Opinion
DOCKET NO. A-2280-13T4
03-25-2015
FIRST KEYSTONE RISK RETENTION GROUP, Plaintiff-Appellant, v. SELVIN HERNANDEZ, AMIGO TAXI, and LORISSA VOLPONE, Defendants, and PALISADES SAFETY & INSURANCE COMPANY, Defendant-Respondent.
Law Offices of David A. Avedissian, L.L.C., attorney for appellant (Richard E. Green, on the brief). Law Offices of Debra Hart, attorney for respondent (Jennifer L. Parsons, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Ashrafi and Kennedy. On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-0021-13. Law Offices of David A. Avedissian, L.L.C., attorney for appellant (Richard E. Green, on the brief). Law Offices of Debra Hart, attorney for respondent (Jennifer L. Parsons, of counsel and on the brief). PER CURIAM
Plaintiff First Keystone Risk Retention Group, which insured a taxi cab involved in an accident, appeals from judgment confirming an inter-company arbitration award. We affirm.
The facts pertaining to the motor vehicle accident are revealed in a police report and are not disputed in the appeal. On July 8, 2008, a cab driven by Selvin Hernandez pulled out of a shopping center into the right-of-way of a vehicle driven by Lorissa Volpone. The collision injured Volpone. The cab belonged to Amigo Taxi, Inc., and was insured by First Keystone. The vehicle Volpone was driving was insured by defendant Palisades Safety & Insurance Company.
Palisades paid medical and other expenses on Volpone's behalf under the Personal Injury Protection (PIP) provisions of its policy. Subsequently, Palisades filed a demand with Arbitration Forums, Inc. for inter-company arbitration with First Keystone pursuant to N.J.S.A. 39:6A-9.1. It submitted the police report, documents pertaining to Volpone's injuries, and an account of the expenses it paid on her behalf. According to the arbitration decision, First Keystone did not file an answer to the arbitration demand or otherwise contest the amount of Palisades' claim of $32,499.45 but denied any liability for the accident.
The arbitrator found that Hernandez was 100% liable for the accident and awarded $28,685.19 to Palisades, which was the amount of its payments less a credit of $3,814.26 for prior payment from First Keystone. The arbitration award was issued on October 26, 2012.
By letter dated November 13, 2012, an attorney for First Keystone wrote to Arbitration Forums claiming that First Keystone was denying coverage on the claim because Hernandez had not been listed by Amigo Taxi, Inc., and cleared by First Keystone as a permissive driver under the insurance policy. As an alternative, First Keystone claimed that coverage should be "stepped down" to the minimum mandatory coverages of $15,000/$30,000 and that First Keystone had already settled Volpone's personal injury claim for more than that amount. Based on these contentions, First Keystone asserted it was not obligated to pay the arbitration award.
On January 7, 2013, First Keystone filed a complaint for declaratory judgment in the Superior Court to set aside the arbitration award. It again alleged that Hernandez was not an authorized driver under its policy and, alternatively, that its maximum liability for Volpone's PIP benefits was $15,000.
Palisades filed an answer and a counterclaim seeking to confirm the arbitration award. On August 29, 2013, the trial court granted Palisades' motion to confirm the award in the amount of $28,685.19, plus attorney's fees and costs.
On appeal, First Keystone repeats the arguments it made in the trial court. We reject these arguments because they should have been raised in the arbitration proceedings, if there is any merit to them, rather than presented for the first time after the arbitration award.
Pursuant to N.J.S.A. 39:6A-9.1(a), an insurer such as Palisades that has paid PIP benefits as a result of an accident has the right to recover the amount of its payments from any tortfeasor that does not have PIP insurance coverage. The First Keystone commercial auto policy issued to Amigo Taxi, Inc., did not provide PIP coverage. When the insurance carriers cannot agree on liability for the PIP benefits, subsection (b) of the same statute requires that the dispute be resolved by inter-company arbitration.
An insurer may seek to have a court vacate an arbitration award only upon proof of at least one of six statutory grounds: it was "procured by corruption, fraud, or other undue means"; there is evident corruption, partiality, or misconduct by the arbitrator; the arbitrator refused to postpone a hearing or consider evidence material to the controversy, or otherwise conducted the hearing so as to substantially prejudice a party; the award exceeded the arbitrator's powers; there was no agreement to arbitrate; or the arbitration proceeded without proper notice. N.J.S.A. 2A:23B-23(a)(1)-(6). First Keystone did not prove any of these grounds. It claimed it was not obligated to provide coverage to its insured, the taxi cab company, because Hernandez was not an authorized driver under the insurance policy. But that claim is not a post-arbitration defense. It should have been but was not raised during the arbitration.
Although First Keystone states in its appellate brief that the arbitrator did not consider the coverage defense, it has provided no evidence that it raised such a defense in the arbitration proceedings. The arbitrator's PIP decision of October 26, 2012, indicates that First Keystone did not initially file an answer to Palisades' arbitration demand and then only denied liability for causing the accident. Although the decision names a representative for First Keystone in the arbitration, that individual is not the attorney who wrote after the arbitration award to raise coverage defenses. The attorney's letter was not a timely defense to Palisades' claim in the arbitration.
First Keystone presented no ground to the court to vacate the award as a result of its own failure to make timely presentation of all its defenses to the arbitrator. Cf. Selective Ins. Co. v. Nat'l Cont'l Ins. Co., 385 N.J. Super. 62, 69 (App. Div.), certif. denied, 188 N.J. 218 (2006) (insurer not relieved of arbitration award when it failed to pursue potential remedies in the arbitration proceedings). The trial court correctly confirmed the award.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION