AMBULATORY SURGICAL CENTER OF SOMERSET et al v. ALLSTATE FIRE CASUALTY INSURANCE COMPANY

Filing 34

OPINION filed. Signed by Judge Anne E. Thompson on 10/4/2017. (mps)

REcEIVEo

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

OCT 05 2017
AT 8:30
WILLJAM T. WALS -M
CLERK
H

AMBULATORY SURGICAL CENTER OF
SOMERSET, individually and as a Class
Representative on behalfof others similar
situated, and JUAN GONZALEZ,
individually and as a Class Representative on
behalfof others similar situated,

Civ. No. 16-5378

OPINION

Plaintiffs,

v.
ALLSTATE FIRE CASUALTY
INSURANCE COMPANY,
Defendant.

THOMPSON, U.S.D.J.
This matter comes before the Court upon the motion by Defendant Allstate Fire and
Casualty Insurance Company ("Defendant") to reconsider the Court's Opinion denying
arbitration. (ECF No. 32.) Plaintiffs Ambulatory Surgical Center of Somerset and Juan
Gonzalez ("Gonzalez") (collectively, "Plaintiffs") oppose. (ECF No. 33.) The Court has issued
the opinion below based upon the written submissions of the parties and without oral argument

pursuant to Local Civil Rule 78.l(b). For the reasons stated herein, Defendant's Motion for
Reconsideration is granted.

BACKGROUND
This matter arises out of an automobile accident in New Jersey where Plaintiff Gonzalez
sustained injuries requiring medical attention. (Compl. mf 5-6, ECF No. 1). He underwent a
related surgery on March 10, 2015 at the Ambulatory Surgical Center of Somerset. (Id.

1

1 9).

Defendant refused to pay for the procedure because there is no procedure code listed in the New
Jersey Auto Fee Schedule.

(Id.~

10). Plaintiff contends that where, as here, there is no

procedure code listed in the New Jersey Auto Fee Schedule, the procedure is payable at
reasonable rates pursuant to N.J. Ins. Code§ 11:3-29. (Id.

mf 12-13).

Defendant has refused and

continues to refuse to pay for procedures performed at ambulatory surgical centers for which
procedure codes are not listed in the New Jersey Auto Fee Schedule.

(Id.~~

14, 16). Plaintiffs

seek liability and damages on behalf of t}le classes of individuals insured by Defendant who have
sustained injuries in automobile accidents and are entitled to medical benefits pursuant to New
Jersey law and of ambulatory surgical facilities who performed procedures for which Defendant
refused payment. (Id.

~~

19-23). Plaintiffs seek declaratory judgment that Defendant must pay

for those procedures and assert related contract claims and violation of the New Jersey Consumer
Fraud Act. (Id.

~~ 41-79).

On April 7, 2017, Defendant moved to compel arbitration and to stay proceedings. (ECF
No. 19.) The Court denied this motion on August 9, 2017. (ECF Nos. 30, 31.) On August 23,
2017, Defendant moved for reconsideration of the Court's decision to deny its motion. (ECF No.
32.) This motion is presently before the Court.

LEGAL STANDARD
Reconsideration is an extraordinary remedy that is to be granted ''very sparingly." L.
Civ. R. 7.l(i) cmt. 6(d); Friedman v. Banko/Am., N.A., 2012 WL 3146875, at *2 (D.N.J. Aug. 1,
2012). Pursuant to Federal Rule of Civil Procedure 59(e) and the Local Rules, a motion for
reconsideration may be based on one of three grounds: ( 1) an intervening change in controlling
law; (2) new evidence not previously available; or (3) to correct a clear error oflaw or to prevent

