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New Jersey Citizens Underwriting Reciprocal Exchange v. Kieran Collins

March 18, 2008


On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-3394-06.

The opinion of the court was delivered by: Fisher, J.A.D.



Argued February 11, 2008

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

This appeal requires that we once again consider whether or to what extent we have jurisdiction to review a trial court's decision to modify or vacate an arbitration award rendered pursuant to The New Jersey Alternative Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -30.

Plaintiff New Jersey Citizens Underwriting Reciprocal Exchange (plaintiff) filed this action, seeking to upset a ruling made by an arbitrator in favor of defendant Kieran Collins, who medically treated Leocadia Nunez, Eriberto Carrero, Sr., and their minor child, Eriberto Carrero, Jr., as the result of two separate automobile accidents. The record reveals that Eriberto Carrero, Sr. (Eriberto) applied on March 29, 2002 and obtained an automobile insurance policy from plaintiff. At that time, and on each renewal application, Eriberto represented to plaintiff that he was single and lived alone when, in fact, he married Leocadia Nunez (Leocadia) on March 23, 2002.

Leocadia was injured in an accident that occurred on December 6, 2004 while she was operating Eriberto's vehicle. As a result, she sought benefits based on the policy issued by plaintiff. Eriberto and his son sought benefits against the same policy as a result of an automobile accident that occurred on December 13, 2004.

During the course of processing these claims, plaintiff obtained recorded sworn statements from Eriberto and Leocadia regarding their residency and marital status. Based upon their inconsistent statements, plaintiff examined further whether Eriberto made materially false statements in applying for automobile insurance on March 29, 2002, or when he annually applied for the policy's renewal. Ultimately, plaintiff took the position that the policy should be declared void ab initio because Eriberto materially misrepresented: (a) he was single --when in fact he married Leocadia on March 23, 2002, six days before the original application; (b) no one else lived with him -- when in fact Leocadia lived with him; and (c) he was the only operator of the insured vehicle -- when in fact his resident spouse, Leocadia, operated the vehicle. Based on this assessment, plaintiff did not pay defendants' bills as they were submitted.

As a result, defendant Collins, as assignee of Eriberto and the child, filed arbitration demands with the National Arbitrations Forum (NAF) on July 19, 2005; and, as assignee of Leocadia, Collins filed an arbitration demand with the NAF on August 11, 2005. Plaintiff appeared in those matters and timely requested their consolidation because they were filed by the same petitioner, sought benefits under the same policy and during the same coverage period, and were subject to the same defenses even though the claims involved two separate auto accidents. NAF Dispute Review Professional Johnston (DRP Johnston) denied the request for consolidation, although the two matters involving Eriberto and the child (hereafter "the Eriberto arbitration"), which arose from the same auto accident, were assigned to and handled together by DRP Johnston; the arbitration regarding the services rendered on Leocadia's behalf (the Leocadia arbitration) was assigned to and heard by DRP Carr.

The Eriberto arbitration was the first to be reached. DRP Johnston heard and considered the conflicting testimony of Eriberto and Leocadia, as well as other evidence, regarding their residency and marital status. In her written decision of July 11, 2006, DRP Johnston made the following findings:

[Plaintiff's] position is that [Eriberto] was the named insured under [the] auto insurance policy issued by [plaintiff]. A claim for PIP benefits was filed on behalf of him and his son for injuries allegedly sustained in an auto accident on December 13, 2004. In the December 13, 2004 accident the policy holder was driving his 1994 Ford Explorer which was involved in an accident. His son was a front seat passenger at the time of the loss. The problem comes into play with the policy holder information provided.

The address noted on the police report for [Leocadia] also involved in a prior accident was 77 Brook Avenue, Apartment A18, Passaic, New Jersey. [Leocadia] stated that she had known [Eriberto] for two years, had just moved in with him in November 2004 and that they had one child together. She advised that it had been the first time to use his vehicle and that a prior address was with her mother at 381 Lafayette Street, Passaic, New Jersey. [Eriberto] stated in a recorded statement that in fact he lived with [Leocadia] at the time of the accident and had lived with her for approximately seven or eight months. He stated that she had the use of . . . either of his vehicles approximately once a week. The carrier ran a search that indicated that [Leocadia] resided with the policy holder since September of 2002. Additionally in a statement under oath [Leocadia] advised that she had been married [to Eriberto] on March 23, 2002. Thereafter she denied this in [the] recorded statement [she gave to plaintiff].

[Plaintiff] relied on the affidavit of no insurance submitted by [Leocadia]. The address listed was 77 Brook Avenue, Apartment A18, Passaic. [Plaintiff's] Exhibit 8 includes [Leocadia's] tax returns for years 2001 through 2004. For tax year of 2002 and 2003 her address is listed as 77 ...

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