PETER A. LIQUARI, III v. JENNIFER COMBS
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3924-15T3
PETER A. LIQUARI, III, and
REBECCA LIQUARI,
Plaintiffs-Appellants,
v.
JENNIFER COMBS,
Defendant,
and
PROCURA MANAGEMENT INC.,
and/or ESURANCE INSURANCE SERVICES,
Defendants-Respondents.
Submitted January 17, 2018 - Decided February 2, 2018
Before Judges Carroll and Mawla.
On appeal from Superior Court of New Jersey,
Law Division, Monmouth County, Docket No.
L-0327-13.
Spector Foerst & Associates, attorneys for
appellants (James M. Foerst, on the briefs).
Morgan Melhuish Abrutyn, attorneys for
respondents (Deborah J. Banfield, of counsel
and on the brief; Mark T. Hall, on the brief).
PER CURIAM
This appeal arises out of a dispute over the payment of
personal injury protection (PIP) benefits. Plaintiff Peter A.
Liquari, III brought suit against his automobile insurance
carrier, Esurance Insurance Services, Inc. (Esurance), and its
claims administrator, Procura Management, Inc. (Procura), for
damages he allegedly suffered as a result of defendants' bad faith
in delaying and denying his medical treatment. Plaintiff appeals
the April 26, 2016 order dismissing his claims against defendants
on summary judgment. For the reasons that follow, we affirm.
I.
We provide some brief historical background to lend context
to the present dispute. We have previously noted that
[t]he requirement that an automobile insurance
policy include PIP benefits is a fundamental
part of the No-Fault Act,
N.J.S.A. 39:6A-1 to
-35, first enacted in 1972, L. 1972, c. 70,
and comprehensively amended in 1998 by
enactment of the Automobile Insurance Cost
Reduction Act (AICRA), L. 1998, c. 21 and c.
22. Two major objectives of this legislation
are facilitating "prompt and efficient
provision of benefits for all accident injury
victims" and "minimiz[ing] resort to the
judicial process. . . ." Gambino v. Royal
Globe Ins. Cos.,
86 N.J. 100, 105-07 (1981).
[Endo Surgi Ctr., P.C. v. Liberty Mut. Ins.
Co.,
391 N.J. Super. 588, 592 (App. Div.
2007).]
2 A-3924-15T3
AICRA represents the Legislature's continued effort to reduce
the cost of automobile insurance. In a seminal decision construing
the then-recently enacted AICRA, we began by reviewing the
Legislature's previous unsuccessful efforts to reduce automobile
insurance costs, including AICRA's predecessor, the Fair
Automobile Insurance Reform Act (FAIRA),
N.J.S.A. 17:33B-1 to -
64. See Coal. for Quality Health Care v. N.J. Dep't of Banking &
Ins.,
348 N.J. Super. 272, 283 (App. Div. 2002). In adopting
AICRA, the Legislature "made further comprehensive changes to the
no-fault automobile insurance laws in an effort to 'preserve the
no-fault system, while at the same time reducing unnecessary costs'
which had resulted in increased premiums." Ibid. (quoting
N.J.S.A.
39:6A-1.1(b)).
AICRA implemented standard courses of treatment (Care Paths)
established by the Commissioner of Banking and Insurance
(Commissioner) for soft-tissue injuries of the neck and back. See
N.J.A.C. 11:3-4.6. Under AICRA, the Care Paths provide that
treatment of existing injuries be evaluated at certain intervals
called Decision Points. Upon reaching a Decision Point, an insured
must provide information about further treatment he or she expects
the insurer to provide. See N.J.A.C. 11:3-4.2. Evaluation of
this information is known as Decision Point Review (DPR), and is
subject to the mandatory protocols of an insurer's Decision Point
3 A-3924-15T3
Review Plan (DPR Plan). See N.J.A.C. 11:3-4.7. DPR is also
required for PIP reimbursement of certain diagnostic tests under
N.J.A.C. 11:3-4.5(b).