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manifest injustice. See North River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d
Cir. 1995).
A party may seek reconsideration if it believes the Judge overlooked a matter or
controlling decision, L. Civ. R. 7 .1 (i), but it is not an opportunity to raise new matters or
arguments that could have been raised before the original decision was made, see Bowers v.
NCAA, 130 F. Supp. 2d 610, 613 (D.N.J. 2001). Nor is a motion for reconsideration an
opportunity to ask the Court to rethink what it has already thought through. See Oritani S & L v.
Fidelity & Deposit, 744 F. Supp. 1311, 1314 (D.N.J. 1990). Rather, a motion for reconsideration
may be granted only if there is a dispositive factual or legal matter that was presented but not
considered that would have reasonably resulted in a different conclusion by the court. White v.
City o/Trenton, 848 F. Supp. 2d 497, 500 (D.N.J. 2012); Champion Labs., Inc. v. Metex Corp.,
677 F. Supp. 2d 748, 750 (D.N.J. 2010). Mere disagreement with a court's decision should be
raised through the appellate process and is inappropriate on a motion for reconsideration. United
States v. Compaction Sys. Corp., 88 F. Supp. 2d 339, 345 (D.N.J. 1999).

DISCUSSION
Defendant claims that the Court made a clear error of law and overlooked precedent on
this issue. The case deals with New Jersey's "deemer statute," N.J.S.A. 17:28-1.4, which

extends New Jersey Personal Injury Protection ("PIP") coverage to out-of-state insureds who
were injured in-state or utilized in-state care statute. Specifically, Defendant first argues that the
Court should reconsider the breadth of the deemer statute and whether the deemer statute
incorporates PIP's dispute resolution provision, N.J.S.A. 39:6A-5.1. Plaintiffs claim that
Defendant is not entitled to relief pursuant to the reconsideration standard because he merely
puts forth the same case law that the Court relied on in its initial opinion in support of an

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alternative outcome. While Defendant does repeat some of the same arguments, review of its
original Motion to Compel Arbitration leads the Court to realize it overlooked important law
related to the legislative history of PIP amendments. (See Mot. Compel Arb. at 11 (citing
Coalition for Quality Health Care v. N.J. Dep 't of Banking and Ins., 791A.2d1085, 1108-09

(N.J. Super. Ct. App. Div. 2002)). The Court did consider the amendments to the PIP arbitration
provision in light of State Farm Mutual Auto Insurance Co. v. Crocker, 672 A.2d 226 (N.J.
Super. Ct. App. Div. 1996). (ECF No. 30 at 4-5.) The Court, however, did not consider the
underlying purpose of these amendments, as Defendant urged it to initially, nor the effect of this
purpose on the breadth of the deem er statute. Reconsideration is justified to avoid any potential
injustice that may result.

I.

The Breadth of the Deemer Statute
The law regarding the scope of the deemer statute is facially unclear. The plain-text of

the deemer statue only references certain coverage provisions, and many cases only discuss these
limited provisions based on their facts. N.J.S.A. 17:28-1.4; (Op. at 4, Aug. 9, 2017, ECF No.
30.) Review of additional deemer statue case law, however, permits a broader reading than
initially afforded. These cases suggest that the deeiner statute converts out-of-state policies into
PIP policies in their entirety. See, e.g., Cooper Hosp. Univ. Med. Ctr. v. Prudential Ins. Co., 876

A.2d 335, 338 (N.J. Super. Ct. App. Div. 2005) ("Generally speaking, the deemer statute
effectively mandates that out-of-state policies within its ambit are automatically construed as
New Jersey policies when the covered vehicle is involved in a New Jersey accident."); Crocker,
672 A.2d at 229. This reading is consistent with the case law Defendant places most emphasis
on in its Motion for Reconsideration, DiOrio v. Nationwide Mut. Ins. Co., 17 F.3d 657, 660 (3d
Cir. 1994) ("In essence, what the Pennsylvania courts have done is to read the 'deeiner' statute as

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being theoretically, although not physically, attached to the Pennsylvania policy in the nature of
an endorsement applicable to an accident occurring in New Jersey."). (Defs.' Mot. Recons. at 5,
ECF No. 32-1.) Additionally, the dispute resolution provision specifically provides for
arbitration for claims arising from the coverage provisions enumerated in the deemer statute,
underscoring the harmony between the deemer statute and both substantive and procedural
provisions within PIP. Compare N.J.S.A. 39:6A-5.l, with N.J.S.A. 17:28-1.4.
The case most analogous to this matter, State Farm Mutual Auto Insurance Co. v.

