PANTANO & ROSSI CHIROPRACTIC CENTER, P.A. v. 21ST CENTURY INSURANCE GROUP

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4499-09T3

PANTANO & ROSSI CHIROPRACTIC

CENTER, P.A., a/s/o MARIA

RAMIREZ,

Plaintiff-Appellant,

v.

21ST CENTURY INSURANCE GROUP,

Defendant-Respondent.

________________________________________________________________

April 26, 2011

 

Submitted March 22, 2011 - Decided

 

Before Judges Baxter and Koblitz.

 

On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-0312-10.

 

Sean T. Hagan, attorney for appellant.

 

Shiriak & Timins, attorneys for amicus curiae National Arbitration Forum (Arthur J. Timins, on the brief).

 

Respondent 21st Century Insurance Group has not filed a brief.

 

PER CURIAM

Plaintiff Pantano & Rossi Chiropractic Center, P.A. (PRCC), as subrogee of Maria Ramirez, appeals from an April 16, 2010 Law Division Order that vacated a Personal Injury Protection (PIP) arbitration award in favor of PRCC, and remanded the matter to the National Arbitration Forum (NAF) for further proceedings. We agree with PRCC's assertion that the judge erred when he rejected the arbitrator's conclusion that a $250,000 PIP policy limit applied. We reverse, and remand for the entry of an order reinstating the arbitration award.

I.

On September 21, 2007, Maria Ramirez was involved in a motor vehicle accident and sustained various injuries. Approximately four days later, she came under the care of Drs. Raymond J. Lasko, D.C. and Victor Rossi, D.C. at PRCC. After an MRI, PRCC commenced chiropractic treatment and submitted invoices to Ramirez's automobile liability insurance carrier, defendant 21st Century Insurance Group, which, by virtue of N.J.S.A. 39:6A-4, also provided Ramirez with PIP benefits. Defendant assigned a claim number to the invoices submitted by PRCC, and paid some of the bills, but refused to pay others. As a result, a balance of $725 remained due and owing to PRCC. Ramirez executed an assignment of rights that authorized PRCC to proceed against defendant for payment of PRCC's unpaid bills.

On October 2, 2008, PRCC filed a demand for arbitration with the National Arbitration Forum (NAF) seeking an arbitration award of $725 plus attorney's fees. Other than a procedural question that has no bearing on the issues on appeal, only one issue was presented during the arbitration proceeding: whether Ramirez's PIP policy limit was $15,000 or $250,000. Defendant argued before the dispute resolution professional (DRP or arbitrator) that because Ramirez had selected a reduced benefit level of $15,000, her PIP benefits were exhausted because the $15,000 maximum had already been reached.

The evidence presented to the DRP at the arbitration hearing, and in a post-hearing document submission, established that Ramirez had not signed a Coverage Selection Form at any time prior to the accident. PRCC therefore maintained that in light of the provisions of N.J.S.A. 39:6A-3.2, 39:6A-4, and 39:6A-23, the mandatory PIP coverage of $250,000 was applicable because the insured, Ramirez, had not made a written request, on a Coverage Selection Form, for a reduced level of PIP benefits. PRCC maintained that unless an insured affirmatively chooses a reduced benefit level in writing, which Ramirez had not done, the mandatory $250,000 PIP benefit level applies.

In contrast, defendant argued that because Ramirez had requested the reduced PIP benefit level by telephone prior to the September 21, 2007 automobile accident, and had never rescinded that request, the $15,000 reduced PIP benefit level became operative. In a post-hearing submission, defendant produced a coverage selection form signed by a member of Ramirez's household on October 13, 2007, at the time Ramirez's policy with defendant was renewed. The October 13, 2007 renewal form shows a $15,000 PIP benefit level as the coverage selected.

In a January 13, 2010 written decision, the arbitrator noted defendant had conceded that it "did not have an actual written signed Coverage Selection Form for the policy at issue as the insured did not return a signed Coverage Selection Form." The arbitrator found that the "alleged telephone call" was not sufficient to bind the PIP coverage at the $15,000 level because, in keeping with the provisions of N.J.S.A. 39:6A-3.1, 39:6A-4 and N.J.A.C. 11:3-15.7(a), the $250,000 PIP benefit level is mandatory unless the insured selects a reduced level in writing, which Ramirez had not done. The arbitrator expressly rejected defendant's argument that the purported telephone conversation was the functional equivalent of an electronic signature. The arbitrator also observed that the written coverage selection form opting for the $15,000 reduced PIP benefit level had not been signed until after the accident, and was therefore irrelevant to his decision.

Having found that the $250,000 maximum PIP benefit applied, the arbitrator awarded PRCC $396.50,1 which was the full amount it had sought. The arbitrator also awarded attorney's fees in the amount of $1380 and costs of $225.

Pursuant to Rule 4:67-1 and N.J.S.A. 2A:23A-12(f), PRCC filed a summary action on January 18, 2010 to confirm the arbitration award. On February 11, 2010, defendant filed a brief in opposition to PRCC's complaint, in which defendant presented the same arguments it had raised before the arbitrator. At the conclusion of oral argument on March 26, 2010, the judge vacated the arbitration award and remanded the matter to the NAF for further proceedings.