Where standard treatment protocols are not appropriate or a
new injury arises, the insured's treating physician may provide
"precertification" of certain procedures, treatments and
diagnostic tests, supported by the physician's clinical findings.
See
N.J.S.A. 39:6A-3.1(a). Precertification is subject to
regulatory approval by the Commissioner.
The insured bears the burden of establishing his or her claims
are medically necessary by a preponderance of the evidence.
Miltner v. Safeco Ins. Co.,
175 N.J. Super. 156, 157-58 (Law Div.
1980). From that point, the insurer bears the burden of providing
coverage or proving it is not responsible for the payment. Ibid.
Disputes over the payment of PIP benefits are governed by
N.J.S.A. 39:6A-5 (Section 5).
N.J.S.A. 39:6A-5(g) provides that
any claim for PIP medical benefits shall be overdue if not paid
within sixty days after the insurer is furnished written notice
of the fact of a covered loss and of the amount of same, and that
all overdue payments shall bear interest at the percentage of
interest prescribed in the New Jersey Rules of Court for judgments,
awards, and orders for the payment of money.
N.J.S.A. 39:6A-5(h).
The No-Fault Act also provides that either the insured or insurer
4 A-3924-15T3
may submit any dispute regarding payment of PIP medical benefits
to alternative dispute resolution, which may consist of either
arbitration or review by a medical review organization.
N.J.S.A.
39:6A-5.1, -5.2. An insured who prevails in such a proceeding may
be awarded attorney's fees. R. 4:42-9(a)(6).
II.
It is against this backdrop that we recount the facts
underlying the dispute between insurer and insured. In his
complaint, plaintiff sought damages for the injuries he sustained
in an April 6, 2011 automobile accident he claimed was caused by
the negligence of defendant Jennifer Combs.1 At the time of the
accident, plaintiff was covered under his wife's automobile
insurance policy issued by Esurance, which provided PIP coverage
of $250,000.
Specifically, the Second Count of plaintiff's complaint
alleged that defendants failed to properly and timely provide him
with PIP benefits to allow him to receive adequate medical care.
The Third Count alleged that defendants negligently failed to
timely and properly approve PIP benefits to which plaintiff was
entitled under the insurance policy, causing him injury and
exacerbating injuries he sustained in the accident. The Fourth
1
Plaintiff's negligence claim against Combs is not at issue in
this appeal.
5 A-3924-15T3
Count sought punitive damages based on plaintiff's claim that
defendants acted "egregious[ly] and outrageous[ly]" by
"requir[ing] unreasonable cooperation and deny[ing] reasonable and
appropriate medical testing, therapy[,] and treatment." However,
as plaintiff's medical treatment progressed, the full $250,000 PIP
policy limit was ultimately paid by Esurance, thus rendering moot
plaintiff's claim for benefits in Count Two.
With respect to these contentions, the motion record reveals
that, following the accident, Esurance provided plaintiff with its
DPR Plan, which had been approved by the Commissioner and contained
Esurance's internal appeal and dispute resolution processes. The
DPR Plan further advised plaintiff and his treating health care
providers of Esurance's precertification requirements and the
right to arbitrate disputes.
From April 2011 to August 2014, defendants processed
plaintiff's precertification treatment plans and medical bills for
injuries sustained as a result of the automobile accident.
Plaintiff's coverage limit of $250,000 was fully exhausted in
August 2014. As described in further detail below, plaintiff
contends defendants failed to properly administer its DPR plan and
did so in bad faith with regard to: (1) physical therapy to his
left knee; (2) physical therapy to his lumbar spine; and (3)
neuropsychological treatment. As a result, plaintiff alleges
6 A-3924-15T3
defendants delayed his overall recovery and caused additional
pain, suffering, and disability.
Left-Knee Treatment
On August 18, 2011, plaintiff underwent arthroscopic surgery
on his left knee, which was approved by defendants. Thereafter,
plaintiff's knee pain did not subside. Plaintiff received follow-
up treatment from his treating physician, Dr. Jeffrey Bechler, who
requested precertification for physical therapy. Defendants
properly received notice of this request for coverage.
