On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-3175-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Messano, Waugh, and St. John.
Third-party defendant Allied Professionals Insurance Company (Allied) appeals the Law Division's orders refusing to compel arbitration and finding that a malpractice insurance policy issued by Allied covers claims asserted by plaintiff David Roundtree against defendant/third-party plaintiff Justin Bean in the underlying action. We reverse and remand for arbitration.
We discern the following facts and procedural history from the record on appeal.
Roundtree was involved in an automobile accident in 2005 and claimed that he suffered injuries as a result. He sought medical treatment from his PIP carrier. The PIP carrier eventually sent Roundtree for an independent medical evaluation (IME) by an acupuncturist. Bean, an acupuncturist who had never treated Roundtree, performed the IME. He prepared an IME report concluding that Roundtree did not need any further acupuncture treatment. According to Roundtree, Bean's IME report contradicted his oral statements to Roundtree during the IME.
On September 18, 2008, Roundtree filed a complaint against Bean and others. With respect to Bean, Roundtree alleged negligent representations, negligent record keeping, negligent examination, negligent reporting, professional malpractice, breach of contract, misrepresentations, and violations of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -184.
At the time the IME was performed, Bean was covered by a professional liability insurance policy issued by Allied. The policy contained the following general condition relevant to this appeal:
C. Arbitration. If a dispute or claim shall arise with respect to any of the terms or provisions of this Policy, or with respect to the performance by any of the parties to the Policy, then any party or that party's authorized representative may, by notice as herein provided, require that the dispute be submitted within fifteen (15) days to an arbitrator in good standing with the American Arbitration Association under the Commercial Arbitration Rules of the American Arbitration Association then in effect. Any arbitration undertaken pursuant to the terms of this section shall be governed by the Federal Arbitration Act and shall occur in Orange County, California.
On October 20, 2008, Bean made a claim for defense and indemnification
under the Allied policy. Allied denied coverage on October 31, 2008,
stating that "no acupuncture patient
relationship or Professional Services are alleged at all and no injury
is alleged at all." In a later letter, Allied again insisted that
"there can be no Professional Services, as defined, without an
acupuncture/patient relationship." Bean and Allied exchanged letters
and telephone calls concerning coverage, but Allied continued to
maintain that the policy did not cover any of Roundtree's claims.
On January 27, 2009, Bean filed a third-party complaint against Allied in the Roundtree action, seeking a declaratory judgment that Allied's policy provided coverage and that he was entitled to a defense of Roundtree's complaint. Bean also sought reimbursement of costs related to his defense in the underlying action, as well as counsel fees and costs related to the declaratory judgment action.
Roundtree's underlying action against Bean was dismissed with prejudice in February 2009. However, Bean's third-party action was excluded from that dismissal. On February 23, 2009, Allied wrote to Bean ...