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Gonzalez v. New Jersey Property Liability Insurance Guaranty Association

March 25, 2010


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3627-07.

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



Argued September 14, 2009

Before Judges Lisa, Baxter, and Alvarez.

In this appeal, we consider the validity of the National Arbitration Forum's (NAF) Rule 4.*fn1 The rule requires a person injured in an automobile accident to demonstrate "immediate and irreparable loss or damage" when seeking emergent medical services disputed by a personal injury protection (PIP) insurer. Plaintiff Miriam Gonzalez contends that the approval of Rule 4 by defendant, the Commissioner of the Department of Banking and Insurance (Commissioner): (1) violated the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -25, because the approval amended a regulation without compliance with the APA; (2) was ultra vires; (3) imposed additional eligibility requirements on PIP claimants in violation of public policy; (4) contravened the authority of NAF dispute resolution professionals (DRP) deciding emergent cases; and (5) violated equal protection under the state and federal constitutions. We find no merit to these claims and affirm the Commissioner's approval of NAF Rule 4.

On February 26, 2005, while crossing a street, plaintiff was struck by a motor vehicle, sustaining serious disabling injuries to her neck, back, and right shoulder.*fn2 Plaintiff alleges that after the accident her pain progressed to the extent that it interfered with her normal day-to-day functioning and disabled her from employment. On August 10, 2005, she underwent surgery on her right shoulder, which did not alleviate the problem. Multiple epidural nerve blocks were administered, but they too were ineffective.

PLIGA referred plaintiff to a pain management specialist, who recommended cervical spine surgery and, in turn, referred plaintiff to a neurosurgeon. After additional evaluation, the neurosurgeon, Frank Moore, M.D., proposed to perform "an anterior cervical diskectomy, fusion and instrumentation at C4-5 and C5-6." At PLIGA's request, William Foxall Cunningham, M.D. conducted an independent medical examination on May 10, 2007.

He opined that the surgery was unwarranted and the injuries were unrelated to the automobile accident. Consequently, PLIGA refused to pay for plaintiff's surgery.

On July 16, 2007, after a hearing, the DRP denied plaintiff's request for emergent relief, made pursuant to N.J.S.A. 39:6A-5.1. Applying the Rule 4 standard, the DRP concluded that "[t]here was no testimony o[r] evidence produced that demonstrated an immediate and irreparable harm if the surgery was not performed immediately." This litigation followed.

Plaintiff's Law Division complaint, filed on July 20, 2007, sought to enjoin NAF's application of the Rule 4 requirement that a claimant establish "immediate and irreparable loss" before emergent relief is granted. Plaintiff also sought a determination that the rule violated N.J.A.C. 11:3-5.4(b)(3).*fn3

The court heard final arguments on September 20, 2007, by which time plaintiff's second NAF hearing had been scheduled. Because no decision had been made, however, the Law Division judge dismissed the case as not ripe for adjudication.

On September 28, 2007, the DRP denied plaintiff's request for modification of the prior order denying emergent relief. In support of the request, plaintiff had asserted changed circumstances including a brief psychiatric hospitalization for depression due to her injuries.*fn4

On October 17, 2007, plaintiff's case was heard by the same DRP on the standard non-emergent calendar. Confronted with conflicting medical opinions, the DRP determined that Moore's testimony was more credible and found that the surgery was "medically necessary, reasonable and causally related to the [automobile] accident." See N.J.S.A. 39:6A-16. On November 13, 2007, plaintiff appealed the dismissal of her complaint. Plaintiff underwent surgery in December 2007, and, according to her attorney, her condition has since improved.


The New Jersey Automobile Reparation Reform Act (the Act), also known as the "No Fault Act," ensures that persons injured in automobile accidents receive medical and wage replacement benefits regardless of fault. N.J.S.A. 39:6A-1 and 39:6A-1.1b. The Act is to be given a liberal construction. N.J.S.A. 39:6A-16. The Automobile Insurance Cost Reduction Act (AICRA), N.J.S.A. 39:6A-1.1 to -35, adopted in 1998, amended the Act in order "to preserve the no-fault system" of benefits to residents injured in automobile accidents, "while at the same time reducing unnecessary costs which drive premiums higher." N.J.S.A. 39:6A-1.1b.

AICRA also required revision of the existing dispute resolution process in order to meet the legislative goal of "eliminating payment for treatments and diagnostic tests which are not medically necessary." Ibid. N.J.S.A. 39:6A-5.1b states that:

The Commissioner of Banking and Insurance shall designate an organization,... for the purpose of administering dispute resolution proceedings regarding medical expense benefits and other benefits provided under personal injury protection.... The commissioner shall promulgate rules and regulations with respect to the conduct of the dispute resolution proceedings....

The organization shall establish a dispute resolution plan, which shall include procedures and rules governing the dispute resolution process and provisions for monitoring the dispute resolution process to ensure adherence to ...

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