Defendants referred the matter to Dr. David S. Wolkstein for
a medical director review (MDR). Plaintiff's request for physical
therapy was subsequently denied based on Dr. Wolkstein's
conclusion that "alternatives in treatment would be more
appropriate [than physical therapy]." "However, because of the
length of time that has gone by and the persistent symptoms," Dr.
Wolkstein recommended plaintiff undergo an additional independent
medical examination (IME).
On November 14, 2012, plaintiff underwent an IME with Dr.
Kenneth P. Heist. Based on this examination, plaintiff's request
for physical therapy for his left knee was denied (although four
weeks of physical therapy for plaintiff's right shoulder was
approved). Nonetheless, Dr. Bechler continued to treat plaintiff
for knee pain and performed an additional arthroscopic surgery on
7 A-3924-15T3
plaintiff's left knee in December 2012, which was approved and
covered by defendants.
Following this surgery, plaintiff received physical therapy
from December 2012 to March 2013. On March 27, 2013, plaintiff
underwent an IME with orthopedist Lawrence I. Barr, D.O. Dr. Barr
concluded plaintiff had "plateaued medically and reached maximum
medical improvement. No further treatment appears indicated."
Sean Lager, M.D. subsequently conducted an MDR and denied further
physical therapy, noting there was "insufficient information
provided" to support the request. Specifically, Dr. Lager noted
the absence of a recent physical examination and current treatment
plan from plaintiff's treating physician, as well as the absence
of an operative report regarding plaintiff's recent knee surgery.
In July 2013, Dr. Heist conducted an independent medical
reexamination and found plaintiff "ha[d] not reached his maximum
medical improvement" with regard to his left knee. Dr. Heist
recommended three weeks of continued physical therapy, followed
by at-home treatment, and opined that plaintiff "can return to
work in a sedentary to light duty capacity." On October 3, 2013,
Gary L. Yen, M.D., conducted another IME and concluded plaintiff
had reached "maximum medical improvement . . . with regard to
. . . [the] left knee."
8 A-3924-15T3
On March 24, 2014, plaintiff's treating physician and medical
expert witness, Joseph F. Fetto, M.D., recommended plaintiff
undergo a total left-knee replacement. Defendants approved the
procedure on June 19, 2014. On August 27, 2014, defendants
informed plaintiff that his $250,000 PIP coverage was exhausted.
Lumbar Spine Treatment
In August 2011, plaintiff complained of "a burning sensation
across his back" and presented to Dr. Heist for an IME. Although
Dr. Heist confirmed plaintiff's continued need for treatment on
his left knee and right shoulder, he concluded plaintiff's lower
back injuries had "reached maximum medical improvement."
In October 2012, plaintiff presented to Gino Chiappetta,
M.D., complaining of low back pain. Dr. Chiappetta sent defendants
a precertification request for an MRI of plaintiff's lumbar spine.
On November 14, 2012, defendants referred plaintiff to Dr. Heist
for an IME. Dr. Heist opined that an MRI of plaintiff's lumbar
spine was not medically necessary. Dr. Chiappetta appealed the
denial, but was unsuccessful.
On February 14, 2013, Dr. Chiappetta reaffirmed that an MRI
of plaintiff's lumbar spine was medically necessary, noting
plaintiff was "worsening in terms of his pain and numbness" and
an MRI would be "very helpful in terms of detailing the underlying
pathology." On February 22, 2013, defendants again denied Dr.
9 A-3924-15T3
Chiappetta's request. Defendants also denied coverage for
physical therapy on March 4, 2013.
Days later, plaintiff underwent an MRI at Jersey Shore Medical
Center. The MRI revealed a "small disc herniation" and some "disc
degeneration." On March 27, 2013, Dr. Barr conducted an IME and
noted plaintiff's complaint of severe back pain, which made his
examination of plaintiff difficult. Dr. Barr concluded plaintiff
"was at a plateau medically and no further treatment was
indicated." On April 1, 2013, defendants approved payment of the
MRI. However, Dr. Chiappetta's request that plaintiff receive
lumbar fusion surgery was denied following an MDR. Dr. Chiappetta
unsuccessfully appealed on April 15, 2013. Plaintiff maintains
he was denied medically necessary treatment to his lumbar spine
as a result of defendants' actions.
