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Fort Lee Surgery Center, Inc. v. Proformance Insurance Co.

December 12, 2007

FORT LEE SURGERY CENTER, INC. A/S/O BRENT KEYS, PLAINTIFF-RESPONDENT,
v.
PROFORMANCE INSURANCE COMPANY, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-4920-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 26, 2007

Before Judges C.S. Fisher and C.L. Miniman.

In this appeal, we consider, among other things, whether N.J.S.A. 2A:23A-18(b) precludes appellate review of a trial judge's modification of an arbitrator's award. We conclude that we may exercise supervisory jurisdiction here because of our doubts about whether the trial judge confined her decision to the grounds for modification delineated in N.J.S.A. 2A:23A-13(c).

The record reveals that as a result of injuries sustained in a motor vehicle accident, Brent Keys underwent a series of lumbosacral epidural steroid and trigger point injections at the facilities of plaintiff Fort Lee Surgery Center. Defendant Proformance Insurance Company claimed this treatment was not medically necessary and declined payment of Fort Lee's bills. As a result, Fort Lee demanded that the matter be arbitrated, as was its right.

A hearing was conducted, following which the arbitrator rendered a written decision that contained his reasons for denying Fort Lee's claim. The arbitrator concluded, based upon the reports of three physicians, that the treatment in question did not meet the standards of medical necessity contained in N.J.S.A. 39:6A-2(m) and N.J.A.C. 11:3-4.2. The arbitrator also rejected Fort Lee's contention that prior arbitration awards rendered in Keys's favor prevented Proformance from relitigating the issue of medical necessity.

Fort Lee filed in the Law Division a verified complaint, which sought the court's review of the arbitrator's decision. This complaint was based on N.J.S.A. 2A:23A-13, which empowers a superior court judge to summarily determine whether to modify or correct an award issued by an arbitrator pursuant to the Alternative Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -30.

On the return date of an order to show cause entered at the commencement of this action, the trial judge stated in a brief oral decision that she agreed with Fort Lee's principal argument that the arbitrator's decision "is truly one that is unfair." Specifically, the judge agreed with Fort Lee that Proformance should have been estopped from contesting whether the expenses in question were medically necessary; she also held that the arbitrator's decision was not supported "by proper and substantial evidence." For completeness, we quote the judge's entire decision:

The court has carefully considered the arguments of counsel, the briefs and the cases that were submitted here with respect to this motion.

I would indicate that yes, equitable principles do apply as far as the court can determine based on that which has been presented. The simple facts are as counsel, both counsel have stated it. The arbitration -- one of the initial arbitration awards involved the denial of coverage, PIP coverage to Mr. Keys. Mr. Keys filed for the arbitration and that resulted in an award that Mr. Keys had not been uncooperative and that thereafter the medical expenses of Neurology and Pain Management for all the services or at least for the doctor's services were paid.

The principal argument here by the plaintiff is that the result here is truly one that is unfair. Of course both counsel are arguing to the court that there's --there is unfairness present.

The company itself, Proformance, after the arbitrator's award decided to pay the doctor's bills. That was their business decision as I take it but the counsel for Fort Lee says that the result of the arbitrator's findings was that the coverage was in place and thus the bills should be paid. There is to be no bar to the payment after the finding of coverage and I agree with that which has been presented by the plaintiff here.

That finding I find resulted in effect in the fact that all bills should have been paid with respect to the medical expenses of Neurology and Pain ...


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