AMBULATORY SURGICAL CENTER OF SOMERSET v. ALLSTATE FIRE CASUALTY INSURANCE COMPANY
3:16-cv-05378
D.N.J.Oct 5, 2017Background
- Juan Gonzalez was injured in a New Jersey auto accident and underwent surgery at Ambulatory Surgical Center of Somerset; Allstate refused payment because the procedure lacked a code in the NJ Auto Fee Schedule.
- Plaintiffs sued Allstate seeking declaratory relief, contract damages, and NJCFA relief on behalf of insureds and ASC providers for unpaid procedures.
- Allstate moved to compel arbitration under plaintiffs' out-of-state auto policy and the court denied that motion on August 9, 2017.
- Allstate filed a motion for reconsideration, arguing the New Jersey "deemer" statute (N.J.S.A. 17:28-1.4) converts out-of-state policies into New Jersey PIP policies and thus incorporates PIP's arbitration provision (N.J.S.A. 39:6A-5.1).
- The court granted reconsideration, concluding it had overlooked legislative history and case law supporting a broader reading of the deemer statute that includes PIP’s amended arbitration provision, so an insurer may compel arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of the deemer statute | Deemer only imports limited coverage provisions; does not import PIP arbitration | Deemer converts out-of-state policy into a NJ PIP policy in full, including arbitration | Court: deemer can be read broadly to import PIP’s arbitration provision |
| Whether PIP’s dispute-resolution amendment is incorporated | Plaintiffs: incorporation not automatic; prior version favored claimants | Def.: legislative purpose and case law show amendment expands who may compel arbitration and should apply via deemer | Court: legislative history and liberal deemer treatment support incorporation of amended provision |
| Need for notice/consent to arbitrate | Plaintiffs: insurer must have unambiguous, voluntary arbitration agreement or notice to bind claimant | Def.: under PIP statute, statutory right allows insurers to compel arbitration without contractual notice | Court: because deemer imports PIP, statutory arbitration authorization suffices to compel arbitration |
| Reconsideration standard | Plaintiffs: Allstate merely reargues prior points; no basis to reconsider | Def.: Court overlooked controlling precedent and legislative history supporting a different outcome | Court: granted reconsideration as it overlooked dispositive law and legislative purpose |
Key Cases Cited
- Cooper Hosp. Univ. Med. Ctr. v. Prudential Ins. Co., 876 A.2d 335 (N.J. Super. Ct. App. Div. 2005) (deemer statute construed to treat certain out-of-state policies as New Jersey policies)
- State Farm Mut. Auto. Ins. Co. v. Crocker, 672 A.2d 226 (N.J. Super. Ct. App. Div. 1996) (deemer statute incorporated earlier PIP arbitration provision)
- DiOrio v. Nationwide Mut. Ins. Co., 17 F.3d 657 (3d Cir. 1994) (deemer statute treated as endorsement attaching New Jersey law to out-of-state policy for accidents in New Jersey)
- Coalition for Quality Health Care v. N.J. Dep't of Banking & Ins., 791 A.2d 1085 (N.J. Super. Ct. App. Div. 2002) (legislative and regulatory context supporting PIP amendments and expanded dispute resolution)
- Garfinkel v. Morristown Obstetrics & Gynecology Assocs., P.A., 773 A.2d 665 (N.J. 2001) (arbitration clauses require clear, voluntary agreement under New Jersey law)
- Century Indem. Co. v. Certain Underwriters at Lloyd's, London, 584 F.3d 513 (3d Cir. 2009) (federal standard on arbitration clause enforceability)