In particular, the judge found that one of the statutory grounds for vacating an arbitration award had been satisfied, namely, N.J.S.A. 2A:23A-13(e)(4), which permits a court to vacate, modify or correct an award "if . . . [t]he rights of the party applying for the modification were prejudiced by the umpire erroneously applying [the] law to the issues and facts presented[.]" The judge reasoned that the applicable administrative regulations, when read in conjunction with the Uniform Electronic Transaction Act, N.J.S.A. 12A:12-1, "allows for the procedures that were used here" because the statute and regulation "recognized that this type of transaction can be conducted by telephone." Thus, according to the judge, "the coverage here was bound by phone" and Ramirez thereafter made "no attempt to modify or adjust the coverage."

Having concluded "there was an agreement to a $15,000 policy" and an "electronic signature" confirming that choice, the judge determined that the arbitrator "committed a prejudicial error" when he found otherwise. The judge therefore vacated the arbitration award. In his April 16, 2010 order, the judge not only vacated the award, but also added an additional provision, namely, he remanded the matter to NAF "for further proceedings consistent with this court's ruling that as a matter of law a reduced $15,000" PIP policy limit applied.

On appeal, PRCC argues: 1) defendant was procedurally barred from seeking to vacate the arbitration award as its request was untimely; 2) the judge erred in entertaining defendant's request to vacate the award as defendant had not exhausted its administrative remedies; 3) the trial court's interpretation of the law was incorrect because an insured is deemed to have selected the $250,000 PIP benefit level unless he or she requests otherwise in writing, and Ramirez had not done so; and 4) the administrative regulation on which the court relied should not have been interpreted to permit an insured to select a reduced PIP benefit level by telephone.

Amicus curiae NAF also urges us to reverse the order under review, although on more limited grounds. NAF argues that the court lacked the authority to remand the matter to the NAF for continued arbitration proceedings because a court's authority is limited to modifying, correcting or vacating an arbitration award; and the order of remand "by its nature, operates to [impermissibly] interject the court" into the arbitration process.

II.

PIP arbitration proceedings are conducted pursuant to the provisions of the New Jersey Alternative Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -30. Pursuant to the APDRA, the DRP is required to "make the award on all issues submitted for alternative resolution in accordance with applicable principles of substantive law." N.J.S.A. 2A:23A-12(e). APDRA is designed to assist in providing "prompt and efficient provision of benefits for all accident injury victims" and "minimiz[ing] resort to the judicial process." Gambino v. Royal Globe Ins. Co., 86 N.J. 100, 105-07 (1981). Accordingly, "[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).

In point one, PRCC argues that because defendant's request to vacate the arbitration award was untimely, the judge committed reversible error by entertaining it. N.J.S.A. 2A:23A-13(e) grants parties who participate in PIP arbitration forty-five days to secure modification of a PIP award when:

. . . .

 

(4) The rights of the party applying for the modification were prejudiced by the umpire erroneously applying [the] law to the issues and facts presented for alternative resolution.

 

Further, subsection (f) authorizes a court to vacate or modify an arbitration award if the arbitrator incorrectly applied the law:

Whenever it appears to the court to which application is made, pursuant to this section, either to vacate or modify the award because the umpire committed prejudicial error in applying applicable law to the issues and facts presented for alternative resolution, the court shall, after vacating or modifying the erroneous determination of the umpire, appropriately set forth the applicable law and arrive at an appropriate determination under the applicable facts determined by the umpire. The court shall then confirm the award as modified.

 

[N.J.S.A. 2A:23A-13(f).]

 

A party seeking to vacate, modify or correct an arbitration award is required to commence a summary action in the Superior Court "within 45 days after the award is delivered to the applicant . . . . The award of the umpire shall become final unless the action [to vacate, modify or correct the award] is commenced as required by this subsection." N.J.S.A. 2A:23A-13(a). Thus, if the party aggrieved by the arbitration award fails to file a summary action in the Superior Court within the forty-five day deadline required by N.J.S.A. 2A:23A-13(a), the award becomes final. Ibid.

In light of the provisions of that statute, we agree with plaintiff's contention that because defendant sought to vacate the arbitration award, defendant was required by the provisions of N.J.S.A. 2A:23A-13(a) to file a complaint and order to show cause within forty-five days of the issuance of the award. Plaintiff's own filing was unnecessary, and, in actuality, entirely superfluous, because had plaintiff not filed a summary action to confirm the arbitration award, it would have been confirmed automatically. Ibid.

Defendant should not have been permitted by the judge to, in effect, cure its own untimely filing by deeming its reply brief the legal equivalent of the filing of a summary action to vacate the award under N.J.S.A. 2A:23A-13(a). Because defendant's filing occurred fifty-three days after the award was rendered, it was untimely, and the court should have declined to consider it.

In light of that determination, we need not reach the additional arguments advanced by PRCC or the argument advanced by NAF that the judge lacked the authority to require the arbitrator to conduct further proceedings.

Reversed and remanded for the entry of an order reinstating the arbitration award.

1 The record does not explain the discrepancy between the amount sought, $396.50, and the amount of PRCC's unpaid bill, $725.