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Citizens United Reciprocal Exchange v. Robert Wood Johnson University Hospital


March 2, 2012


On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1896-10.

Per curiam.


Telephonically Argued: February 9, 2012

Before Judges Cuff, Waugh and St. John.

This appeal arises from the medical treatment provided by defendant Robert Wood Johnson Hospital (RWJH) to a person insured by plaintiff Citizens United Reciprocal Exchange, commonly known as CURE.*fn1 Plaintiff contended it did not owe personal injury protection (PIP) benefits to its insured. Plaintiff appeals from an order affirming an arbitration award in favor of RWJH requiring plaintiff to pay $162,714.70 plus attorneys' fees and costs to RWJH. We affirm.

RWJH submitted to arbitration its request for payment for in-patient services provided to CURE's insured. CURE asserted that it rescinded its insured's policy due to material misrepresentations in his renewal application and during the post-accident investigation. The Dispute Resolution Professional (DRP) entered an award in favor of RWJH. In a comprehensive opinion, the DRP found "insufficient competent credible evidence that [the insured] knowingly and willfully provided false information or concealed information pertinent to the carrier's assessment of risk or investigation of the loss." CURE sought review in the Superior Court pursuant to N.J.S.A. 2A:23A-13c(5). CURE argued legal error by the DRP. Judge Pereksta disagreed and affirmed the award.

CURE seeks review of the January 13, 2011 order affirming the arbitration award. It argues that this court has jurisdiction to review the Law Division order because the DRP committed legal error and actions predicated on fraud permit this court to exercise its appellate jurisdiction. RWJH responds that the Alternative Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -30, prohibits appellate review absent circumstances in which the judge failed to provide an appropriate review or an issue of strong public policy requires review. RWJH argues this case does not fall within either exception. We agree.

APDRA was enacted in 1987 to create a new procedure for dispute resolution. Mt. Hope Dev. Assocs. V. Mt. Hope Waterpower Project, L.P., 154 N.J. 141, 145 (1998). The express intention of the procedure is "to provide a speedier and less expensive process" for the resolution of disputes. Governor's Reconsideration and Recommendation Statement to Assembly Bill No. 296, at 1 (Jan. 7, 1987), reprinted at N.J.S.A. 2A:23A-1. A critical element of the procedure is a summary application in the Superior Court to vacate, modify or correct an award within forty-five days after delivery of the award. N.J.S.A. 2A:23A-13a. Any action in the Superior Court to vacate, modify or correct an arbitration award shall be conducted in a summary manner and on an expedited basis. N.J.S.A. 2A:23A-19. In addition, the APDRA severely limits the bases on which an award may be vacated, modified or corrected. N.J.S.A. 2A:23A-13c provides that a decision on the facts by the DRP is final unless the party seeking review demonstrates the rights of the party seeking review were prejudiced by

(1) Corruption, fraud or misconduct in procuring the award;

(2) Partiality of an umpire appointed as a neutral;

(3) In making the award, the umpire's exceeding their power or so imperfectly executing that power that a final and definite award was not made;

(4) Failure to follow the procedures set forth in this act, . . . or

(5) The umpire's committing prejudicial error by erroneously applying law to the issues and facts presented for alternative resolution. [N.J.S.A. 2A:23A-13c.]

Finally, the parties to an alternate dispute resolution agreement subject to the APDRA expressly waive their right to review in this court or the Supreme Court, N.J.S.A. 2A:23A-2, -18b, and -19; Mt. Hope, supra, 154 N.J. at 148, unless the party seeking review alleges "rare circumstances" grounded in public policy or circumstances requiring exercise of our supervisory function, Mt. Hope, supra, 154 N.J. at 152.

This court has held that a circumstance requiring exercise of our supervisory function includes action by a trial judge that departs from the relevant statutory standards. N.J. Citizens Underwriting Reciprocal Exch. v. Collins, 399 N.J. Super. 40, 48 (App. Div.), certif. denied, 196 N.J. 344 (2008); Morel v. State Farm Ins. Co., 396 N.J. Super. 472, 476 (App. Div. 2007). A matter affecting the best interests of a child will also be subject to review beyond the statutory grounds for vacation or modification. Mt. Hope, supra, 154 N.J. at 152.

It is appropriate for this court to exercise our appellate jurisdiction when the judge does not limit her review of the order to the grounds set forth in N.J.S.A. 2A:23A-13. When the judge expands the scope of her review or considers issues not raised by the parties, we will exercise our supervisory power to remedy the error. Morel, supra, 396 N.J. Super. at 476. When, however, the trial judge adheres to the statutory standard in affirming, vacating, modifying or correcting an arbitration award, we have no jurisdiction to review the decision. N.J. Citizens, supra, 399 N.J. Super. at 48.

Moreover, as demonstrated in N.J. Citizens, the mere involvement of insurance and allegations of fraud do not permit appellate review. There, the insurer alleged that the insured materially misrepresented his marital status, the number of people residing in his home, and the number of persons operating the vehicle. Id. at 43. We confined our review to whether the judge remained within the confines of N.J.S.A. 2A:23A-13c(5). Id. at 50. Once we were satisfied that the judge "steered a course well within the confines of [the statute]," we declined to intervene and dismissed the appeal. Ibid. Similarly, when a judge vacated an award due to prejudicial error and explained in an opinion the basis for that holding, we found no basis to invoke our supervisory function and dismissed the appeal. Fort Lee Surgery Ctr., Inc. v. Proformance Ins. Co., 412 N.J. Super. 99, 104 (App. Div. 2010). Accord Riverside Chiropractic Grp. v. Mercury Ins. Co., 404 N.J. Super. 228, 240 (App. Div. 2008).

Here, our review of the award by the DRP reveals that it is supported by substantial evidence, N.J.S.A. 2A:23A-13b, and CURE cannot demonstrate that it was prejudiced by an erroneous application of the law to the issues and facts presented for review. Judge Pereksta's finding, that the reference by the DRP to the absence of an intention to obtain a benefit by the insured should be considered dicta, is well-founded.

Therefore, finding no basis to invoke our supervisory function and no rare circumstance grounded on public policy to invoke our appellate jurisdiction, this appeal of the January 13, 2011 order is beyond our jurisdiction and the appeal is dismissed.


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