VINCENT GRIECO v. TRAVELERS OF NEW JERSEY INSURANCE COMPANY

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

VINCENT GRIECO,

Plaintiff-Respondent,

v.

TRAVELERS OF NEW JERSEY

INSURANCE COMPANY,

Defendant-Appellant.

__________________________________

February 26, 2015

Argued December 17, 2014 Decided

Before Judges Fuentes, Ashrafi and O'Connor.

On appeal from Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-0008-13.

Nghiem Pham argued the cause for appellant (Law Offices of Aloy O. Ibuzor, attorneys; Mr. Pham, of counsel and on the brief).

Joseph A. Massood argued the cause for respondent (Massood & Bronsnick, L.L.C., attorneys; Sarah E. Turk, on the brief).

PER CURIAM

Defendant Travelers Insurance Company of New Jersey appeals from an order that vacated an award rendered in its favor by a dispute resolution professional (DRP) pursuant to the Alternative Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -30. The DRP had rejected plaintiff Vincent Grieco's claim for PIP benefits, but the trial court vacated the award and ordered defendant to provide these benefits to plaintiff. We reverse.

I

Plaintiff was in a car accident on July 8, 2000, and on October 5, 2004. Plaintiff claims he sustained an injury in the 2000 accident that caused him to suffer lower back pain which radiated down his leg. He asserts the pain was present through 2001 and then completely subsided. After the 2004 accident, however, he claims the pain returned and argues the second accident aggravated an injury sustained in the first accident.1

After the 2004 accident, plaintiff's treating doctor, William Klempner, M.D., recommended he undergo a lumbar decompression. Plaintiff requested defendant to "precertify" the surgery, thus establishing the cost of the operation would be covered by PIP benefits. Defendant declined to certify the surgery because the no-fault medical examiner opined that, while the surgery was medically necessary, the condition for which surgery was required was not causally related to the 2004 accident. Plaintiff sought arbitration of his claim, which was presented to a DRP pursuant to APDRA. See N.J.S.A. 39:6A-5.1; N.J.A.C. 11:3-5.6.

Before the arbitration hearing, the matter was reviewed by a physician from a medical review organization (MRO), see N.J.S.A. 39:6A-5.1(d), who compared an MRI study of the lumbar spine taken approximately one month after the accident in 2000 to an MRI study taken two months after the 2004 accident. The physician discovered that, while plaintiff's spine showed degenerative changes, there was no objective evidence of any injury sustained in the 2004 accident that necessitated surgery.

At the hearing before the DRP, plaintiff argued that the recurrence of the same pain following the 2004 accident was proof the second accident aggravated the injury he sustained in the first accident. He asserted that the fact there was no mention of this complaint in his medical records for over two years before the 2004 accident corroborates that the 2004 accident aggravated a preexisting injury.

The DRP examined the notes Dr. Klempner put into plaintiff's medical records following the first accident and observed plaintiff characterized the pain in his back and leg as severe and at times debilitating. While acknowledging the last reference to this complaint in the medical record before the 2004 accident was in 2001, given the severity of the complaint, the DRP rejected the contention plaintiff's condition spontaneously resolved and found plaintiff has had this complaint since the accident in 2000.

In support of his opinion the 2001 medical records were unreliable, the DRP noted that Dr. Klempner wrote a report in 2008 that stated the pain plaintiff experienced in his back before the 2004 accident was "only . . . limited" and that the first time plaintiff experienced leg pain was after the 2004 accident. The DRP found the conflict between the doctor's statements in the 2008 report and what he jotted down in plaintiff's office chart in 2000 and 2001 irreconcilable.

More important, the DRP noted that plaintiff did not proffer any objective medical evidence establishing the 2004 accident aggravated a preexisting condition, see Bowe v. N.J. Mfrs. Ins. Co., 367 N.J. Super. 128, 138 (App. Div. 2004), and that plaintiff did not rebut the presumption that the MRO's physician's determination was correct, see N.J.S.A. 39:6A-5.1(d). Because of these two failures in his proofs, the DRP denied plaintiff's claim for PIP benefits.

Plaintiff filed a complaint in the Law Division pursuant to N.J.S.A. 2A:23A-13(a), in which he sought to vacate the DRP's award on the ground the arbitrator committed "prejudicial error by erroneously applying law to the issues and facts presented for alternative resolution." N.J.S.A. 2A:23A-13(c). Following a summary hearing, the trial court found that the arbitrator lacked any basis to conclude that plaintiff has continuously experienced the subject complaint since the accident in 2000. The trial court reasoned that the absence of any reference to such complaint in plaintiff's office chart indicated he did not have such complaint. The court also found that there was no conflict between Dr. Klempner's 2008 report and the notes he put into plaintiff's 2000 and 2001 office chart. The court did not address the arbitrator's finding that plaintiff failed to adduce any objective medical evidence showing the 2004 accident aggravated a preexisting condition and, further, that plaintiff failed to refute the MRO's physician's opinion.

Ultimately determining the arbitrator's decision was not based upon substantial evidence but, rather, the evidence supported plaintiff's position, the court vacated the award and ordered defendant to pay for the lumbar decompression.

II

An action to vacate, modify or correct an arbitration award under the APDRA is limited. An arbitrator's decision on the facts is final if supported by substantial evidence. N.J.S.A. 2A:23A-13(b). However, N.J.S.A. 2A:23A-13(c) provides that an award shall be vacated if the court finds

(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; or

(5) The umpire's committing prejudicial error by erroneously applying law to the issues and facts presented for alternative resolution.

Only subparagraph (5) is implicated here.

