HEATHER ADCOX v. ENCOMPASS INSURANCE COMPANY

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1863-05T21863-05T2

HEATHER ADCOX,

Plaintiff-Appellant,

v.

ENCOMPASS INSURANCE COMPANY,

Defendant-Respondent.

______________________________

 

Argued August 29, 2006 - Decided October 18, 2006

Before Judges Payne and Gilroy.

On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-3870-05.

Sharon B. Kessel argued the cause for appellant (Blume, Goldfaden, Berkowitz, Donnelly, Fried & Forte, attorneys; Michael B. Zerres, of counsel; Brian E. Mahoney, on the brief).

Brian J. Convery argued the cause for respondent (Hardin, Kundla, McKeon and Poletto, attorneys; Stuart S. Kline, of counsel and on the brief).

PER CURIAM

Plaintiff, Heather Adcox, appeals from an order of the Law Division entered on November 7, 2005, that denied her complaint seeking vacation of a Personal Injury Protection (PIP) alternative dispute resolution award pursuant to N.J.A.C. 11:3-5.6(f) and N.J.S.A. 2A:23A-13. We affirm.

On January 31, 2000, plaintiff, while driving her automobile, was involved in an accident with a vehicle operated by Gail McCarroll, causing injuries to plaintiff's back. At the time of the accident, plaintiff was insured for PIP benefits under a policy of insurance issued by defendant, Encompass Insurance Company. On April 18, 2000, Dr. James Cahill wrote a prescription prescribing "aqua therapy modalities." The prescription, however, was silent as to the type of modalities prescribed. On May 24, 2000, plaintiff underwent a three-level discogram at the T12-L1, L1-2, and L2-3 levels, during which she suffered seizures, causing her to be hospitalized for a period of eleven days. Plaintiff instituted a personal injury automobile negligence action against the tortfeasor McCarroll. Combined with the automobile action, plaintiff asserted a medical malpractice action against the doctor who had performed the discogram, alleging that the doctor had negligently injected radiographic contrast material into the subarchnoid space that migrated to her brain, causing plaintiff to suffer status-epilepticus, resulting in permanent traumatic brain injury and neuropsychological dysfunction.

In July 2000, plaintiff purchased a Thermospa hot tub and had it installed in her home. On or about February 7, 2004, plaintiff had a medical alert system installed in her home. On February 24, 2004, plaintiff obtained a prescription from Dr. Avery Katz, a neurologist, who had followed plaintiff as an outpatient after she was discharged from the hospital following the discogram procedure, that prescribed "hot tub" treatment for back spasms.

On October 27, 2004, plaintiff filed a demand for dispute resolution with the National Arbitration Forum (NAF) claiming reimbursement for the cost of the purchase, installation, and maintenance fees for the hot tub and medical alert system, as well as for the cost of other medical and pharmaceutical charges. Defendant opposed reimbursement for the expenses pertaining to the hot tub and medical alert system, contending that plaintiff had failed to prove that the expenditures were reasonable and necessary expenses for treatment of injuries sustained in the automobile accident. The dispute resolution hearing was conducted on March 1, 2005. On March 7, 2005, the NAF issued a letter advising that the parties could submit post-hearing submissions in support of their respective positions, requesting plaintiff's submission on or before March 13, 2005, and defendant's submission on or before March 23, 2005. On March 11, 2005, plaintiff submitted a post-hearing submission directly to the dispute resolution professional (DRP), who had conducted the hearing, and to counsel for defendant. Plaintiff's submission included copies of the police report from the motor vehicle accident of January 31, 2000, together with the following documents from plaintiff's medical malpractice action: two reports from Dr. Sanford H. Davne, plaintiff's liability expert, dated November 5, 2002, and January 20, 2003; a report from Robert P. Wolfe, Ed.D., M.B.A., plaintiff's vocational and economic loss expert, dated November 11, 2002; and a transcript of plaintiff's deposition dated December 4, 2002.

On May 3, 2004, the DRP issued his decision denying the PIP claim. While he acknowledged receipt of a post-hearing submission from defendant, the DRP was silent as to receipt of plaintiff's post-hearing submission stating "[t]here appears to be no additional filing by the [plaintiff] in the NAF portal." In his decision, the DRP referenced the date of the accident as April 25, 2000, and noted that the prescription for aqua therapy from Dr. Cahill appeared to have "pre-date[d] the accident." The DRP determined that plaintiff had not established the nature of her injuries, nor the medical necessity and reasonableness for the hot tub and medical alert system.

