May 4, 2011
SANTOS I. RIVERA AND ANA RIVERA-RODRIGUEZ, PLAINTIFFS-APPELLANTS,
ALLSTATE INSURANCE COMPANY, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-4608-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 31, 2011
Before Judges Sabatino and Alvarez.
Plaintiffs Santos I. Rivera and Ana Rivera-Rodriguez appeal from an April 30, 2010 order denying their request for reconsideration of an earlier order, also being appealed, which dismissed without prejudice their complaint against defendant Allstate Insurance Company. Plaintiffs sought to compel payments pursuant to the personal injury protection (PIP) coverage under their automobile policy. The trial court dismissed the complaint because the policy, as permitted by N.J.S.A. 39:6A-5.1A, required resolution of such claims by "dispute resolution," or arbitration, as opposed to litigation. We affirm.
The Riveras' demand for PIP benefits results from injuries allegedly suffered in an August 1, 2009 collision. On November 11, 2009, defendant Allstate issued a letter denying the claim. Although it did not specify the basis for the company's conclusion that the Riveras had made fraudulent misrepresentations, Allstate later asserted that the claim was fraudulent because the Riveras were not mentioned in the accident report. The letter of denial says in pertinent part that our investigation has revealed significant discrepancies and misrepresentations regarding assertions you made in connection to facts pertaining to this loss. Accordingly, we hereby deny coverage to you because on page 5 of the Allstate New Jersey Auto Insurance Company policy, "Misrepresentation, Fraud or Concealment" the policy states: No coverage will be provided if: . . .
2. any insured person has made false statements or concealed any material fact or circumstance in connection with any claim for which payment is sought under this policy . . . .
The letter also noted that Allstate expressly reserved its right to proceed pursuant to the New Jersey Insurance Fraud Prevention Act, N.J.S.A. 17:33A-1 to -30.
After plaintiffs filed their complaint to compel coverage on December 10, 2009, Allstate moved to dismiss the action and force plaintiffs to arbitration. The matter was decided on the papers by Judge Fasciale on March 19, 2010.
In reliance upon Nationwide Mutual Fire Insurance Co. v. Fiouris, 395 N.J. Super. 156, 160 (App. Div. 2007), the trial court granted the application. In that case, we distinguished between disputes regarding entitlement to PIP benefits as opposed to questions regarding fraud in the procurement of a policy. Ibid. The former are resolved through arbitration, the latter via litigation.
Judge Fasciale also likened this dispute to the circumstances in State Farm Insurance Co. v. Sabato, 337 N.J. Super. 393 (App. Div. 2001). In Sabato, we concluded that PIP arbitration is required by statute, not just by policy terms, even where fraud is alleged by the insurer. Id. at 397-98. Such arbitration is the appropriate forum for resolution of "both factual and legal issues." Id. at 396. Judge Fasciale noted that although defendant indicated in its denial letter it was reserving the right to seek damages under the Insurance Fraud Prevention Act, that reservation had no effect upon an arbitrator's ability to resolve questions of fact, such as the dispute in this case. See Fiouris, supra, 395 N.J. Super. at 159-60; Sabato, supra, 337 N.J. Super. at 396-97. Accordingly, the judge granted defendant's application.
Thereafter, plaintiffs filed for reconsideration, which application was denied on April 30, 2010. Judge Fasciale found "plaintiff[s] failed to state with specificity the alleged incorrect law upon which the court relied or facts the court allegedly failed to consider" as required pursuant to Rule 4:49-2.
We concur with the trial judge's analysis, both as to the initial application and the motion for reconsideration. We affirm essentially for the reasons stated by Judge Fasciale in his March 19 and April 30, 2010 decisions rendered from the bench, and add only the following comments.
Initially, even though it arises after a dismissal without prejudice, the Riveras have the right to pursue this appeal. A dismissal resulting in a transfer to arbitration is appealable as is any other final order. R. 2:2-3(a)(3).
As Allstate correctly points out, the notice of appeal references only the reconsideration order. Rule 2:5-1(f)(3)(A) provides that in civil actions, the notice of appeal "shall set forth . . . the judgment, decision, action or rule, or part thereof appealed from[.]" Thus, "[w]hile the rule does not in terms so provide, it is clear that it is only the judgments or orders or parts thereof designated in the notice of appeal which are subject to the appeal process and review." Pressler & Verniero, Current N.J. Court Rules, comment 6.1 on R. 2:5-1 (2011) (citing 1266 Apt. Corp. v. New Horizon Deli, 368 N.J. Super. 456, 459 (App. Div. 2004); Fusco v. Newark Bd. of Educ., 349 N.J. Super. 455, 461-62 (App. Div.), certif. denied, 174 N.J. 544 (2002); Campagna v. American Cyanamid, 337 N.J. Super. 530, 550 (App. Div.), certif. denied, 168 N.J. 294 (2001); Sikes v. Twp. of Rockaway, 269 N.J. Super. 463, 465-66 (App. Div.), aff'd o.b. 138 N.J. 41 (1994)). Likewise, Rule 2:5-1(f)(2) requires a copy of the "final judgment, order, or agency decision appealed from" to be attached to the party's case information statement.
But plaintiffs filed the transcripts of both proceedings with the appeal, and the brief on the merits addressed the initial order as well as the reconsideration decision. We further note the Riveras' responding brief asserts that the omission of mention of the substantive order from the notice of appeal was a clerical error. We choose in any event to address the first order, not just the reconsideration order, because it is clear from their actual submissions that plaintiffs intended to appeal both. See N. Jersey Neuro Assocs., P.A. v. Clarendon Nat'l Ins. Co., 401 N.J. Super. 186, 196 (App. Div. 2008) (considering order not specified in notice of appeal where clear it was necessary to analysis of order included in notice).
The Riveras' substantive points are:
THE LAW DIVISION ERRED IN HOLDING ISSUES OF COVERAGE ARISING OUT OF FALSE STATEMENTS OR CONCEALMENT OF FACTS IN CONNECTION WITH PIP CLAIMS ARE ARBITRABLE SO LONG AS THE ALLEGED FRAUD IS UNRELATED TO THE PROCUREMENT OF THE PIP POLICY AS APPLIED TO THE FACTS IN THIS CASE.
A. Allstate denied coverage through its fraud provision; therefore the only appropriate forum to settle this dispute in coverage is litigation in Superior Court.
B. Allstate's insurance contract does not select alleged fraud as one of the "disputes" that it may choose to send to PIP arbitration thus the contract allows plaintiffs to choose Superior Court as their forum.
The fallacy which underpins plaintiffs' argument overall is the premise that Allstate is voiding the entire policy and not just refusing to make PIP payments. The law is clear that if the issuance of the policy itself was in dispute, such a conflict would not be arbitrable. See Fiouris, supra, 395 N.J. Super. at 160. Contrary to the Riveras' reading of the denial letter, however, Allstate did not shift its refusal to pay on account of the PIP claim into nullification of the policy in its entirety. Allstate did not assert fraud in the procurement of the policy. Since this is a dispute about payment of PIP benefits, even if Allstate raises fraud as a bar to payment of the claim, the matter must first be arbitrated.
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