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Garden State Pain Management, P.A. v. Country-Wide Insurance Co.

July 18, 2008


On appeal from Superior Court of New Jersey, Law Division, Bergen County, No. L-2252-07.

Per curiam.


Argued May 7, 2008

Before Judges Wefing and Koblitz.

Abad Ahmed was injured in an automobile accident in New Jersey on March 21, 2003, while driving a car belonging to his uncle, Rahman Mujibur. Mujibur was a New York resident who insured the vehicle through Country-Wide Insurance Co. under a policy issued in New York. Country-Wide is not licensed to issue insurance in New Jersey, and it conducted no business in New Jersey. Its certificate of authority to conduct insurance business in New Jersey was withdrawn at its request, effective February 21, 2003, one month before the accident.

Following the accident, Ahmed was taken by ambulance to St. Joseph's Hospital in Paterson, where he provided a New Jersey address. He had X-rays and received medical treatment from Sall Myers Medical Association for his injuries. Ahmed applied to Country-Wide for no-fault benefits. He submitted an affidavit that he was not eligible for no-fault insurance under any other policy and listed his address as his uncle's address in Long Island City.

At first, Country-Wide took the position that Ahmed was not an eligible insured under his uncle's policy, and it sent denials on that basis to the hospital, the radiologist and Sall/Myers in June 2003.

In July 2003, however, Country-Wide issued checks to St. Joseph's, the radiologist and the Sall/Myers group for their services. The record does not disclose what led Country-Wide to this change of position. Country-Wide also received reports dated July 1, 2003, from a chiropractor, an orthopedist and a neurologist, all stating that Ahmed did not need any further treatment.

Ahmed, however, contended he continued to experience pain and related difficulties, and he came under the care of Garden State Pain Management for the injuries he received in the accident. Garden State sent requests to Country-Wide in September and October 2003 seeking pre-approval for pain management treatment. When it received no response, it proceeded to render treatment to Ahmed, who had assigned his rights under his uncle's policy to Garden State. Garden State submitted a claim for benefits which Country-Wide denied in November 2003 on the basis of the earlier reports which had indicated Ahmed had no need for any further treatment. CountryWide made no mention in its denials to Garden State of any dispute about Ahmed's status as an eligible insured under his uncle's policy.

In December 2003 Garden State filed a demand for arbitration with the American Arbitration Association. The arbitrator held a hearing in February 2005 and in March 2007 issued a written opinion dismissing the arbitration without prejudice on the basis that there was no subject-matter jurisdiction in New Jersey over Country-Wide. The arbitrator gave no explanation as to how he came to that conclusion.

Shortly thereafter, Garden State filed its complaint and order to show cause, appealing from that determination, contending that the arbitrator had made an error of law. Country-Wide opposed the order to show cause, contending that the arbitrator correctly decided there was no jurisdiction and, further, that Ahmed was a resident of New Jersey, not a resident of his uncle's household, and thus not entitled to no-fault benefits under his uncle's policy. During the course of the arbitration proceedings, Country-Wide deposed Ahmed. That deposition revealed that Ahmed had applied for United States citizenship in 1997 and had listed himself as a New Jersey resident. In 2002, he applied for a United States passport and gave his address as 323 Totowa Avenue in Paterson. At St. Joseph's Hospital, he gave the Paterson address. He was employed in New Jersey, and his wife lived in Paterson.

Following argument, the trial court issued an order referring the matter to arbitration before the National Arbitration Forum (NAF). It concluded that Country-Wide, having failed to respond to Garden State's requests for approval prior to proceeding to treat Ahmed, was precluded from defending the arbitration on the basis that Ahmed was not a resident of his uncle's household. The trial court directed that the only issues to be decided in the arbitration were the medical necessity of the treatments Garden State provided and the level of reimbursement, if any.

Country-Wide then moved for reconsideration. The trial court granted reconsideration to the extent that it directed that Country-Wide could raise any defense in the arbitration except that of jurisdiction, the court having concluded that NAF had subject-matter jurisdiction. Country-Wide has appealed.

Country-Wide argues that the trial court did not have in personam jurisdiction over it and that there was no basis to exercise long-arm jurisdiction over it. Respondent contends that ...

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