Neuropsychological Treatment
In June 2011, plaintiff underwent a neuropsychological
consultation with Brett J. Prince, Ph.D., who concluded plaintiff
was suffering from a mood disorder with anxiety. Following Dr.
Prince's precertification submission requesting plaintiff receive
psychological treatment, an MDR was performed by clinical
neuropsychologist Lewis A. Lazarus, Ph.D. Dr. Lazarus approved
the neuropsychological evaluation and the requested
neuropsychological testing. However, Dr. Lazarus concluded he
10 A-3924-15T3
could not make a determination of medical necessity with respect
to the requests for pain management psychological testing and
psychotherapy without additional information from Dr. Prince. On
June 30, 2011, Dr. Prince appealed that determination, supplied
additional information, and requested an IME be scheduled.
On August 2, 2011, Dr. Lazarus agreed that plaintiff undergo
an IME. Theodore J. Batlas, Psy.D. conducted the IME on September
14, 2011. Dr. Batlas concluded plaintiff was suffering from
adjustment disorder with anxiety and depression. As a result,
certain psychological treatments were approved while others were
not.
On October 5, 2011, Dr. Prince submitted a request for
reconsideration, noting the decision was unsubstantiated because
certain "vital issues" were "unaddressed and unresolved" in Dr.
Batlas's IME report. On October 20, 2011, Dr. Prince sent a second
request by facsimile stating: "Please review [and] advise. Patient
is deteriorating and requires immediate care." Dr. Prince added,
"there has been an inappropriate and unlawful delay in sending our
request for an IME addendum to [Dr. Batlas], in clear violation
of New Jersey Auto PIP [l]aws."
On November 2, 2011, Dr. Batlas issued an IME addendum
recommending a "brief program of cognitive therapy" with the
expectation that plaintiff would thereby obtain "maximum medical
11 A-3924-15T3
improvement for cognitive difficulties." Dr. Batlas conducted
another IME on January 9, 2012, and recommended plaintiff receive
additional individual psychotherapy and cognitive therapy
training, while finding "[a]dditional psychotherapy or biofeedback
are not medically necessary or indicated."
On January 31, 2012, Dr. Prince expressed his dissatisfaction
with Procura's failure to provide a copy of Dr. Batlas's January
9, 2012 IME report. Specifically, Dr. Prince informed Procura
that its "repeated unwillingness to produce this report has not
only led to a dangerous delay in curative treatment for [plaintiff]
but is in direct violation of established New Jersey PIP [a]uto
laws." On February 7, 2012, defendants approved an additional ten
weeks of cognitive treatment, while denying other aspects of the
requested treatment.
Defendants moved for summary judgment on March 2, 2016. They
contended their administration of plaintiff's PIP claim complied
with their contractual obligations under the DPR and
precertification plans, as well as all applicable statutes and
regulations. Defendants also argued that Section 5 provides the
exclusive remedy and bars plaintiff from recovering any damages
beyond the payment of attorney's fees, costs, and interest on
overdue benefits.
12 A-3924-15T3
Plaintiff opposed the motion, arguing he was entitled to
punitive damages due to Procura's negligent or willful failure to
properly provide benefits under the statutory framework.
Plaintiff further contended that defendant's failure to comply
with the DPR constituted a genuine issue of material fact
warranting the denial of summary judgment.
In a detailed written opinion, the motion judge found
defendants complied with their DPR, which in turn complied with
the PIP statutes and accompanying regulations. The judge
determined:
Defendants' use of MDRs and IMEs were in
compliance with their policy and the statutory
requirements of . . .
N.J.S.A. 39:6A-5 and
N.J.A.C. 11:3-4 and were not used to delay
treatment or harass . . . [p]laintiff. For
treatment that [p]laintiff alleges . . .
[d]efendants delayed or denied, he had the
option to appeal a denial of treatment to
arbitration. . . . Plaintiff admitted that
he did not attempt to arbitrate his treatment.