Crocker, found that the deemer statute incorporated the old version of PIP's dispute resolution
provision. The old version of the statute mandated that all insurers must provide any claimant
with the option of submitting to arbitration. Crocker, 672 A.2d at 229. The new version
provides that any party to the dispute may compel dispute resolution, thus empowering insurance
companies to compel arbitration. N.J.S.A. 39:6A-5.1. The Court previously distinguished

Crocker based on this amendment, inferring that the old statute gave claimants the right to
compel arbitration because insurers were aware of statutory insurance codes and provisions such
as PIP. (Op. at 4-5.) Thus, the old dispute resolution provision could be incorporated into outof-state contracts for claimants to exercise against insurers who were on notice. (Id.) An
examination of the legislative history of the amendment negat~s the Court's distinction and
inference. The amendment is part of a broader regulatory scheme designed to promote more
efficient handling of insurance claims, specifically through more frequent extra-judicial dispute
resolution. See Coalition for Quality Health Care, 791 A.2d at 1092, 1108-09; 1998 N.J. Sess.
Law Serv. Ch. 21 (Senate 3) (WEST).
The combination of the New Jersey courts' liberal treatment of the deemer statute and the
underlying purpose of the arbitration provision-designed to encourage more dispute resolution

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by expanding the class of parties who can compel arbitration-together imply that the deemer
statute should incorporate PIP's amended dispute resolution provision. Therefore, pursuant to
the deemer statute, an insurance company can compel an out-of-state claimant to arbitrate. The
Court's original holding was misplaced, and it would be unjust and inconsistent with the scheme
set forth by the New Jersey legislature to find otherwise.
II.

Notice of the Possibility of Arbitration
Defendant next argues that regardless of the deemer statute's breadth, Plaintiffs did have

notice of the potential for arbitration. (Def.' s Mot. Recons. at 11-13.) The Court need not
address this argument because it finds that the deemer statute incorporates the PIP dispute
resolution provision. Therefore, whether Plaintiff had adequate notice to be subject to arbitration
is assessed under PIP case law. The Court's original holding that Plaintiff would need notice to
be compelled to arbitrate is not legally incorrect-New Jersey and federal law on arbitration
clauses create a high bar requiring an unambiguous, fair, and voluntary agreement to arbitrate.
See Garfinkel v. Morristown Obstetrics & Gynecology Assocs., P.A., 773 A.2d 665, 670 (N.J.

2001); Century Indem. Co. v. Certain Underniriters at Lloyd's, London, 584 F.3d 513, 523 (3d
Cir. 2009). Under the auspices of PIP, however, this is not the case.
As discussed above, PIP's dispute resolution provision was amended to empower any

party to a dispute to compel arbitration, including insurance companies. N.J.S.A. 39:6A-5.l;
Delpome v. Travelers Ins. Co., 2012 WL 6632802, at *2 (N.J. Super. Ct. App. Div. Dec. 21,

2012) (per curiam). New Jersey courts consistently hold that insurance companies can compel
arbitration with insureds-based on the statute alone. See, e.g., Delpome, 2012 WL 6632802, at
*2 (finding the statute gave defendant insurer the right to compel arbitration, despite an allegedly
ambiguous arbitration provision in an insurance contract); N.J. Mfrs. Ins. Co. v. Univ. Physician

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Assocs., 2008 WL 238518, at *3 (N.J. Super. Ct. App. Div. Jan. 30, 2008). Therefore, because
the deemer statute treats Plaintiff's insurance policy as though it were a New Jersey policy,
including the arbitration provision, the statutory notice of arbitration is enough to justify
compelling arbitration in the instant case.

CONCLUSION
For the foregoing reasons, Defendant's motion for reconsideration will be granted. A
corresponding order will follow.

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