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Ifa Insurance Company v. American Trucking & Transportation Insurance Company

March 22, 2011


On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-3113-07.

Per curiam.


Argued February 14, 2011 - Decided Before Judges LeWinn and Coburn.

Defendant, American Trucking and Transportation Insurance Company (American Trucking), appeals from the November 13, 2009 judgment confirming an arbitration award in favor of plaintiff,

IFA Insurance Company (IFA), in the amount of $101,914.68 plus prejudgment interest and costs. American Trucking claims the judge applied the wrong standard of review to the arbitration award and that the arbitrator erred in failing to apply comparative negligence principles in determining his award. We affirm.

IFA's insured, Donika Lamcaj, was injured when her car was involved in an accident with a truck driven by Harold Mercer, which was insured by American Trucking. IFA paid personal injury protection (PIP) benefits to Lamcaj and then filed a complaint against American Trucking seeking reimbursement and requesting binding arbitration, pursuant to N.J.S.A. 39:6A-9.1.*fn1

American Trucking filed an answer in which it raised seventeen affirmative defenses, including comparative negligence.

On November 5, 2007, the judge entered an order compelling arbitration and naming an arbitrator to "decide what amount of money is owed by [American Trucking] to [IFA]." Arbitration was held on August 19, 2009. Lamcaj and Mercer testified. Both parties submitted exhibits, arbitration statements and written summations.

The arbitrator issued his decision on September 25, 2009. After reviewing the testimony and assessing the credibility of the witnesses, the arbitrator found that "Mercer operated his tractor trailer in a negligent manner and as a result, proximately caused the accident." With respect to American Trucking's request to apply comparative negligence principles, the arbitrator concluded that IFA's "claim under N.J.S.A. 39:6A-9.1 [wa]s for reimbursement and not a subrogation claim and therefore, the princip[le]s of comparative negligence d[id] not apply." The arbitrator awarded IFA $101,914.48, the total amount indicated on IFA's PIP ledger.

On September 29, 2009, IFA filed a motion to confirm the arbitration award. American Trucking filed a certification opposing the motion and seeking to vacate the award.

At oral argument on the motion, the judge asked counsel for American Trucking if she was aware of any legal support for her position that N.J.S.A. 39:6A-9.1 "requires a finding of comparative negligence or no comparative negligence[.]" Counsel responded that she was "not aware of any." The judge determined that American Trucking had the burden to demonstrate "that there was some fraud that was committed" in the arbitration in order to vacate the award, citing N.J.S.A. 2A:24-8.

The judge entered judgment in favor of IFA on November 13, 2009, and appended a statement of reasons, noting that the "scope of judicial review of [an] arbitration award, where one party seeks to confirm the award and the other seeks to vacate it, is severely limited. The award here may be vacated 'only in [the] case[] of fraud, corruption or similar wrongdoing as provided by the arbitration statute,'" again citing N.J.S.A. 2A:24-8.

Turning to the issues raised on appeal, we concur with American Trucking that the judge applied an incorrect statute to his review of the arbitration award. N.J.S.A. 2A:24-8 applies to arbitration of collective bargaining agreements. N.J.S.A. 2A:24-1.1 provides that "[N.J.S.A.] 2A:24-1 through [N.J.S.A.] 2A:24-11 shall only apply to an arbitration of disputes arising from a collective bargaining agreement or a collectively negotiated agreement."

American Trucking contends the judge should have applied N.J.S.A. 2A:23B-23, which is found in the version of the Uniform Arbitration Act adopted in New Jersey in 2003. N.J.S.A. 2A:23B-1 to -32; L. 2003, c. 95 (the 2003 Act). American Trucking refers particularly to the standard in that statute which provides that an arbitration award may be vacated if "an arbitrator has exceeded [his/her] powers." N.J.S.A. 2A:23B-23(a)(4). It argues that "the arbitrator exceeded his powers by issuing an award which is not recoverable under New Jersey law in that he failed ...

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