On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket Nos. L-3056-03, L-2543-04 and L-2546-05.
The opinion of the court was delivered by: Wefing, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Wefing, Yannotti and LeWinn.
Pursuant to leave granted, the State of New Jersey Office of the Insurance Fraud Prosecutor ("OIFP") appeals from a trial court order denying its motion for summary judgment. After reviewing the record in light of the contentions advanced on appeal, we affirm in part, reverse in part, and remand for further proceedings.
The matter has a complex factual background which must be set forth for a complete analysis of the questions presented. Defendant Dominick Fiorenza is an accountant and defendant Mark Cammarota was a client of his. Cammarota suggested to Fiorenza that they go into business and establish a facility dedicated to performing magnetic resonance imaging ("MRI") tests. Cammarota told Fiorenza that there was a strong need for such facilities, the cost of operation was relatively low, and the rate of reimbursement by insurance carriers was high. Fiorenza was intrigued and talked to defendant Eddy Fischgrund about the idea. Fiorenza and Fischgrund, a chiropractor, then talked with equipment vendors to explore the matter. One of the salesmen told them that all they needed to do was find an appropriate location and obtain a certificate of need from the Department of Health and Senior Services. They inquired whether he knew of anyone with a background in running such a facility and they were referred to Ray Carolonza. The three men decided to place Carolonza in charge of the administrative functions of the business.*fn1
In addition, they met with defendant John R. Frieri, Esq., who assured them that he was an expert in healthcare law and medical billing. They retained Frieri to handle the legal issues in connection with opening an MRI facility.
Fiorenza, Fischgrund and Cammarota organized themselves into a limited liability company, plaintiff MRI Management ("Management"). In addition, a partnership, plaintiff Open MRI of Morris & Essex ("Open"), was created to own and operate the proposed facility. Management was the general partner of Open. Additional individuals were admitted as limited partners to Open to provide the necessary capitalization for the business.
In March 1997, Open filed an application with the Department of Health and Senior Services for a certificate of need for a proposed MRI facility to be located on Route 10 in East Hanover. On May 6, 1997, the then-Commissioner wrote a letter addressed to Ray Carolonza, as the chief operating officer of Open, with a copy to defendant Fiorenza, at Fiorenza's business address.
The letter itself was a detailed, two-page single-spaced letter. The first paragraph read, Congratulations! I am pleased to inform you that I am approving Open MRI of Morris & Essex, L.P.'s certificate of need application, submitted pursuant to N.J.A.C. 8:33-5.1, for the establishment of a magnetic resonance imaging/nuclear magnetic resonance (MRI) service to be located in East Hanover, New Jersey.
Fischgrund and Fiorenza testified in their depositions that they never read anything in the letter past that first paragraph. Thus they stated that they never read the last sentence in the next-to-last paragraph in the letter which stated:
Finally, please be advised that services may not commence until such time as a license has been issued by the Certificate of Need and Acute Care Licensure Program.
Shortly after receipt of the letter of May 6, 1997, Open commenced operating its facility and submitting claims to health insurers for reimbursement for its services. These claims were paid in the ordinary course until it came to light that Open had not received the ...