ORTHOPAEDIC ASSOCIATES v. FIRST TRENTON INDEMNITY COMPANY

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1005-06T51005-06T5

ORTHOPAEDIC ASSOCIATES

A/S/O ROBERT FDYFIL,

Plaintiff-Appellant,

v.

FIRST TRENTON INDEMNITY COMPANY,

Defendant-Respondent.

__________________________________________________

 

Argued April 18, 2007 - Decided April 27, 2007

Before Judges Parker and C.S. Fisher.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. BER-L-2222-06.

Joseph A. Massood argued the cause for appellant (Law Offices of Joseph A. Massood, attorneys; Leigh A. Berry, on the brief).

Frank J. Keenan argued the cause for respondent (Methfessel & Werbel, attorneys; Mr. Keenan, on the brief).

PER CURIAM

In this appeal, we conclude that the trial judge erred in refusing to vacate an arbitration award entered in favor of defendant First Trenton Indemnity Company (First Trenton) because he mistakenly failed to recognize that the arbitration award was based upon an erroneous legal standard.

There is no dispute that, on March 21, 2003, Robert Fdyfil was walking across Meeker Avenue in Newark when struck by a motor vehicle. The vehicle did not stop, but the record before the arbitrator contained, among other things, a police report, which indicated that the fleeing vehicle was owned by Pamela Bharrat; this information was apparently based upon Fdyfil's observation of the vehicle's plate numbers as it drove away. The police report also described the male driver of the vehicle as being either Hispanic or Asian.

There was also no dispute that Bharrat, who then lived in Paterson with Antulio Medina, owned the vehicle on the date in question, and that it was insured by First Trenton. However, Bharrat claimed she had "no knowledge about this accident," was the "only one" in her home "who drove the vehicle," had "never knowingly been to Newark," had "never lent the keys [of the vehicle] to anyone," and was "the only one whoever drove this car."

Plaintiff Orthopaedic Associates (plaintiff) performed knee surgery on Fdyfil and obtained an assignment from him in order to pursue payment for the medical services rendered from any available source. When First Trenton refused to pay, plaintiff instituted a PIP arbitration proceeding with the American Arbitration Association.

Following a hearing, the arbitrator determined that Fdyfil was a person eligible for PIP benefits, but concluded that plaintiff failed to demonstrate an insured loss, stating:

The within claim results from an alleged hit and run collision with the [i]njured [p]arty, a pedestrian. [First Trenton's] insured, identified by the [i]njured [p]arty as the operator of the offending vehicle, denied operation of the vehicle at the time of the collision. The police report identi-fies the vehicle owned by [First Trenton's] insured as the offending vehicle. However, the police report offers no description of the operator of [the] offending vehicle.

[Plaintiff] bears the burden of establishing policy coverage. Here, [plaintiff] has failed, by a preponderance of the evidence adduced at the hearing, to establish the identity of the offending driver. [Plain-tiff] has failed to sustain[] its required burden of proof.

As such, [plaintiff's] demands in arbitra-tion . . . are denied in the entirety, with prejudice.

[Emphasis added.]

The arbitrator also denied plaintiff's motion for reconsideration.

Plaintiff then commenced this action in the Law Division, claiming that the award should be vacated because 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). Plaintiff unsuccessfully moved for summary judgment, and this appeal followed.

The pivotal question presented in the PIP arbitration was governed by the version of N.J.S.A. 39:6A-4 then in effect, which did not require proof of the insured's "negligence, liability or fault of any kind" but did require proof in this case that Fdyfil suffered "bodily injury caused by the named insured's automobile" (emphasis added). See also Darel v. Pennsylvania Mfrs. Ass'n Ins. Co., 114 N.J. 416, 420 (1989). The trial judge correctly observed that this was the governing standard, but mistakenly failed to recognize that the arbitrator applied a different standard. That is, the arbitrator concluded that plaintiff's claim was without merit because he found that plaintiff "failed, by a preponderance of the evidence adduced at the hearing, to establish the identity of the offending driver" (emphasis added). Since the arbitrator's holding was wholly inconsistent with the requirements of N.J.S.A. 39:6A-4, it represented an erroneous application of the law, prejudiced plaintiff, and required the vacating of the award.

We additionally observe that the trial judge misconstrued the state of the factual record before the arbitrator. Although the arbitrator had concluded that plaintiff failed to present sufficient evidence of the identity of the offending driver, there is no question that the arbitrator recognized that plaintiff provided evidence of the identity of the offending vehicle. The arbitrator expressly stated in his written decision that plaintiff had submitted a police report, which "identifie[d] the vehicle owned by [First Trenton's] insured as the offending vehicle." Accordingly, the judge was also mistaken, in denying plaintiff's summary judgment motion, in concluding that plaintiff had failed to introduce evidence regarding the pivotal question presented in this PIP claim.

In other words, while the judge's own description of the issues correctly identified and described the legal standard that the arbitrator was obligated to apply -- namely, whether the named insured's vehicle struck the injured party -- he mistakenly failed to recognize that the arbitrator had applied a different and more onerous burden by requiring plaintiff to prove the identity of the driver of the named insured's vehicle. In addition, the judge misconstrued the factual record when he concluded that plaintiff had failed to produce evidence of the identity of the insured vehicle; the arbitrator's written decision clearly reveals that the arbitrator was presented with evidence that identified the offending vehicle as the named insured's vehicle. Had the arbitrator applied the correct legal standard, he would then have been obligated to compare the evidence presented by plaintiff as to the identity of the vehicle that struck Fdyfil against First Trenton's contrary evidence to determine whether plaintiff's evidence preponderated over First Trenton's. The arbitrator, however, made no finding in this regard because he applied the wrong legal standard.

Accordingly, this matter must be returned to the arbitrator for the application of the correct legal standard and for a finding as to whether plaintiff demonstrated that Fdyfil was struck by the vehicle insured by First Trenton. The identity of the person who may have been operating the vehicle is not controlling, but evidence in that regard may be relevant insofar as it sheds light in determining the identity of the vehicle.

For these reasons, we conclude that 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)(5), and that the order under review cannot stand because it is based upon the trial judge's mistaken failure to reach that conclusion. As a result, we reverse the summary judgment entered in favor of First Trenton, and remand for the trial judge's entry of a judgment that (1) vacates the arbitration award entered in favor of First Trenton and (2) remands the matter to the arbitrator for further proceedings in conformity with this opinion.

Reversed and remanded. We do not retain jurisdiction.

 

It is arguable that the order denying plaintiff's summary judgment motion is not a final order. However, we assume that in denying summary judgment the judge intended to dismiss the complaint or confirm the arbitration award, or it is at least fair to conclude that this would be "the inevitable effect" of the order appealed from. Tradesoft Tech., Inc. v. Franklin Mut. Ins. Co., 329 N.J. Super. 137, 141 (App. Div. 2000). Accordingly, to the extent necessary, we grant leave to appeal out of time since the matter has been fully briefed, has been argued, and is otherwise ready for a disposition on its merits. Ibid.

To the extent that the identity of the driver has relevance to this claim, we would observe that plaintiff did provide such evidence. As revealed by the police report, Fdyfil indicated that the driver was either an Hispanic or Asian male. We offer no view as to the weight of this statement, or its significance in light of Bharrat's acknowledgement that she then resided with a man who had what might appear to be an Hispanic name. The point is that the arbitrator was mistaken when he said there was no evidence regarding the identity of the driver.

(continued)

(continued)

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A-1005-06T5

April 27, 2007