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Mary Delgrande v. New Jersey Manufacturers (Njm) Insurance Group

July 23, 2012


On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-1700-09.

Per curiam.


Argued January 24, 2012 -

Before Judges Messano and Yannotti.

On March 17, 2005, plaintiff Mary Delgrande was injured in an automobile accident when her vehicle was struck from behind by a car driven by Donald Coords. Plaintiff filed a personal injury action against Coords in March 2006.

While that litigation was pending, plaintiff filed suit against her insurer, defendant New Jersey Manufacturers Insurance Group (NJM), seeking personal injury protection (PIP) benefits under her policy. The record does not include this complaint or NJM's answer, but, it is undisputed that the parties settled the litigation in October 2007, the release providing that plaintiff "retain[ed] all legal rights to pursue any claims relating to . . . future medical care, including challenging any denials by NJM for services or payment."

A dispute again arose between plaintiff and NJM regarding the payment of five bills submitted by various medical providers that rendered treatment between December 2007 and June 2008. The matter was submitted to the National Arbitration Forum (NAF), and the dispute resolution professional (DRP) was asked to determine whether these services were "reasonable and medically necessary" as a result of the accident.

On October 8, 2008, following consideration of the documentary evidence and plaintiff's testimony, the DRP concluded that the treatment reflected in only one of the five disputed bills -- a December 2007 re-evaluation by plaintiff's treating orthopedist -- "arose out of injuries sustained in the subject accident." Payment of the remaining four bills -- which dealt with diagnosis and treatment of neck and upper back pain and involved significantly greater monetary amounts -- was denied. The DRP entered an award in plaintiff's favor for $120 together with costs and counsel fees.

On September 17, 2009, plaintiff filed suit against NJM seeking PIP benefits associated with cervical surgery performed in 2009, alleging it was related to the 2005 motor vehicle accident. On October 23, plaintiff filed an amended complaint naming United Healthcare Insurance Company (United) as an additional defendant. The amended complaint alleged that United, which administered an employee medical benefit plan (the plan) through plaintiff's employer "[was] asserting a medical lien on the proceeds" of plaintiff's suit against Coords. It was undisputed that United had paid a total of $93,733.24 in medical benefits on plaintiff's behalf. Among the relief sought in her amended complaint, plaintiff requested declaratory judgment that her "cervical surgery [wa]s causally related" to the accident.

Before either defendant answered, plaintiff settled her suit against Coords for $250,000. She executed a release in that action on November 16, 2009.

On December 17, 2009, NJM filed its answer and asserted a cross-claim against United seeking declaratory relief that United could not assert any lien without establishing its right to do so under the terms of the plan. On May 14, 2010, United filed its answer and asserted a counterclaim against plaintiff. In particular, United alleged that under the terms of the plan, it was entitled to an "equitable lien/constructive trust upon that portion of [plaintiff's] settlement proceeds which represent money owed to [United] for the paid medical benefits . . . ."

Thereafter, NJM moved to dismiss the complaint contending that plaintiff was required to submit the dispute to arbitration pursuant to N.J.S.A. 39:6A-5.1. The motion judge agreed and entered an order on August 27 dismissing the complaint as to NJM without prejudice, and ordering plaintiff to "re-file a demand with [NAF] . . . ." Plaintiff did so on September 14.*fn1

Plaintiff then moved for summary judgment against United, and United, in turn, cross-moved for summary judgment dismissing plaintiff's complaint. In a written opinion, a different motion judge concluded that "[u]nder the terms of the plan, [plaintiff] must pay the monies she recovered in her lawsuit to reimburse the [p]lan for the medical benefits paid on her behalf." He entered orders denying plaintiff's summary judgment motion and granting United summary judgment. This appeal followed.

Plaintiff argues that: (1) the first motion judge's order dismissing her complaint and compelling arbitration against NJM was inequitable because it forced plaintiff to litigate the same issue in two different forums; (2) the second motion judge erred by granting summary judgment to United because genuine issues of material fact exist; and (3) in the event we affirm the order as to NJM, and reverse as to United, all parties should be compelled to participate in the NAF arbitration. We have considered these arguments in light of the record and applicable legal standards. We affirm.


Plaintiff contends that it was error to dismiss her complaint against NJM and compel arbitration because the critical issue of causation could be decided inconsistently in two different forums, leading to an inequitable result. We disagree.

Because the decision to compel arbitration was based solely on an issue of law, our review is de novo. Cole v. Jersey City Med. Ctr., 425 N.J. Super. 48, 56 ...

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