Court Opinion

ID: 2645724
Source: CourtListenerOpinion
Date Created: 2013-12-12 01:04:32.750623+00
Date Added: 2024-06-11T12:51:13.794882
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
               APPROVAL OF THE APPELLATE DIVISION

                                  SUPERIOR COURT OF NEW JERSEY
                                  APPELLATE DIVISION
                                  DOCKET NO. A-1311-12T3

IRVIN B. BEAVER,

     Plaintiff-Appellant,               APPROVED FOR PUBLICATION

v.                                         December 11, 2013

                                          APPELLATE DIVISION
MAGELLAN HEALTH SERVICES,
INC., MAGELLAN BEHAVIORAL
HEALTH, INC., and HORIZON
BLUE CROSS BLUE SHIELD OF
NEW JERSEY,

     Defendants-Respondents.
_______________________________

         Argued October 21, 2013 – Decided December 11, 2013

         Before    Judges   Parrillo,      Kennedy      and
         Guadagno.

         On appeal from Superior Court of New Jersey,
         Law Division, Middlesex County, Docket No.
         L-3465-12.

         Justin Lee Klein argued the cause for the
         appellant (Wilentz Goldman & Spitzer, and
         Hobbie, Corrigan & Bertucio, attorneys;
         Angelo J. Cifaldi and Jacqueline DeCarlo, of
         counsel and on the brief; Mr. Klein, on the
         brief).

         Thomas F. Quinn argued the cause for
         respondents   (Wilson,    Elser,  Moskowitz,
         Edelman & Dicker, LLP, attorneys; Mr. Quinn
         and Joanna Piorek, on the brief).
        The opinion of the court was delivered by

KENNEDY, J.A.D.

       Under what circumstances may a litigant pursue common law

and statutory causes of action in the Law Division, rather than

appeal from State final agency determination, where the merits

of the agency determination are at issue?           This is the question

we address in deciding this appeal.

       Plaintiff appeals from an October 12, 2012 order of the Law

Division dismissing his complaint against defendants Magellan

Health Services, Inc., Magellan Behavioral, Inc., and Horizon

Blue    Cross/Blue    Shield   of    New   Jersey    ("defendants"   when

referenced collectively, "Magellan" or "Horizon" when referenced

individually).       Plaintiff argues, among other things, that the

motion judge erred in applying the standards governing a motion

to dismiss under Rule 4:6-2, and in determining that the Law

Division lacked subject matter jurisdiction over the matter.

       We have considered plaintiff's arguments in light of the

record and applicable law.          For reasons stated hereinafter, we

affirm.

                                    I.

       We derive the facts from the record developed in the Law

Division and the administrative proceedings which preceded the

filing of plaintiff's complaint in the Law Division.

                                      2                          A-1311-12T3
       Plaintiff is a former public employee and received health

insurance coverage for himself and his family through the NJ

Plus and, later, the NJ Direct health benefits programs, which

at    all   times    relevant         to    this          matter    were    administered        by

Horizon      on   behalf         of    the        State         Health     Benefits      Program

(Program).        The      Program,        and     its      governing      body,    the     State

Health Benefits Commission (SHBC), were established by the New

Jersey Health Benefits Program Act (the Act), N.J.S.A. 52:14-

17.24   to    -45.         The   purpose          of      the    Program    is   "to     provide

comprehensive health             benefits for eligible public employees and

their families . . . .                It establishes a plan for state funding

and    private    administration             of       a   health     benefits      program[.]"

Heaton v. State Health Benefits Comm'n, 264 N.J. Super. 141, 151

(App. Div. 1993).           "The SHBC contracts with health insurers to

provide various benefits plans to program participants."                                    Green

v. State Health Benefits Comm'n, 373 N.J. Super. 408, 413 (App.

Div.    2004)(citing        N.J.S.A.         52:14-17.28).               "The    State     Health

Benefits Program is, in effect, the State of New Jersey acting

as a self-insurer."              Burley v. Prudential Ins. Co. of Am., 251

N.J. Super. 493, 495 (App. Div. 1991).                              In essence, the State

pays the benefits and Horizon administers the claims.

