anything and have not alleged that they
will be obligated to pay anything improper in the future.” Id.

23

time the offer is made or the consumer contract is signed
or the warranty, notice or sign is given or displayed.
N.J.S.A. 56: 12-15.
To properly state a claim under the TCCWNA, a plaintiff
must allege each of following: (1) the plaintiff is a consumer;
(2) the defendant is a seller; (3) the “seller offers a consumer
contract” or gives or displays any written notice, or sign; and
(4) the contract, notice or sign includes a provision that
“violate[s] any legal right of a consumer” or responsibility of
a seller.

Watkins v. DineEquity, Inc., 591 F. App’x 132, 135

(3d Cir. 2014); Bosland v. Warnock Dodge, Inc., 396 N.J. Super.
267 (App. Div. 2007), aff’d, 194 N.J. 543 (2009).

The TCCWNA

only bolsters rights established by other laws; it does not
create any new consumer rights.

Watkins, 591 F. App’x at 134.

Since the Court finds that Plaintiffs have not sufficiently
pled a CFA claim against Aetna and Rawlings, Plaintiffs’ TCCWNA
claim relies on Defendants’ having violated Plaintiffs’ alleged
rights under the NJCSS and AICRA.
Aetna and Rawlings present several reasons to dismiss
Plaintiffs’ TCCWNA claim.

First, they argue that Plaintiffs do

not qualify as “consumers” under the statute.

Second,

Defendants assert that the notice letters Rawlings sent
Plaintiffs did not violate any clearly established rights at the
time the letters were sent.

Finally, Defendants argue that any

24

right they may have violated was surely not “clearly
established” at the time.
With regards to whether Plaintiffs qualify as “consumers”
under the TCCWNA, Plaintiffs argue that Aetna, through its agent
Rawlings, acted as “bailees” on behalf on Plaintiffs.
Plaintiffs explain the relationship as follows: Aetna and
Rawlings “(1) demand and take money paid for the subrogation
claim from plaintiff(s) for payment to the Fund; and (2) Aetna
pays medical claims on behalf of the plaintiff(s) and the Fund
to third party creditors.”
at 22-23)

(Pls.’ Opp. to Aetna & Rawlings MTD

Defendants respond that no elements of a bailment are

present here.

The Court agrees with Defendants.

“The elements of ‘bailment’ are delivery of personal
property by one person to another in trust for a specific
purpose, acceptance of such delivery, and express or implied
agreement to carry out the trust and return the property to the
bailor.”

Sgro v. Getty Petroleum Corp., 854 F. Supp. 1164,

1174-75 (D.N.J. 1994).

Plaintiffs stretch this definition of

bailment beyond recognition.
As the Court understands it, Plaintiffs claim that they
“bailed” money with Aetna and Rawlings by way of Rawlings’s
subrogation demand, and that such property was returned to
Plaintiffs through the medical benefits Eric received.

Yet,

Plaintiffs have not actually given Aetna or Rawlings any money,
25

and the demand for such funds post-dated the benefits Eric
received.

Under Plaintiffs’ theory, Eric had the bailment

property returned to him before he put it in another’s trust.
That explanation defies logic.
In addition, as discussed above, neither the NJCSS nor
N.J.S.A. 39:6A-9.1 confer on Plaintiffs a “right” to be free
from subrogation.

The NJCSS is a procedural statute aimed at

eliminating an insured’s double recovery in a personal injury
action.

N.J.S.A. 39:6A-9.1 gives injured parties’ insurers the

right to seek reimbursement from tortfeasors or tortfeasors’
insurers.

Even if the Court interpreted those statutes today as

conferring such a right on Plaintiffs, the Court could not
conclude that the right was “clearly established” at the time
Rawlings sent the relevant notices to Plaintiffs in July and
August 2013.
Accordingly, the Court will grant Aetna and Rawlings’s
motion to dismiss as to Plaintiffs’ TCCWNA claim.3

IV.

Leave to Amend

In their opposition papers to the instant motions,
Plaintiffs ask the Court for leave to amend the Amended
Complaint if the Court were to find that the Amended Complaint

3

Since the Court holds that Plaintiffs have not stated claims under the CRA,
CFA, and TCCWNA, it need not address whether Plaintiffs exhausted
administrative remedies.

26

fails to state claims under the CRA, CFA, and TCCWNA.

However,

the Court sees no way further amendment would provide any more
facts to save Plaintiffs’ claims.

The Court will therefore deny

Plaintiffs’ request to amend the Amended Complaint.

V.

Conclusion

For the reasons set forth above, the Court will GRANT
Defendants’ motions to dismiss.

An appropriate order

accompanies this opinion.

Date: August 31, 2015

s/ Joseph E. Irenas
_
Joseph E. Irenas, S.U.S.D.J.

27