By: Eric Richwine, Law Clerk
Editor: Betsy G. Ramos, Esq.
The issue before the New Jersey Superior Court, Appellate Division in Hackensack Meridian Health v. Citizens United Reciprocal Exch., 2023 N.J. Super. Unpub. LEXIS 1088 (App. Div. June 29, 2023) was whether Citizens United Reciprocal Exchange (“CURE”), an auto insurer, was liable for the remainder of a hospital invoice from Hackensack Meridian Health (“Hackensack”) after CURE only agreed to cover approximately one-fifth of the total. This lawsuit arose from the cost of almost a month of inpatient treatment following the motor vehicle accident of Andrew Manley, who was insured by CURE, and, therefore, able to benefit from the insurance policy’s personal injury protection (“PIP”) benefits. The specific issue raised upon appeal was whether CURE properly established an “accord and satisfaction” in order to avoid liability of the remainder of the cost.
Mr. Manley was critically injured after a motor vehicle accident on September 8, 2019, and required twenty-five days of inpatient care at Hackensack’s facility. The cost of this treatment totaled $360,172.42. Months later, CURE disputed the billed amount via letter and expressed that it approved $67,445.67 per what was reasonable under PIP. CURE ultimately issued a check for $69,169.52, soon after which Hackensack deposited.
Hackensack followed CURE’s PIP appeal process and sought the full amount of the inpatient care originally sought, filing for PIP Arbitration pursuant to the Alternative Procedure for Dispute Resolution Act (“APDRA”), N.J.S.A. 2A:23A-1 to -32. Upon arbitration, the Dispute Resolution Professional (“DRP”) found in favor of CURE. The DRP reasoned that pursuant to the doctrine of accord and satisfaction, Hackensack had manifested the intent to accept the offer when it deposited the check.
Hackensack appealed to the New Jersey Superior Court, Law Division, where it argued that CURE failed to comply with the requirements to deal in “good faith” with regard to a “bona fide dispute” in accordance with accord and satisfaction law by not responding to the original invoice within ninety days and by paying significantly less than what was owed. The trial court agreed and ultimately remanded the matter back to arbitration, finding that CURE’s payment did not constitute an accord and satisfaction because the amount paid was not in genuine dispute since both parties agreed that at least that much was owed, leaving the remainder of plaintiff’s bill as the actual amount in dispute.
CURE filed an interlocutory appeal in response to the trial court’s ruling. Notably, it did so without seeking leave. The appeal specifically argued against the trial court’s finding that accord and satisfaction did not apply and remand of the matter to the APDRA.
Upon appeal, the Appellate Division noted that the Court only considers appeals from final orders of a trial court and other orders expressly designated as final for purposes of appeal, as set forth by New Jersey Court Rules 2:2-3(a)(1), (3) and relevant case law, primarily relying upon Janicky v. Point Bay Fuel, Inc., 396 N.J. Super. 545, 549-50 (App. Div. 2007), which held that if a party seeks to appeal an order that is not final, then the party must seek leave to appeal from the Appellate Division. Because CURE failed to seek leave to appeal, the Court turned to the very narrow “nunc pro tunc” exception which permits the Appellate Division to grant leave to appeal in particular circumstances but found that it did not apply here, as it is only to be reserved for circumstances that warrant the “most extraordinary relief.”
The Appellate Division admonished CURE, noting that it knew the dispute had been remanded for further arbitration and had asserted on “appeal” the sole issue decided by the trial court, that of accord and satisfaction, as a strategic device in order to undermine the “alternative dispute mechanism” in the absence of a final order.
The Appellate Division further expressed that under the APDRA, there is a high standard for appellate review of an arbitration award per the state statutory procedures for PIP arbitration, citing N.J.S.A. 2A:23A-18(b), which does not permit appeal, and case law that has upheld the statute, such New Jersey Supreme Court’s holding in Mt. Hope Dev. Associates v. Mt. Hope Waterpower Project, L.P., 154 N.J. 141, 148-52 (1998). The Court did note that there is the opportunity for “limited review” per a public policy exception, but that this exception did not apply here and instead was reserved for matters deemed necessary, giving the example of a child support order.
Ultimately, the Appellate Division determined that CURE failed to “adher[e] to the rules” and that any affirmative outcome would be an “injustice to Hackensack.” As such, the Court dismissed the appeal.
