LONG V. LE v. MOTOR CLUB OF AMERICA INSURANCE COMPANY

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5580-04T15580-04T1

LONG V. LE,

Plaintiff-Appellant,

v.

MOTOR CLUB OF AMERICA INSURANCE

COMPANY,

Defendant-Respondent.

________________________________________________________________

 

Argued March 28, 2006 - Decided April 20, 2006

Before Judges Collester and Lisa.

On appeal from the Superior Court of New Jersey, Law Division, Essex County, L-2259-05.

James C. Mescall argued the cause for appellant (Mescall & Acosta, attorneys; Mr. Mescall, on the brief).

Frank W. Farrell argued the cause for respondent (Gutterman Markowitz & Klinger, attorneys; Christina M. Donahue, on the brief).

PER CURIAM

Plaintiff, Long V. Le, appeals from an order dismissing his complaint which sought vacation of an arbitration award. Plaintiff argues on appeal that the trial judge erred because the ruling by the arbitrator was procured by "undue means," see N.J.S.A. 2A:24-8a, because she directly disregarded the existing decisional law of the State of New Jersey. Plaintiff further argues that the arbitration should not have been dismissed for failure to satisfy the statute of limitations because defendant, Motor Club of America Insurance Company (MCA), was not prejudiced by the delay. We reject these arguments and affirm.

Plaintiff, while insured by MCA, was injured in an automobile accident on April 20, 2000. On December 6, 2001, plaintiff filed a two-count complaint. One count was against the tortfeasor seeking damages for his injuries. The second count was against MCA, seeking personal injury protection (PIP) benefits.

Plaintiff never caused a summons to be issued or service of process to be made on MCA. The complaint was administratively dismissed as to MCA for lack of prosecution, see R. 1:13-7(a), and plaintiff never sought to restore it. On September 10, 2003, plaintiff settled his liability claim against the tortfeasor, thus resulting in a dismissal of the remaining count of his civil action.

At some point, plaintiff had submitted a claim for PIP benefits to MCA, and MCA paid some benefits. The last payment made by MCA was on October 3, 2001.

On October 14, 2003, plaintiff filed a demand for arbitration against MCA with the American Arbitration Association (AAA). Among the defenses raised by MCA was failure to comply with the statute of limitations because the claim was filed more than two years after the last payment made. See N.J.S.A. 39:6A-13.1a. On April 19, 2004, the arbitrator issued an award in MCA's favor, denying plaintiff's claim because it was barred by the statute of limitations. She rejected plaintiff's argument that the previously filed civil complaint tolled the statute of limitations. She stated that if, for example, there was proof that the parties agreed to dismiss the PIP complaint and put it into AAA, the result might be different. In response to plaintiff's request for clarification of the award, the arbitrator issued a supplemental determination on June 19, 2004, reaffirming the prior award in its entirety. Plaintiff sought review from the AAA Appeal Panel. On January 13, 2005, the Panel affirmed the award, finding "that the arbitrator's decision that the mere filing of a complaint would not toll the statute of limitations was not an error of law."

On March 14, 2005, plaintiff filed a verified complaint and order to show cause against MCA seeking vacation of the arbitrator's award. He argued that the award was rendered by undue means because it was contrary to the law of the State of New Jersey. The matter was heard by Judge Donahue on May 13, 2005. At the conclusion of the hearing, the judge issued an oral decision rejecting plaintiff's argument and dismissing his complaint. Based upon the undisputed facts, the judge was satisfied that the arbitration demand was filed eleven days after the expiration of the statute of limitations. The judge was further satisfied that the earlier filing of a complaint, which was unserved upon MCA, unknown to MCA, and dismissed, did not serve to toll the statute of limitations. Therefore, the judge concluded that the arbitrator did not render the award based upon a mistake of law. The judge found it unnecessary to address plaintiff's arguments of lack of prejudice on the part of MCA.

On appeal, plaintiff repeats the same arguments that were rejected by the trial judge. He relies upon a series of cases in which courts considered whether there was prejudice to a defendant in determining whether to allow a civil action to proceed or, if previously dismissed, to be restored. See McLaughlin v. Bassing, 51 N.J. 410 (1968); Rivera v. Atl. Coast Rehab. & Health Care Ctr., 321 N.J. Super. 340 (App. Div. 1999); Mason v. Nabisco Brands, Inc., 233 N.J. Super. 263 (App. Div. 1989); Stanley v. Great Gorge Country Club, 353 N.J. Super. 475 (Law Div. 2002); Rogers v. Dubac, 52 N.J. Super. 360 (Law Div. 1958). These cases are inapposite. We are not dealing here with the continuation or restoration of the same action. Plaintiff's filing of a demand for arbitration constituted the filing of a new action in a different forum. These cases, therefore, do not provide authority for plaintiff's argument that the filing of his civil action in 2001 satisfied or tolled the statute of limitations with respect to the filing of his arbitration demand in 2003.

Arbitration is a favored form of dispute resolution in New Jersey, and arbitration awards are subject to judicial modification only on very narrow grounds. One such ground is if the award was procured by undue means. N.J.S.A. 2A:24-8a. This ground is established if the arbitrator made a mistake of fact or law that was apparent on the face of the award. Perini Corp. v. Greate Bay Hotel & Casino, Inc., 129 N.J. 479 (1992). This ground is also established if the arbitrator clearly exceeded the scope of the matter submitted. Shahmoon Indus. Inc. v. United Steel Workers of Am., 263 F. Supp. 10 (D.N.J. 1966).

The timeliness of the filing of the arbitration demand was clearly within the scope of the submission to AAA, and plaintiff does not argue otherwise. Plaintiff argues, however, that the arbitrator manifestly disregarded the law of New Jersey in determining that the filing of the civil complaint did not toll the statute of limitations. Plaintiff makes the simplistic argument that the only way to satisfy the statute of limitations is to file an action, which he did. He then reasons that once an action is filed, "the issue of prejudice, to the party who was not served promptly with the summons and complaint, must be analyzed."

We do not agree. It is true, of course, that the filing of an action within the statute of limitations satisfies the statute of limitations. But once that action is dismissed, it ceases to exist and its effect of satisfying the statute of limitations ends. Of course, if that action is restored after dismissal, the restoration relates back to the original filing date, and the claim is saved from being barred by the statute of limitations. See Rivera, supra, 321 N.J. Super. at 346; Mason, supra, 233 N.J. Super. at 267-70. This principle, however, does not apply when a new action is filed.

We therefore agree with the trial judge that plaintiff has failed to demonstrate that the arbitrator manifestly disregarded New Jersey law. Indeed, we are convinced the arbitrator correctly applied New Jersey law in arriving at her conclusion. We also agree with the trial judge that, because the statute of limitations was not satisfied by the filing of the arbitration demand eleven days late, any prejudice or lack of prejudice to MCA was immaterial. The judge correctly declined to consider whether there was prejudice.

 
Affirmed.

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A-5580-04T1

April 20, 2006