Consequently, the judge concluded plaintiff was not entitled to
recovery beyond the remedies provided in Section 5, and dismissed
the complaint against defendants. This appeal followed.
III.
Plaintiff targets his arguments on appeal solely toward
Procura. Plaintiff contends Procura's bad faith in delaying
approval for his medical treatment exacerbated his injuries and
13 A-3924-15T3
"constituted an independent negligence action, exclusive of its
duty to pay for treatment under N.J.S.A. 39:6[A]-5." Plaintiff
further contends that summary judgment was improper because
whether Procura violated its duty of good-faith and fair dealing
was a genuine issue of material fact for the jury to decide.
When reviewing the grant of summary judgment, we analyze the
decision applying the "same standard as the motion judge." Globe
Motor Co. v. Igdalev,
225 N.J. 469, 479 (2016) (quoting Bhagat v.
Bhagat,
217 N.J. 22, 38 (2014)).
That standard mandates that summary judgment
be granted "if the pleadings, depositions,
answers to interrogatories and admissions on
file, together with the affidavits, if any,
show that there is no genuine issue as to any
material fact challenged and that the moving
party is entitled to a judgment or order as a
matter of law."
[Templo Fuente De Vida Corp. v. Nat'l Union
Fire Ins. Co.,
224 N.J. 189, 199 (2016)
(quoting R. 4:46-2(c)).]
"To defeat a motion for summary judgment, the opponent must
'come forward with evidence' that creates a genuine issue of
material fact." Cortez v. Gindhart,
435 N.J. Super. 589, 605
(App. Div. 2014) (quoting Horizon Blue Cross Blue Shield of N.J.
v. State,
425 N.J. Super. 1, 32 (App. Div. 2012)), certif. denied,
220 N.J. 269 (2015). "[C]onclusory and self-serving assertions
by one of the parties are insufficient to overcome the motion."
14 A-3924-15T3
Puder v. Buechel,
183 N.J. 428, 440-41 (2005) (citations omitted).
"When no issue of fact exists, and only a question of law remains,
[we] [afford] no special deference to the legal determinations of
the trial court." Templo Fuente De Vida,
224 N.J. at 199 (citing
Manalapan Realty, L.P. v. Twp. Comm. of Manalapan,
140 N.J. 366,
378 (1995)).
Our Supreme Court has recognized that "an insurance company
owes a duty of good faith to its insured in processing a first-
party claim." Pickett v. Lloyd's,
131 N.J. 457, 467 (1993).
Further,
an insurance company may be liable to a
policyholder for bad faith in the context of
paying benefits under a policy. The scope of
that duty is not to be equated with simple
negligence. In the case of denial of
benefits, bad faith is established by showing
that no debatable reasons existed for denial
of the benefits. In the case of processing
delay, bad faith is established by showing
that no valid reasons existed to delay
processing the claim and the insurance company
knew or recklessly disregarded the fact that
no valid reasons supported the delay. In
either case (denial or delay), liability may
be imposed for consequential economic losses
that are fairly within the contemplation of
the insurance company.
[Id. at 481 (emphasis added).]
In defining what constitutes bad faith refusal to pay a first-
party claim, the Court stated "[i]f a claim is 'fairly debatable,'
no liability in tort will arise." Id. at 473 (quoting Bibeault
15 A-3924-15T3
v. Hanover Ins. Co.,
417 A.2d 313, 319 (R.I. 1980)). The Court
continued:
To show a claim for bad faith, a plaintiff
must show the absence of a reasonable basis
for denying benefits of the policy and the
defendant's knowledge or reckless disregard of
the lack of a reasonable basis for denying the
claim. It is apparent, then, that the tort
of bad faith is an intentional one. Implicit
in that test is our conclusion that the
knowledge of the lack of a reasonable basis
may be inferred and imputed to an insurance
company where there is a reckless indifference
to facts or to proofs submitted by the
insured.
[Ibid. (quoting Anderson v. Continental Ins.