On May 13, 2005, believing that the DRP found against her because Dr. Cahill's prescription appeared to have pre-dated the accident, and that the DPR had not considered her post-hearing submission, plaintiff filed a request for modification and/or clarification of the award. N.J.S.A. 2A:23A-12d. On July 7, 2005, the DRP issued an order denying plaintiff's request for modification, but granting clarification, stating plaintiff's post-hearing submission was not considered because it was not contained in the NAF portal, having been mailed directly to him, rather than filed with the NAF. "Pursuant to Rule 18, the DRP reviews and relies upon the material filed with the NAF only."

On September 6, 2005, plaintiff filed a complaint in the Law Division seeking to vacate the alternative dispute resolution award, N.J.A.C. 11:3-5.6(f) and N.J.S.A. 2A:23A-13. An order to show cause was issued directing defendant to appear on October 26, 2005, and to show cause why the relief requested should not be granted. On the return date, plaintiff advised the court that she was not looking to reverse the DRP's decision, but only to have the award vacated and the matter remanded for the DRP to consider plaintiff's post-hearing submission. Defendant argued that plaintiff had failed to establish the reasonableness and necessity for the installation of the hot tub and medical alert system, and that plaintiff's complaint was filed beyond the thirty-day period proscribed by N.J.S.A. 2A:23A-13a.

Although the judge acknowledged that the relief sought could have been denied because the action was filed beyond the thirty-day period proscribed by statute, he did not dismiss the suit on that basis. The judge concluded that although the DRP may have misstated a fact when determining the date of the accident, the DRP did not erroneously apply the applicable law to the issues. Accordingly, the judge denied the relief sought, determining plaintiff had failed to establish grounds for vacating the award under N.J.S.A. 2A:23A-13c.

On appeal, plaintiff argues that: "The order under review should be reversed, and this matter should be remanded to [a DRP] for a thorough consideration of plaintiff's factual submissions." Plaintiff contends that the DRP's unreasonable adherence to the "NAF Portal rule," NAF Rule 18, resulted in a decision which ignored two medical reports and the 138-page deposition of plaintiff, causing the DRP to evaluate the case adversely based on the wrong accident date. Plaintiff asserts that "[w]hile a refusal to consider evidence may produce errors of fact, the refusal itself is not merely an error of fact; the arbitrator's refusals constituted erroneous applications of the law to the issues and facts presented for alternative [dispute] resolution, i.e., statutory grounds for vacation of the award." Defendant counters that "[j]ust like Court Rules, NAF Rules must be consistently observed and enforced to assure uniform and equitable treatment of all participants." Defendant also asserts, as it did below, that plaintiff's complaint was time barred, having been filed sixty-one days after the July 7, 2005 NAF order, citing N.J.S.A. 2A:23A-13a. We agree.

Plaintiff's right to a summary review of the alternate dispute resolution award is governed by N.J.A.C. 11:3-5.6(f) which provides "[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 the review of the award." N.J.S.A. 2A:23A-13 provides in pertinent part:

A party to an alternate resolution proceeding shall commence a summary application in the Superior Court for its vacation, modification[,] or correction within 45 days after the award is delivered to the applicant, or within 30 days after receipt of an award modified pursuant to Subsection d. of section 12 of this act [N.J.S.A. 2A:23A-12] unless the parties shall extend the time in writing. (Emphasis added).

Here, the DRP issued his award on May 3, 2005. Plaintiff moved for a modification or clarification. On July 7, 2005, the DRP issued an order denying modification, but granting clarification of the award. Plaintiff did not file her complaint seeking a summary review of the award in the Law Division until September 6, 2005. Because plaintiff's complaint was filed more than thirty days after entry of the order denying modification but granting clarification, we conclude that the action was time barred, and should have been dismissed in the Law Division on that basis. N.J.S.A. 2A:23A-13.

Plaintiff argues that defendant had waived its right to assert the statute of limitations as a defense to the action because defendant had not raised the statute as an affirmative defense in its filed answer as required by Rule 4:5-4. We disagree because although defendant did not raise the affirmative defense in its answer, it was otherwise timely raised below.

The action in the Law Division was a summary proceeding. N.J.S.A. 2A:23A-13. Generally, a defendant is not required to file an answer until after the return day, and only if the court decides to proceed in the matter as a plenary action. R. 4:67-4(a); R. 4:67-5. Here, although not required, defendant filed an answer, but did not raise the statute of limitations as an affirmative defense therein. However, defendant filed a brief prior to the return date raising the affirmative defense, the issue was argued and addressed by the court below. Accordingly, we conclude that the defense was not waived. See Notte v. Merchants Mut. Ins. Co., 185 N.J. 490, 500 (2006) (holding that the defense of the statute of limitations may be raised by way of an affirmative defense, in either a pleading or by a timely motion); Fees v. Trow, 105 N.J. 330, 335 (1987) (holding that the affirmative defense may be raised in a defendant's answer, or by a motion for summary judgment).

