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Tagayun v. United Healthcare of New Jersey, Inc.

Superior Court of New Jersey, Appellate Division

July 16, 2013

MYRNA B. TAGAYUN, M.D. & ROBERT S. MANDELL, Plaintiffs-Appellants,
v.
UNITED HEALTHCARE OF NEW JERSEY, INC., Defendant-Respondent.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 12, 2013

On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. SC-3354-11.

Robert S. Mandell argued the cause pro se.

Francis X. Manning argued the cause for respondent (Stradley, Ronon, Stevens & Young, attorneys; Mr. Manning, Marissa Parker and L. John Vassalotti, III, on the brief).

Before Judges Ostrer and Kennedy.

PER CURIAM

Plaintiffs appeal from an order of the Special Civil Part, Small Claims Section, dismissing their complaint on a book account without prejudice on the ground that the contract between the parties requires them to "submit the dispute to binding arbitration . . . ." Plaintiffs argue that the arbitration clause in the contract should not be enforced because the contract is "one of adhesion" and does not explicitly preclude resort to the courts; the Health Care Information Networks and Technologies (HINT) Act, N.J.S.A. 17B:26-9.1(d), and the Prompt Payment Act, N.J.S.A. 17B:30-26 to -34, preempt the arbitration clause by providing a right to individual physicians to file a suit against a carrier; and defendant failed to invoke the arbitration clause.

Plaintiff Myrna B. Tagayun, M.D., is a neurologist whose practice is run by her "business partner", plaintiff Robert S. Mandell. Tagayun entered into a contract with defendant to provide medical services to members of defendant's health plan. Defendant agreed to pay Tagayun in accordance with a specified fee schedule for services rendered to health plan members provided that, among other things, the fee claims were properly documented and submitted in a timely fashion.

The contract provides for various internal "dispute procedures" to be followed by the parties, and thereafter states, in pertinent part:

We will resolve all disputes between us by following the dispute procedures set out in our Administrative Guide. If either of us wishes to pursue the dispute beyond those procedures, they will submit the dispute to binding arbitration in accordance with the Commercial Dispute Procedures of the American Arbitration Association (see http://www.adr.org) within one year.
The arbitrator will not vary the terms of this agreement and will be bound by governing law. We both acknowledge that this agreement involves interstate commerce, and is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. The arbitrator will not have the authority to award punitive or exemplary damages against either of us, except in connection with a statutory claim that explicitly provides for such relief. Arbitration will be conducted in Essex County, NJ.

On April 4 and 23, 2011, Tagayun performed medical services for a member of defendant's health plan and on July 26, 2011, submitted to defendant fee claims of $850 for each day of service, for a total of $1700. Defendant acknowledged receipt of the claims, but requested copies of the patient's treatment records. Mandell thereafter provided documents to defendant.

When payment was not made by defendant, plaintiffs filed a Small Claims complaint against defendant on October 3, 2011, seeking payment of $1700 plus costs of suit. The matter was called in for trial on November 16, 2011. Plaintiffs briefly testified, as did a representative of defendant, who asserted that the fee claim was submitted late. Plaintiffs disputed that their fee claim was submitted late. The trial judge reviewed the contract between the parties and found that the contract required disputes to be resolved by binding ...


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