Co.,
271 N.W.2d 368, 376-77 (1978) (emphasis
added).]
However, in the PIP context, we have concluded
that the sole remedy for a wrongful denial of
PIP benefits is an award of the interest
mandated by
N.J.S.A. 39:6A-5(h) and [that
conclusion] is also supported by the statutory
mandate that either the insured or the insurer
may require submission of any dispute
regarding payment of PIP benefits to the
alternative dispute resolution procedures
provided by
N.J.S.A. 39:6A-5.1. The evident
purpose of this provision is to establish an
expeditious non-judicial procedure for
resolving any dispute regarding the payment
of PIP benefits, in furtherance of the No-
Fault Act's objectives of facilitating "prompt
and efficient provision of benefits for all
accident injury victims" and "minimiz[ing]
resort to the judicial process. . . ."
Gambino,
86 N.J. at 105. Moreover, even if
these alternative dispute procedures are not
utilized, there is no right to a jury trial
in an action for unpaid PIP benefits. Manetti
16 A-3924-15T3
[v. Prudential Prop. & Cas. Ins. Co., 196 N.J.
Super. 317, 320-21 (App. Div. 1984)].
However, if an insured (or an insured's
assignee) were allowed to pursue a common law
claim for an alleged bad faith denial of PIP
benefits, under which there would be an
entitlement to a jury trial, this would open
the door to circumvention of the statutorily
mandated alternative dispute resolution
procedure provided by
N.J.S.A. 39:6A-5.1.
[Endo Surgi Ctr.,
391 N.J. Super. at 594-95.]
In reversing the trial court's decision denying the insurer's
motion to dismiss the bad faith claim, we distinguished Pickett
as follows:
In concluding that an insured can
maintain a common law action for breach of
good faith for denial of a PIP claim, the trial
court relied primarily upon Pickett,
131 N.J.
at 466-80, in which the Court held that a
trucker who suffered economic losses in
addition to the value of his truck as a result
of his insurance carrier's failure to pay
collision damage benefits could pursue a claim
for a bad faith denial of benefits. The Court
also held that the insured could seek punitive
damages if the insurance carrier's conduct was
wantonly reckless or malicious. Id. at 475-
76. However, the court expressly recognized
. . . that a claim for a wrongful failure to
pay statutorily mandated insurance benefits
such as PIP should be treated differently than
a claim that is not subject to statutory
regulation:
We also concur with the courts
holding, in the highly-regulated
area of personal injury protection,
see
N.J.S.A. 39:6A-5, that wrongful
failure to pay benefits, wrongful
withholding of benefits or other
17 A-3924-15T3
violation of the statute does not
thereby give rise to a claim for
punitive damages.
[Id. at 476.]
The Court also indicated that even though
a punitive damages claim is not maintainable
for an alleged bad faith denial of a
statutorily regulated insurance benefit, an
insured still may pursue a claim for
compensatory and punitive damages for an
"independent tort" committed by an insurance
carrier in response to a claim for benefits,
"such as threats by the insurer's agents to
kill the insured and the insured's children
. . . ." Id. at 475.
[Endo Surgi Ctr.,
391 N.J. Super. at 595.]
The decision we reached in Endo Surgi Center is no less
applicable in the present case. Plaintiff does not allege that
defendants committed any such independent tort here. Plaintiff's
sole claim is that defendants' delay, and in some instances denial
of payments of PIP benefits, was undertaken in bad faith.
Therefore, even if defendants improperly delayed or denied
payments of PIP benefits, plaintiff is only entitled to payment
of the improperly denied benefits plus interest thereon and
attorney's fees he incurred to collect those benefits. Endo Surgi
Center,
391 N.J. Super. at 595-96. Here, Esurance paid the full
$250,000 in PIP benefits pursuant to the policy limits, so that
no further benefits are due. Plaintiff is not entitled to
additional compensatory or punitive damages for defendants'
18 A-3924-15T3
alleged bad faith. Accordingly, summary judgment was properly
granted dismissing plaintiff's claims of bad faith.
Affirmed.
19 A-3924-15T3
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