Enterprise Rent-A-Car Co. of Boston, Inc. v. Arbella Mutual Insurance Co.

Summary

The Massachusetts Supreme Judicial Court held that a self-insured rental-car company qualifies as an insurer paying benefits under G. L. c. 90, § 34M, and may seek subrogation for PIP benefits paid to injured passengers from the at-fault operator’s personal automobile insurer. The court also held that whether the statute permits such subrogation is a legal question for a court, while fault and liability remain issues for arbitration. The summary judgment dismissing the rental company’s complaint was vacated, and the case was remanded.

Holdings

1. The court, rather than an arbitrator, may decide whether Enterprise is legally entitled under G. L. c. 90, § 34M, fifth paragraph, to seek subrogation from Metropolitan. Arbitration under the statute applies to disputes concerning liability or fault for the underlying accident after the insurers fail to agree, not to the legal question whether the statute authorizes the asserted subrogation claim.
2. A self-insured rental-vehicle owner that pays compulsory PIP benefits qualifies as an insurer paying benefits under G. L. c. 90, § 34M, fifth paragraph, and may pursue subrogation against the personal automobile insurer of an operator whose fault would otherwise make the operator liable in tort.

Questions Presented

1. Whether the question of Enterprise's legal entitlement to recover PIP-related expenses from Metropolitan under G. L. c. 90, § 34M, fifth paragraph, had to be submitted to arbitration rather than decided by a court.
2. Whether a self-insured rental-vehicle owner that paid compulsory PIP benefits could pursue statutory subrogation against the personal automobile insurer of the vehicle's operator.

Disposition

vacated