Moreover, even if plaintiff's complaint was not time barred, we are satisfied that the complaint should have been dismissed for procedural reasons. At oral argument, we raised the question of whether this court has jurisdiction to entertain the appeal, because of the proscription contained in N.J.S.A. 2A:23A-18b, "[t]here shall be no further appeal or review of the judgment or decree." We requested, and received from the parties, supplementary memorandums addressing the issue. We conclude that the statutory provision applies.

The New Jersey Alternate Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -30, was enacted in 1987. The Automobile Insurance Cost Reduction Act (AICRA) became effective May 19, 1998, with most of its provisions operative March 22, 1999. AICRA amended the statutory provisions governing PIP disputes by providing that either party to the dispute could select alternate dispute resolution in lieu of filing an action in the Superior Court. N.J.S.A. 39:6A-5.1. Under AICRA, the Commissioner of Banking and Insurance is charged with "promulgat[ing] rules and regulations respecting the conduct of dispute resolution and designat[ing] an organization to administer the dispute resolution program." Allstate Ins. Co. v. Sabato, 380 N.J. Super. 463, 470 (App. Div. 2005).

Effective December 21, 1998, and operative March 22, 1999, the Commissioner enacted regulations implementing various provisions of AICRA "including the requirement adopting APDRA as the procedure to be used for determining PIP benefits disputes." Ibid.; N.J.A.C. 11:3-5.1 to -5.12. The regulations provide that "[t]he final determination [award] 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). Grounds for vacating an alternate dispute resolution award are limited. N.J.S.A. 2A:23A-13c. On completion of its summary review, the trial court is required to enter a final judgment "confirming, modifying, or correcting [the] award," and "[t]here shall be no further appeal or review of the judgment or decree." N.J.S.A. 2A:23A-18b. Because this court has already determined that "N.J.A.C. 39:6A-5.1, which requires the use of APDRA, . . . [is] authorized by AICRA and properly adopted by the Commissioner," Allstate Ins. Co., supra, 380 N.J. Super. at 470, we conclude that there is no right of appeal from the order of the Law Division. N.J.S.A. 2A:23A-18b.

We recognize that there may be "'rare circumstances' grounded in public policy that might compel this [c]ourt to grant limited appellate review." Mt. Hope Dev. Assoc. v. Mt. Hope Water Power, 154 N.J. 141, 152 (1998). For example, courts have a non-delegable special supervisory function in the area of child support that may be exercised upon review of an arbitrator's [child support] award." Ibid. (quoting Fagarty v. Fagarty, 97 N.J. 99, 109 (1984)). Limited appellate review may also be granted from awards entered under APDRA that "come within the exclusive supervisory powers of the Court," such as review of awards concerning attorney fees. Allstate Ins. Co., supra, 380 N.J. Super. at 473. However, we do not find the issues raised herein involve those types of rare circumstances requiring limited appellate review. Accordingly, we affirm the order of November 7, 2005.

 
Affirmed.

At argument, we were informed that the claims for the medical and pharmaceutical charges have been resolved. As such, this appeal only pertains to plaintiff's claim relating to the hot tub and medical alert system.

A portal is defined as: "A website considered as an entry point to other websites, often by being or providing access to a search engine." The American Heritage Dictionary of the English Language, Fourth Edition, http://dictionary.reference.com/search?q=portal. At oral argument, we were advised that NAF procedures require alternate dispute resolution documents to be filed directly with NAF's office in Somerset, New Jersey, after which the documents are electronically transferred via the Internet to the assigned DRP who accesses the documents through a portal on his or her computer.

We acknowledge that there remains "concerns respecting the constitutionality of a statute [APDRA] or administrative provision that limits an insured's access to the Appellate Division based on an insurer's decision to require dispute resolution in its policy." Allstate Ins. Co., supra, 380 N.J. Super. at 468-69. Because neither party addressed the issue in their supplemental memorandums, we deem the issue waived. Triffin v. Mellon, P.S.F.S., 372 N.J. Super. 221, 226 (App. Div. 2004). See also Pressler, Current N.J. Court Rules, comment 4 on R. 2:6-2 (2006) ([i]t is, of course, clear that an issue not briefed is deemed waived.). Nor is the record before us sufficient to address the issue. The appendix does not contain a copy of the automobile insurance policy. We are unable to determine whether the policy permitted plaintiff to seek resolution of the PIP dispute by filing an action in the Superior Court or whether the policy contained a provision requiring PIP disputes to be resolved through an alternate dispute resolution proceeding. See Coalition for Quality Healthcare v. New Jersey Dept. of Banking and Ins., 348 N.J. Super. 272, 318 (App. Div.), certif. denied, 174 N.J. 194 (2002) (Coalition II).

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A-1863-05T2

October 18, 2006