Once a court has vacated an award because of prejudicial error, the court must then make its own determination based upon the facts as found by the arbitrator, and confirm the award as modified. N.J.S.A. 2A:23A-13(f). After granting the order confirming, modifying or correcting an award, a judgment is to be entered in conformity with that order. No appeal of the judgment is permitted. N.J.S.A. 2A:23A-18(b).

In light of N.J.S.A. 2A:23A-18(b), the initial question here is whether we have jurisdiction to consider this appeal. Our Supreme Court has determined that, in general, N.J.S.A. 2A:23A-18(b) precludes appellate review; however, there are exceptions. Mt. Hope Dev. Assocs. v. Mt. Hope Waterpower Project, L.P., 154 N.J. 141, 185-86 (1998). One is when review is necessary to execute our "supervisory function over the courts." Ibid. In Morel v. State Farm Ins. Co., 396 N.J. Super. 472 (App. Div. 2007), we concluded it was appropriate to exercise our supervisory function when a trial court had exceeded its jurisdiction under the APDRA

Plaintiff was entitled to a ruling applying the relevant statutory standards. Had the judge made such a ruling, the proper course would be dismissal of the appeal under N.J.S.A. 2A:23A-18. But the statutory denial of a right to appeal to this court is based on the assumption that the trial judge will decide the case by applying the principles dictated by the Legislature. When a judge fails to carry out that legislative direction, as occurred here, our supervisory role requires consideration of the appeal and reversal and remand for application of the statutory standards. Otherwise, the statute would be rendered meaningless.

[Morel, supra, 396 N.J. Super. at 476.]

Therefore, if a trial court adheres to the statutory grounds in APDRA in reversing, modifying or correcting an arbitration award, and provides a rational explanation for how the arbitrator committed prejudicial error, see Fort Lee Surgery Ctr., Inc. v. Proformance Ins. Co., 412 N.J. Super. 99, 104 (App. Div. 2010), we have no jurisdiction and must dismiss the appeal. But if a trial court fails to limit its review of an arbitrator's decision to the grounds set forth in N.J.S.A. 2A:23A-13, we may review the matter and provide a remedy. N.J. Citizens Underwriting Reciprocal Exch. v. Kieran Collins, D.C., LLC, 399 N.J. Super. 40, 48 (App. Div.), certif. denied, 196 N.J. 344 (2008).

When examining a trial court's decision to determine if it exceeded its authority by vacating an award and, if so, the remedy to impose, certain principles must be kept in mind. First, as previously addressed, when considering an application to vacate an award, a trial court must defer to the arbitrator's decision on the facts if there is substantial evidence to support his or her decision. N.J.S.A. 2A:23A-13(b). The trial court does not have authority to vacate or modify an award merely because it would have decided the matter differently. N.J. Transit Bus Opers., Inc. v. Amalgamated Transit Union, 187 N.J. 546, 554 (2006). "[A trial] court may not substitute its own judgment for that of the arbitrator, regardless of the court's view of the correctness of the arbitrator's interpretation." Ibid.

Second, as a factfinder, an arbitrator is free to accept or reject proffered evidence. However, an arbitrator must defer to an MRO's physician's opinion unless rebutted by a preponderance of the evidence, see N.J.S.A. 39:6A-5.1(d), because such decision is "akin to [an] arbitrator []," and serves as "'an umpire appointed as a neutral' for the purposes of N.J.S.A. 2A:23A-13(c)(2)." Orthopaedic Assocs. v. Dep't of Banking and Ins., 405 N.J. Super. 54, 66 (App. Div. 2009) (quoting N.J.S.A. 2A:23A-13(c)(2)). Third, where a claimant alleges an aggravation of a pre-existing injury, the claimant must present objective medical evidence "from which a medical professional can form an opinion that the trauma suffered in the particular accident caused the aggravation." Bowe, supra, 367 N.J. Super. at 138.

Here, the trial court vacated the arbitration award because it disagreed with the arbitrator's conclusion that the absence of a complaint in a medical record does not mean the patient did not have such complaint. However, the trial court did not provide a rational explanation of how the arbitrator "committ[ed] prejudicial error by erroneously applying law to the issues and facts presented for alternative resolution." N.J.S.A. 2A:23A-13(c)(5). More important, the trial court overlooked and did not even address the principal issue before the arbitrator: whether there was objective medical evidence proving the 2004 accident aggravated a preexisting condition. In fact, there was no such evidence presented to the arbitrator, a significant reason the arbitrator rejected plaintiff's claim.

Plaintiff argues the absence of any complaint about his back and leg in Dr. Klempner's office notes for over two years before the 2004 accident is objective medical evidence. First, the arbitrator questioned the reliability of Dr. Klempner's records, but even if the arbitrator deemed such records trustworthy, the presence or absence of a patient's subjective complaints is not objective medical evidence. Second, there was medical evidence the arbitrator was bound to and did accept, and that was the MRO's physician's finding that there was no objective medical evidence linking the need for a lumbar decompression to the 2004 accident.

Accordingly, the trial court exceeded the jurisdictional parameters of the statute by vacating the award and, by exceeding its jurisdiction, we became vested with jurisdiction to exercise our supervisory function and review of the trial court's decision. The trial court lacked a basis to disturb the arbitrator's decision because it was supported by substantial evidence. Therefore, the trial court's order is reversed and the matter remanded for the entry of an order confirming the arbitration award.

1 The record reveals that plaintiff was also involved in an accident on January 9, 2007, but there is no indication any injuries he suffered in this accident are relevant to the issues raised in this appeal.