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Citizens United Reciprocal Exchange v. New Jersey Back Institute

April 24, 2012

CITIZENS UNITED RECIPROCAL EXCHANGE, PLAINTIFF-RESPONDENT,
v.
NEW JERSEY BACK INSTITUTE, DEFENDANT-APPELLANT.
CITIZENS UNITED RECIPROCAL EXCHANGE, PLAINTIFF-APPELLANT,
v.
NEW JERSEY BACK INSTITUTE, DEFENDANT-RESPONDENT.



On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1034-11.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted January 30, 2012

Before Judges Sabatino and Ashrafi.

These appeals arise from arbitration of a dispute about payment of personal injury protection (PIP) benefits after a motor vehicle accident. See N.J.S.A. 39:6A-5, -5.1, -5.2. Defendant New Jersey Back Institute (the Back Institute), a medical provider, prevailed in arbitration pursuant to the Alternative Procedure for Dispute Resolution Act (the Act), N.J.S.A. 2A:23A-1 to -19, against plaintiff Citizens United Reciprocal Exchange (CURE), an insurance carrier. Both parties appeal from orders of the Law Division entered after the arbitration.

In A-5221-10, the Back Institute appeals from an order of May 27, 2011, which confirmed the arbitration award but denied its application for attorney's fees. In A-5285-10, CURE appeals from an order of March 24, 2011, which denied its application to vacate the arbitration award, and the order of May 27, 2011, to the extent it confirmed the award. Addressing the appeals together, we affirm both orders.

I.

CURE provided automobile insurance coverage including PIP benefits to its insured, Daniel Gomez. Gomez suffered injuries in a motor vehicle accident. The Back Institute treated his injuries, including surgery that was pre-approved by CURE and performed on May 19, 2009. When the Back Institute submitted its charges of $60,000 for reimbursement, CURE paid only $12,412.79 plus $287.19 interest, and it declined to pay the balance of the amount charged.

In September 2009, the Back Institute, as assignee of Gomez, filed a demand for arbitration against CURE under the Act. The parties engaged in an arbitration hearing conducted by the National Arbitration Forum. On December 15, 2010, the dispute resolution umpire issued a written decision awarding $32,587.26 in medical fees to the Back Institute, plus attorney's fees of $1,300 for the arbitration proceedings and costs of $231.15.

Contending that the umpire misapplied the law and made an excessive award, CURE filed a complaint and an order to show cause in the Law Division to vacate the arbitration award. The Back Institute filed an answer seeking confirmation of the award and its attorney's fees incurred in the Law Division action. After oral argument on March 24, 2011, the Law Division placed on the record its oral decision at a time when counsel were not present. The court concluded that the umpire did not err, it confirmed the arbitration award, and it ruled that each party would pay its own attorney's fees for the proceedings in the Law Division. The court's accompanying March 24, 2011 order indicated denial of CURE's application to vacate the award, but it contained no provision regarding the ruling on attorney's fees.

On May 2, 2011, the Back Institute filed a motion for attorney's fees. Counsel were then directed to the transcript of the March 24, 2011 oral decision by which the court had already denied the application for attorney's fees. By order and written decision on May 27, 2011, the Law Division again denied the application for attorney's fees based on two grounds:

(1) the "American rule" would apply, by which each party bears its own costs of litigation, and (2) the motion for attorney's fees was actually a motion for reconsideration of the court's March 24, 2011 ruling, and the motion was not timely filed within the twenty-day deadline of Rule 4:49-2.

II.

We address first the appeal of CURE in A-5285-10 seeking to vacate the ...


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