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New Jersey Citizens Underwriting Reciprocal Exchange v. Collins, D.C., LLC

399 N.J. Super. 40, 942 A.2d 864 (App. Div. 2008)

ARBITRATION; APPEALS — Where a lower court’s review of an arbitration decision is based only on those grounds found in New Jersey’s Alternative Procedure of Dispute Resolution Act, an appellate court can only review that lower court’s decision with the limited purpose of determining whether the lower court exceeded its authority under the Act.

A doctor, as the assignee of two patients’ insurance claims, filed two arbitrations seeking payment from his patient’s insurer. One claim was for a father and son, and the other was for the son’s mother. The insurance company had denied coverage to all parties based upon the father’s material misrepresentations that he was single and living alone when he had purchased his auto policy, and again upon each renewal application. In fact, he had been living with the son’s mother. In the first arbitration case concerning the father and son, the insurer prevailed because of the material misrepresentations made by the father, but in the other arbitration, a different arbitrator held that the insurer was estopped from disclaiming coverage to the child’s mother. After unsuccessfully appealing to the arbitration forum, the insurer sued seeking reversal of the arbitrator’s case involving the mother. The lower court held that the insurer had been prejudiced by the fact that the two arbitrations were held separately by different arbitrators, with inconsistent decisions reached. It vacated the decision of the arbitrator in the mother’s case. The doctor appealed.

The Appellate Division held that it lacked jurisdiction to review the lower court’s order under the New Jersey Alternative Procedure for Dispute Resolution Act (APDRA). According to the Court, when the lower court’s review of an arbitration decision is based only on those grounds found in the APDRA, an appellate court has no jurisdiction to review that decision. Therefore, the Court could only review the lower court’s decision for the limited purpose of determining whether the lower court exceeded its authority under APDRA. After doing so, the Court concluded that the lower court was within its discretion upon thorough and persuasive findings of fact.


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