Wade Clark Mulcahy LLP

In Comprehensive Pain Solutions of New Jersey, PC a/a/o William Beard v. Omni Insurance Company, the New Jersey Appellate Division recently rejected an appeal of a Law Division judge’s decision to deny an application to vacate a personal injury protection (“PIP”) arbitration award under the Alternative Procedure for Dispute Resolution Act (APDRA). The lawsuit arose from the plaintiff’s PIP claim against Omni Insurance Company (“Omni”) for reimbursement of bills for medical treatment rendered to Omni’s insured, William Beard. Mr. Beard was a Pennsylvania resident who was injured in a New Jersey car accident. Omni is a Pennsylvania automobile insurer which is not licensed or authorized to do business in New Jersey. Beard's policy had a $5,000 limit for medical expense benefits, which was exhausted when plaintiff submitted the bills.

The legal dispute centered on whether Omni was subject to New Jersey’s "deemer" statute, N.J.S.A. 17:28-1.4, which generally requires insurance companies authorized to conduct automobile insurance business in New Jersey to provide certain coverages in out-of-state policies when the insured vehicle is operated in New Jersey. Plaintiff claimed that despite the exhaustion of the PIP limits, Omni was required to provide PIP coverage up to $250,000 per accident as prescribed by N.J.S.A. 39:6A-4(a).

The DRP denied the claim, finding that the limits were exhausted, and Omni was not subject to the deemer statute since it was not licensed or authorized to do business in New Jersey. Plaintiff sought to vacate the award through a summary action in the Superior Court, asserting that the DRP committed prejudicial error by misapplying the law to the facts. The judge agreed with the DRP and denied the application, finding that Omni did no business in New Jersey and that its parent, which was a New Jersey company, had no control over or relationship with Omni.

The Appellate Division dismissed plaintiff’s appeal, finding that N.J.S.A. 2A:23A-18(b) bars appellate review of a trial judge's decision to confirm, vacate, or modify an arbitration award except in rare circumstances that did not apply in the case. In so holding, the Court observed that appellate review is “generally not available” to challenge a trial judge’s order issued in cases under the APDRA and that absent “rare circumstances”, an appellate court has no jurisdiction to do anything other than recognize that the judge acted within his or her jurisdiction. The Court found that the Law Division judge properly exercised his authority under the APDRA and adhered to the statutory grounds in confirming the arbitration award. Accordingly, the Court dismissed the appeal for lack of jurisdiction.

This case highlights the limited power that courts have to review arbitration awards and provides persuasive authority for the holding that an out of state insurer will not be required to provide higher limits under New Jersey's PIP statute if they are not licensed or authorized to do business in the state.