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Elmora Open MRI v. Rutgers Casualty Insurance Co.


May 29, 2007


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. BER-L-1890-06.

Per curiam.


Telephonically argued February 22, 2007

Before Judges Parker, C.S. Fisher and Yannotti.

Defendant Rutgers Casualty Insurance Company (Rutgers) appeals from an order entered on June 13, 2006 modifying an arbitration award and confirming it as modified. The trial court subsequently issued a rider to the June 13, 2006 order awarding plaintiff counsel fees and costs in the amount of $2,850 for the arbitration and trial court application.

The facts giving rise to this claim are as follows. Plaintiff Elmora Open MRI (Elmora) performed an MRI on Maria Y. Perez and submitted the claim to Rutgers on October 14, 2004 for PIP benefits. By letter dated November 3, 2004, Rutgers informed Elmora that the invoice had been referred to its Special Investigation Department. The letter stated that Rutgers would not be in a position to determine its obligation for the services until "this matter is resolved."

Because its claim remained unpaid, plaintiff filed a demand for arbitration on January 7, 2005, seeking an award of PIP benefits in the amount of $2,700. The PIP benefits were paid on May 19, 2005. Interest was paid on July 27, 2005. In this action, plaintiff sought the award of counsel fees and costs incurred in the arbitration proceeding and this action.

The arbitrator refused to award counsel fees and costs to plaintiff based on a finding that plaintiff's demand for arbitration was premature. The arbitrator found that pursuant to N.J.S.A. 39:6A-5g, Rutgers had until January 29, 2005 to complete its investigation and make a decision regarding payment of the claim. The statute provides in pertinent part:

[PIP] coverage benefits . . . shall be overdue if not paid within [sixty] days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same . . . . provided, however, that any payment shall not be deemed overdue where, within [sixty] days of receipt of notice of the claim, the insurer notifies the claimant or his representative in writing of the denial of the claim or the need for additional time, not to exceed [forty-five] days, to investigate the claim, and states the reasons therefor[e]. The written notice stating the need for additional time to investigate the claim shall set forth the number of the insurance policy against which the claim is made, the claim number, the address of the office handling the claim and a telephone number. [N.J.S.A. 39:6A-5(g).]

Plaintiff sought to have the arbitrator modify or clarify the arbitration award, arguing that the arbitrator erred in concluding that plaintiff's demand for arbitration was premature. Plaintiff asserted that Rutgers had not paid the claim until well beyond the 105-day period allowed under N.J.S.A. 39:6A-8g. The arbitrator rejected this contention, concluding that this was a new legal argument, which had not been raised previously, and did not, therefore, constitute an appropriate request for modification or clarification of the award.

Plaintiff then commenced this action in the Law Division, seeking to "modify/vacate" the award. Plaintiff alleged that the demand for arbitration was not premature. Plaintiff further alleged that because Rutgers had not paid the claim within sixty days, and failed to make a proper request for the additional forty-five days for investigation, its demand for arbitration was timely. Plaintiff demanded counsel fees and costs.

In its written "rider" to the June 13, 2006 order, the trial court concluded that the demand for arbitration was timely because Rutgers's November 3, 2004 letter did not state the reasons why additional time was required to investigate the claim and because the letter did not set forth the number of the insurance policy. The judge found that because of the deficiencies, plaintiff could demand arbitration after December 14, 2004 when the sixty-day period had ended.

In this appeal, Rutgers argues that the trial judge erred in vacating the arbitration award.

N.J.A.C. 11:3-5.6(f) provides that "[t]he final determination of the dispute resolution professional [in a PIP dispute] shall be binding upon the parties, but subject to vacation, modification or correction by the Superior Court in any action filed pursuant to [the New Jersey Alternate Procedure for Dispute Resolution Act] for review of the award." Under the Act, the trial court is required to enter judgment "confirming, modifying or correcting [the] award," and "[t]here shall be no further appeal or review of the judgment or decree." N.J.S.A. 2A:23A-18b.

Rutgers argues that Allstate Ins. Co. v. Sabato, 380 N.J. Super. 463, 473-74 (App. Div. 2005), allows us to entertain this appeal because it involves an award of counsel fees. Ibid. In Sabato, however, the issue was the amount of fees. Here, the issue is whether the demand for arbitration was timely. In our view, N.J.S.A. 2A:23A-18b bars any appellate review of the award.

The appeal is dismissed.


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