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Dr. Amrish Patel v. Liberty Mutual Insurance Company


June 20, 2012


On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Passaic County, L-377-11.

Per curiam.


Argued telephonically June 13, 2012 -

Before Judges Rodriguez and Reisner.

Intervenor Forthright appeals from a May 9, 2011 trial court order remanding an arbitration award to the arbitration forum for further proceedings, and an August 10, 2011 order denying Forthright's application to vacate the May 9 order.*fn1 We affirm.

This is what happened. Kevin Freeman was injured in an auto accident. He assigned his PIP claim to his treatment providers, Dr. Amrish Patel, Saddle Brook Surgicenter, and Ambulatory Anesthesia Group (collectively, plaintiffs), which sought arbitration when they could not resolve their claims with the insurer, Liberty Mutual Insurance Company. The dispute resolution professional (arbitrator) rendered a decision adverse to plaintiffs, without considering a document packet, dated March 3, 2009 that plaintiffs' attorney had submitted. Even though plaintiffs' counsel offered to submit hard copies at the arbitration hearing, the arbitrator would not consider them because he believed they had not been electronically filed according to the rules of the National Arbitration Forum (NAF). While acknowledging that the missing documents could be "crucial" to the decision of the case, the arbitrator refused to consider them and instead rendered a decision that plaintiffs had failed to prove that the accident caused the injuries for which Freeman had received medical treatment.

On plaintiffs' application to the Law Division to vacate the award, both sides agreed that the documents had in fact been uploaded to the NAF system; the arbitrator simply could not locate them in the system. Both sides agreed that the arbitrator had decided the case adversely to plaintiff on an incomplete record, and both sides agreed that the proper remedy was for the Law Division judge to remand the case to the arbitrator for reconsideration, including consideration of the March 3 document package. Not surprisingly, the judge granted that application, pursuant to N.J.S.A. 2A:23A-13c and -14.

Thereafter, Forthright filed a motion to intervene and set aside the May 9 order, arguing that the Law Division could not remand the matter to the arbitrator. The argument before Judge Ralph DeLuccia focused on N.J.S.A. 2A:23A-13 and -14. Section 13 permits an application to vacate, modify or correct an arbitration award and sets forth the grounds on which such an application may be granted. It provides in pertinent part:

a. A party to an alternative resolution proceeding shall commence a summary application in the Superior Court for its vacation, modification or correction within 45 days after the award is delivered to the applicant, or within 30 days after receipt of an award modified pursuant to subsection

d. of section 12 of this act, unless the parties shall extend the time in writing. The award of the umpire shall become final unless the action is commenced as required by this subsection.

b. In considering an application for vacation, modification or correction, a decision of the umpire on the facts shall be final if there is substantial evidence to support that decision; provided, however, that when the application to the court is to vacate the award pursuant to paragraphs (1),

(2), (3), or (4) of subsection c., the court shall make an independent determination of any facts relevant thereto de novo, upon such record as may exist or as it may determine in a summary expedited proceeding as provided for by rules adopted by the Supreme Court for the purpose of acting on such applications.

c. The award shall be vacated on the application of a party who either participated in the alternative resolution proceeding or was served with a notice of intention to have alternative resolution if the court finds that the rights of that party 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, unless the party applying to vacate the award continued with the proceeding with notice of the defect and without objection. [Ibid.]

Section 14 addresses the remedies the court may order upon vacating an arbitration award:

Upon vacating an award pursuant to section 13, . . . the court may order a rehearing and determination of all or any of the issues, either before the same umpire, having due regard for whether the award was vacated by reason of the actions of the umpire which were violative of paragraph (1), (2), (3), or (4) of subsection c. of section 13 or before a new umpire appointed in accordance with the alternative resolution agreement of this act.

Construing N.J.S.A. 2A:23A-13 and -14 in pari materia, and in light of the purpose of the PIP statute to provide a swift resolution of medical billing disputes, Judge DeLuccia rejected Forthright's argument that N.J.S.A. 2A:23A-13 required the court to hold a de novo summary proceeding to decide the merits of the case. Instead, he concluded that where the arbitrator failed to properly carry out his duties by refusing to consider some of the evidence, the statutory scheme authorized the Law Division to remand the matter to the arbitrator for further consideration.

The judge reasoned that, where an arbitrator fails or refuses to consider evidence properly placed before him, the most sensible and efficient course of action would be to remand the matter to that arbitrator, who would already be familiar with the case, instead of vacating the award entirely and requiring the parties to start the arbitration process over before a new arbitrator. He also reasoned that, because there is no verbatim record of the arbitration, a judge could not summarily decide the matter, pursuant to section 13, but instead would potentially have to re-hear the entire dispute, an inefficient and time-wasting process, inconsistent with the underlying purpose of the PIP statute.

On this appeal, Forthright once again argues that N.J.S.A. 2A:23A-13 does not allow remands and that N.J.S.A. 2A:23A-14 does not apply to PIP arbitrations. This contention is utterly without merit. The regulations of the Department of Banking and Insurance, the agency entrusted with enforcing the PIP arbitration scheme, N.J.S.A. 39:6A-5.1b, specifically provide that "[t]he final determination of the dispute resolution professional shall be binding upon the parties, but subject to vacation, modification or correction by the Superior Court in an action filed pursuant to N.J.S.A. 2A:23A-13 for review of the award." N.J.A.C. 11:3-5.6(f). Plainly, an action "filed pursuant to N.J.S.A. 2A:23A-13" includes the remedies authorized by that statute, which are set forth in N.J.S.A. 2A:23A-14.

The court's power to remand a case to an arbitrator "for reconsideration or clarification" in limited circumstances, was recognized in Tretina Printing, Inc. v. Fitzpatrick & Assocs., Inc., 135 N.J. 349, 353-64 (1994). It is essentially codified in section 14 which allows a judge to vacate and remand a matter to the arbitration forum for "re-hearing" on some or all issues. We infer that permits a remand for "re-hearing" concerning evidence that an arbitrator improperly failed to consider. We agree with Judge DeLuccia that allowing such a limited remand serves the purpose of the PIP statute to expeditiously resolve disputes so that the medical bills of injured accident victims are promptly paid. See Allstate New Jersey Ins. Co. v. Neurology Pain Assocs., 418 N.J. Super. 246, 261 (App. Div. 2011).

Forthright's arguments on this appeal warrant no further discussion here, R. 2:11-3(e)(1)(E), and we affirm substantially for the reasons set forth in Judge DeLuccia's opinion.


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