       Although      the     State      contracts            with    health      insurers        to

administer various benefit plans for program participants, the

                                                  3                                      A-1311-12T3
SHBC alone has the authority and responsibility to make payments

on claims and to limit or exclude benefits.                           N.J.S.A. 52:14-

17.29(B).           Additionally,      the       SHBC   has    final       authority      to

adjudicate disputes between plan members and State-contracted

claims administrators, and may refer such disputes to the Office

of Administrative Law (OAL) for an evidentiary hearing.                             Green,

supra, 373 N.J. Super. at 414; Burley, supra, 251 N.J. Super. at

500.

       Horizon          hired   Magellan     to     manage      mental      health       and

substance abuse benefits for eligible NJ Plus members.                            Magellan

would       conduct       "utilization       management        reviews"      of     claims

submitted by members, and would decide if the treatment was

medically needed, and, if so, the level and length of treatment.

As noted, however, the SHBC itself had the final authority and

responsibility to adjudicate any claim disputes.

       On    February       10,    2008,     plaintiff's       son,    a     minor,      was

admitted          for    inpatient,      residential          care    at     the      Caron

Foundation,         a    residential       treatment     facility      for     substance

abuse.       Initially, Caron prescribed thirty-one days of inpatient

care,       but    later    revised    its       recommendation       to     include      an

additional ninety days of inpatient, residential treatment.

       Plaintiff submitted a claim for coverage and on February

26,     2008,       Magellan      advised    that       it    would    not     authorize

                                             4                                     A-1311-12T3
residential       substance     abuse        treatment      "as   of"   February      25,

because plaintiff's son "no longer shows evidence" that he needs

residential       treatment.          Plaintiff     challenged      the    denial     and

Magellan undertook a "Level 1 appeal review."                       On February 28,

Magellan advised that its prior denial was proper, and cited a

telephone conversation between one of the son's doctors at Caron

and    its   own     physician     advisor       in    which      the   son's      doctor

allegedly agreed that outpatient care was the appropriate level

of treatment.

       Plaintiff shortly learned that Magellan's physician advisor

had,   in    fact,    not    spoken     to    the   particular      Caron     physician

identified in Magellan's notification of February 28, but to

another of the son's           doctors who alleged he never stated that

the    son   required       only      outpatient      treatment.          Accordingly,

plaintiff     sought        further     review,       and    on   March      11,    2008,

presented     a    "second    level     appeal"       for   coverage    to    Horizon's

Member Appeals Subcommittee.

       On March 14, Horizon overturned the denial of coverage for

residential treatment for the period of February 26 to March 4,

but denied coverage after that date, finding that plaintiff's

son "did not show any evidence" of needing residential treatment

thereafter.        Plaintiff next appealed to the SHBC, which,                         by

                                             5                                  A-1311-12T3
letter dated February 17, 2009, upheld the denial of benefits

after March 4, 2008.    The letter stated, in part:

           The denial is based on your presentation at
           the meeting as well as the documents you
           provided during and prior to the meeting.
           Magellan's    medical    director    gave    a
           background   summary   of   the   appeal   and
           indicated that he reviewed the additional
           medical   notes   received  from   the   Caron
           Foundation.    He indicated that [your son]
           did not meet the ASAM [American Society of
           Addiction Medicine] criteria after March 5,
           2008 for inpatient residential treatment.

           Your written request for appeal of the
           initial administrative decision must specify
           the exact reason or reasons that you are
           using as the basis for the request. It must
           also include any evidence or material that
           can be used to support your basis of appeal.

           The Commission will decide whether to grant
           your request for a hearing in the Office of
           Administrative Law upon receipt of your
           request and the supporting documentation.

The letter also advised that if the appeal were forwarded to the

OAL, an administrative law judge (ALJ) would consider evidence

presented and render a decision, which the SHBC could accept,

modify   or   reject.       The   SHBC      would      then    issue     a    final

administrative   decision    "which       may   then    be    appealed       to   the

Superior Court of New Jersey, Appellate Division."

    Plaintiff elected to pursue a further appeal and the matter

was transferred to the OAL, where an evidentiary hearing was

held.    On October 11, 2011, the ALJ issued her initial decision

                                      6                                  A-1311-12T3
recommending denial of plaintiff's appeal.    She explained, in

part, as follows:

              Under the NJ Plus plan in place at the
         time of the claim at issue in this matter,
         Horizon contracted with Magellan to manage
         its   mental   health   and  substance   abuse
         treatment claims.      Initially, [plaintiff]
         takes issue with Magellan's role in managing
         these claims, in general and specifically as
         to his son's treatment.      While Magellan's
         actions are under review here as to his
         son's   claim,   the   issue   of   Magellan's
         "gatekeeper" role for the state plan is
         beyond the scope of this matter.      At issue
         in this matter is whether respondent SHBC
         properly determined that the criteria for
         medical necessity to continue inpatient
         treatment at Caron for [the son] was no
         longer met.    [Plaintiff] has the burden of
         proof in this matter and must prove his case
         by a preponderance of the credible evidence.
         Atkinson v. Parsekian, 37 N.J. 143 (1962).

