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Allstate Insurance Company v. Richard Simone

August 18, 2011


On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-3642-08.

Per curiam.


Argued June 8, 2011

Before Judges Axelrad and Lihotz.

Plaintiff Allstate Insurance Company filed a recovery action pursuant to the New Jersey Insurance Fraud Prevention Act (IFPA), N.J.S.A. 17:33A-1 to -30, seeking repayment of medical benefit reimbursements it remitted to defendant Richard Simone under the terms of his personal injury protection (PIP) policy. Plaintiff also sought treble damages, counsel fees and costs of its investigation. Plaintiff based its claims on the fact that the expenses had already been paid under a separate health insurance policy and defendant received a prohibited double recovery. Defendant responded he was entitled to the benefits based on the statute in force at the time of his accident. The trial court disagreed and awarded summary judgment to plaintiff. We affirm the court's finding that defendant violated the IFPA; however, we reverse the trial court's entry of summary judgment based on an incorrect conclusion that defendant received a prohibited double recovery. The matter is remanded to the trial court for additional proceedings consistent with our opinion.

These facts are taken from the summary judgment record. Defendant suffered injuries resulting from an automobile accident on December 14, 1981. He was insured under an automobile insurance policy issued by plaintiff, which contained a PIP clause that stated plaintiff would pay basic benefits consisting of "medical expense benefits," defined as all reasonable expenses incurred for medical, surgical and dental treatment, professional nursing, hospital and rehabilitation services, x-ray and other diagnostic services, prosthetic devises, ambulance services, medication and other reasonable and necessary expenses incurred for treatment prescribed by persons licensed to practice medicine, surgery, psychology or chiropractic . . . . [(emphasis added).]

Plaintiff declined defendant's request for payment of expenses related to his personal injuries until ordered to do so by the Law Division in a declaratory action filed by defendant (L-041868-83). The judgment required plaintiff to "pay for future prescriptions for medications for pain and depression as prescribed by [defendant's] treating physicians. This obligation shall be a continuing obligation for as long as such medications are medically necessary as determined by [defendant's] treating physicians."

Since his accident, defendant has been prescribed medication for pain management for which he sought reimbursement from plaintiff. Sometime in 1988, defendant retired, opting to accept a reduced pension benefit in exchange for the provision of health insurance coverage. The medical coverage administered by Caremark included a $1500 deductible. Prescription costs are paid by the plan subject to defendant's responsibility for a $10 to $20 co-payment. Defendant's pharmacy invoiced the insurance carrier directly.

From 2000 through 2005, while covered by the above-described prescription coverage, defendant filed six claims with plaintiff for reimbursement of the full cost of the prescription for Talwin, a pain medication, taken for symptoms associated with the 1981 automobile accident. As support for the claims, defendant attached what purported to be records from Boyd's Pharmacy where he filled his prescriptions. Plaintiff paid each claim, totaling $18,413.31.

Although the documents accompanying his claims to plaintiff originated from the pharmacy, defendant admitted he altered the pharmacy's actual receipts to replace the co-pay amounts he paid with the total medication costs. Defendant explained he did not submit claims to plaintiff for every drug he was prescribed, but only those for which he would receive sufficient compensation for the costs of his health insurance.

Steve Hazen, the owner of Boyd's Pharmacy, certified that the documents submitted to Allstate were not from his pharmacy and he never signed the invoices submitted to plaintiff. Defendant denies forging Hazen's signature and affirmed he merely modified the amount paid.

Plaintiff moved for summary judgment and defendant filed a cross-motion for partial summary judgment on his counterclaim that sought reimbursement for additional expenses. Following oral argument, the motion judge denied plaintiff's motion, and granted defendant's. Plaintiff moved for reconsideration and the court again allowed oral argument. On May 26, 2010, the motion judge entered an order granting plaintiff relief by vacating the relevant portions of his earlier order, and awarding plaintiff compensatory damages of $16,443.05, treble damages, and attorney fees and costs. Defendant appealed.

A motion for summary judgment must be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits . . . show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). Whether issues of material fact are in dispute is ascertained by examining "the competent evidential materials presented, when viewed in the light most favorable to the non-moving party," to determine whether they "are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party[.]" Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). "The law is well settled that '[b]are conclusions in the pleadings without factual support in tendered affidavits, will not defeat a ...

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