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Surgicare of Englewood Cliffs v. Allstate Insurance Co.


May 25, 2010


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-5836-09.

Per curiam.


Argued May 12, 2010

Before Judges Fisher and Sapp-Peterson.

This is an appeal of a trial court order that vacated a decision of an arbitrator pursuant to the Alternative Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -30.

Our initial obligation is to determine whether we have jurisdiction in light of N.J.S.A. 2A:23A-18(b), which declares that, following the trial court's judgment, "[t]here shall be no further appeal or review . . . ."

The record reveals that plaintiff Surgicare of Englewood Cliffs sought payment of medical bills for two injections ($6080 each) and a discogram ($4000) for its patient, Alfredo Hernandez. Defendant Allstate Insurance Company disputed the reasonableness of these charges and, as a result, Surgicare commenced the arbitration.

The arbitrator concluded that the services rendered were medically necessary. In considering the reasonableness of the charges, see, e.g., Cobo v. Mkt. Transition Facility, 293 N.J. Super. 374 (App. Div. 1996), the arbitrator relied on Nurse Patricia Ross's opinion, which was presented by Allstate, in discounting the amount sought by Surgicare. The arbitrator concluded for reasons expressed in a written opinion that the usual, customary and reasonable fees for all these services amounted to $3094.29.

Surgicare commenced this action in the Law Division, seeking a judgment vacating the award pursuant to N.J.S.A. 2A:23A-13(c)(5), which authorizes such relief when the arbitrator commits prejudicial error in the application of law to the issues and facts. In the summary proceeding permitted by APDRA, the judge considered the parties' submissions and concluded that the arbitrator erred in relying upon the nurse's opinion. The judge explained in his written opinion that the key issue was whether the charges were usual, customary and reasonable, which, in the judge's view, "require[d] an analysis and opinion for which Ms. Ross is not qualified." He also rejected the arbitrator's application of the multiple modality rule. As a result, the judge vacated the arbitration award, and awarded Surgicare $16,160 for the medical services provided to Hernandez, attorneys' fees in the amount of $1,750, and costs.

Allstate appealed, arguing: (1) that the judge misapplied APDRA; (2) that the judge erroneously found that Nurse Ross lacked the background, education, and experience to offer an opinion about the reasonableness of Surgicare's charges; (3) that a rejection of Nurse Ross's opinion should not have led to a vacating of the award; (4) that the judge mistakenly failed to apply the multiple modality rule; and (5) that N.J.S.A. 2A:23A-18(b) does not bar appellate review.

With increasing frequency, we have been asked to examine the extent to which this court may intervene in such matters. In considering the scope of N.J.S.A. 2A:23A-18(b), the Supreme Court recognized in Mt. Hope Dev. Assoc. v. Mt. Hope Waterpower Project L.P., 154 N.J. 141, 152 (1993), that there are exceptions to N.J.S.A. 2A:23A-18(b). For example, the Court held that APDRA's general elimination of appellate jurisdiction does not apply to child support orders or awards of counsel fees. Ibid. The Court also recognized that there may be other circumstances "where public policy would require appellate court review." Ibid.

In Morel v. State Farm Ins. Co., 396 N.J. Super. 472, 475-76 (App. Div. 2007), which quoted Mt. Hope, supra, 154 N.J. at 152, we observed that appellate review may occur when "necessary for [the court] to carry out 'its supervisory function over the [trial] courts.'" In Morel, Judge Coburn explained that the existence of this "supervisory function" permits our exercise of appellate jurisdiction when a trial court has exceeded its jurisdiction:

Plaintiff was entitled to a ruling applying the relevant statutory standards. Had the judge made such a ruling, the proper course would be dismissal of the appeal under N.J.S.A. 2A:23A-18. But the statutory denial of a right to appeal in this court is based on the assumption that the trial judge will decide the case by applying the principles dictated by the Legislature. When a judge fails to carry out that legislative direction, as occurred here, our supervisory role requires consideration of the appeal and reversal and remand for application of the statutory standards. Otherwise, the statute would be rendered meaningless.

[396 N.J. Super. at 476.]

We have since adhered to this interpretation of N.J.S.A. 2A:23A-18(b). See Riverside Chiropractic Group v. Mercury Ins. Co., 404 N.J. Super. 228, 240 (App. Div. 2008); N.J. Citizens Underwriting Reciprocal Exch. v. Kieran Collins, D.C., LLC, 399 N.J. Super. 40, 50 (App. Div.), certif. denied, 196 N.J. 344 (2008).

Indeed, this term we further demonstrated our adherence to Morel's approach and our respect for the Legislature's elimination of appellate review in such matters by concluding that appeals to this court must be dismissed even when we think the trial judge was mistaken in finding the arbitrator was in error. Fort Lee Surgical Ctr. v. Proformance Ins. Co., 412 N.J. Super. 99, 104 (App. Div. 2010). There, we examined whether the trial judge adhered to the limits of APDRA and found that the judge had applied, as here, N.J.S.A. 2A:23A-13(c)(5), which permits trial court intervention when it has been found that the arbitrator committed prejudicial error in the application of the law to the facts. Fort Lee, supra, 412 N.J. Super. at 103-04. In explaining the approach that has developed since Mt. Hope, we held:

Certainly, not every instance in which a judge utters the phrase "prejudicial error" will preclude appellate review. The exercise of our supervisory function cannot be talismanically eliminated by the mere invocation of the words of the statute.

But, when a trial judge is able to provide a rational explanation for how the arbitrator committed prejudicial error, N.J.S.A. 2A:23A-18(b) requires a dismissal of an appeal of that determination regardless of whether we may think the trial judge exercised that jurisdiction imperfectly.

Any broader view of appellate jurisdiction would conflict with the Legislature's expressed desire in enacting APDRA to eliminate appellate review in these matters. [412 N.J. Super. at 104.]

In this case, the trial judge analyzed the nurse's opinion, her background, the test for determining the admissibility of expert testimony, and the case law that has developed in determining what constitutes a usual, customary and reasonable medical charge. The judge determined that someone with this nurse's background, education and experience was not qualified to render the opinion necessary to defeat the provider's claim, and expressly concluded that this was the type of error that warranted the invocation of the power to vacate the award and to make his own findings in resolving the parties' disputes.

Because we are satisfied the judge exercised the authority granted by N.J.S.A. 2A:23A-13(c)(5), there is no principled reason for the exercise of our supervisory jurisdiction. We reject Allstate's contention that the legal issues posed in this arbitration are so weighted with policy considerations as to warrant the exercise of appellate jurisdiction.

Appeal dismissed.


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