              A review of the record in this matter
         shows that [plaintiff] has failed to meet
         that burden of proof.      Although he has
         raised substantive issues regarding the
         manner in which Magellan handled this claim,
         he did not submit a sufficient quantum of
         evidence to prove by a preponderance of the
         credible evidence that the SHBC erred in its
         decision.

              [Plaintiff] did show that Magellan was
         incorrect when it cited [the son's] treating
         physician as the Caron staff member with
         whom it initially discussed his treatment.
         The record also supports his contention that
         Magellan's records were further incorrect in
         citing   Caron  staff   as   supporting  his
         transfer to intensive outpatient treatment.
         Given the seriousness of the treatment at
         issue, it is of concern that Magellan denied
         further inpatient treatment on the basis of

                               7                          A-1311-12T3
         faulty information in its records.        That
         initial denial however was corrected during
         the first and second level appeal process
         and   residential  treatment    was   approved
         through March 4, 2008.    The issue therefore
         is whether [plaintiff] has proven that the
         SHBC   erred   in  its   decision   that   the
         residential level of treatment was not
         medically necessary after that time.

              In support of his contention that
         continued     residential      treatment      was
         necessary, [plaintiff] presented treatment
         notes    from     Magellan's      records     and
         correspondence from Caron staff directors.
         The correspondence from the treating staff
         at Caron supports continued residential
         treatment, citing relevant       ASAM [American
         Society of Addiction Medicine] criteria.
         Balanced against that however, is the expert
         medical   testimony    and    report     of   Dr.
         O'Donnell presented on behalf of respondent.
         His testimony also addressed the relevant
         criteria for medical necessity, reaching a
         different conclusion than that of the Caron
         doctors.   Dr. O'Donnell's interpretation of
         the ASAM criteria was more conservative than
         that of the Caron physicians as set forth in
         their correspondence.        In weighing the
         evidence, however, greater weight is on the
         side of respondent.         While the Caron
         physicians were the treating doctors, only
         their   correspondence    was     presented    in
         evidence.     [Plaintiff] presented neither
         their curriculum vitae nor their testimony
         in support of his case. As such neither
         their credentials nor their testimony was
         subject   to    the    scrutiny      and    cross
         examination undergone by Dr. O'Donnell.

              As [plaintiff] has not met his burden
         of proof, his appeal is denied.

On November 14, 2011, the SHBC adopted the ALJ's findings and

conclusions.

                                8                            A-1311-12T3
      On December 28, 2011, plaintiff filed a notice of appeal

from the SHBC's final decision.                   Plaintiff later voluntarily

withdrew his appeal and the appeal was dismissed on May 18,

2012.

      On May 14, 2012, plaintiff filed a complaint in the Law

Division seeking "relief for [d]efendants' denial of substance

abuse treatment as a violation of plaintiff's health plan" and

named only Horizon and Magellan as defendants.                        The complaint

recited the history of plaintiff's efforts to secure coverage

for his son's inpatient, residential substance abuse treatment

and asserted four causes of action: (1) breach of contract; (2)

breach      of    fiduciary    duty;   (3)      violation    of     the   New    Jersey

Consumer     Fraud      Act,   N.J.S.A.    56:8-1    to     —184    (CFA);      and   (4)

unjust enrichment.

      In support of the first count alleging breach of contract,

plaintiff asserted that "under the terms of defendants' contract

with [] plaintiff, defendants are required to provide coverage

for   all    inpatient     treatment      for    mental     health    and    substance

abuse disorders" and breached that contract by their denial of

coverage         for   inpatient   treatment.         In      the    second      count,

plaintiff asserted that defendants violated the duty of care

they owed as fiduciaries by "setting limitations on payments and

denying or reducing coverage" for substance abuse treatment.

                                           9                                    A-1311-12T3
      The        third         count         alleged            that          defendants'

"wrongful decision to deny payment for" the continued inpatient

treatment      for    plaintiff's      son       constituted     an     unconscionable

commercial practice under the CFA.                  The last count stated that

defendants have been "unjustly enriched" through their use of

funds   that     should   have      been    used    to    pay    for     the   inpatient

treatment of plaintiff's son.

      Defendants       moved   to     dismiss      plaintiff's         complaint     under

Rule 4:6-2(a) (lack of jurisdiction) and Rule 4:6-2(e) (failure

to   state   a    claim).        In    a    lengthy      opinion       from    the   bench

delivered on October 12, 2012, the motion judge considered the

history of plaintiff's claim as recited in the pleadings, and

held that "plaintiff should have instituted this action in the

Appellate Division" and that a transfer of the matter to the

Appellate Division under Rule 1:13-4(a) at that point was time-

barred.

      The motion judge then entered an order of dismissal and

this appeal followed.

                                           II.

      Plaintiff       argues   that    his       complaint   does       not    constitute

"one of the 'rare instances' in which a complaint should be

dismissed as a matter of law, prior to the exchange of any

discovery."          Further, he asserts that his complaint does not

                                            10                                   A-1311-12T3
challenge the SHBC's final administrative action, but rather is

a   separate   action   at    law   alleging      statutory       and    common   law

causes of action against Magellan and Horizon.                Plaintiff relies

upon Rinaldo v. RLR Inv., LLC, 387 N.J. Super. 387 (App. Div.

2006), and Burley, supra, 251 N.J. Super. 493, in support of the

latter argument.

      Initially, we observe that despite the reference to Rule

4:6-2(e) in defendants' brief in the Law Division, the motion

judge held that the case must be dismissed on jurisdictional

grounds, thereby embracing defendants' arguments under Rule 4:6-

2(a).    "Whether subject matter jurisdiction exists presents a

purely legal issue . . . which we review de novo."                      Santiago v.

N.Y. & N.J. Port Auth., 429 N.J. Super. 150, 156 (App. Div.

2012),   certif.    denied,    214       N.J.    175    (2013);    see    Manalapan

Realty, L.P. v. Twp. of Manalapan, 140 N.J. 366, 378 (1995).

Accordingly, the issue before us is not whether the four causes

of action alleged in plaintiff's complaint are sufficiently pled

under Rule 4:6-2(e), but rather whether plaintiff can assert

those    causes    of   action      in     the    Law     Division       under    the

circumstances presented.            As noted, this is an issue of law

which we review de novo.

      Pursuant to the Act, the SHBC "shall establish a health

benefits program for the employees of the State," together with

                                         11                                 A-1311-12T3
the   "rules   and   regulations   as    may   be    deemed   reasonable   and

necessary   for   the   administration     of"      the   program.   N.J.S.A.

52:14-17.27.      Pursuant to the enabling legislation's grant, the

SHBC adopted a comprehensive regulatory appeals process:

            (a) Any member of the [Plan] who disagrees
            with    the    decision   of    the   claims
            administrator and has exhausted all appeals
            within the plan, may request that the matter
            be considered by the Commission. . . .    It
            shall be the responsibility of the member to
            provide the Commission with any medical or
            other information that the Commission may
            require in order to make a decision.

            (b) . . . .

            (c) Notification of all Commission decisions
            will be made in writing to the member and
            the    following    statement    shall    be
            incorporated in every written notice setting
            forth the Commission's determination in a
            matter where such determination is contrary
            to the claim made by the claimant or his or
            her legal representative:

                  "If   you    disagree   with   the
                  determination of the Commission in
                  this matter, you may appeal by
                  sending a written statement to the
                  Commission within 45 days from the
                  date of this letter informing the
                  Commission of your disagreement
                  and all of the reasons therefor.
                  If no such written statement is
                  received within the 45-day period,
                  this    determination   shall   be
                  considered final."

            (d) Any member who disagrees with the
            Commission's   decision  and   submits   the
            written statement as set forth in (c) above
            within 45 calendar days shall be notified of

                                    12                               A-1311-12T3
          the disposition of the appeal in one of two
          ways:

                 1. The Commission shall determine
                 whether to grant an administrative
                 hearing on the basis of whether
                 the matter involves contested facts
                 or is solely a question of law.
                 If the appeal involves solely a
                 question of law, the Commission
                 shall likely deny an administrative
                 hearing request. If the request
                 for an administrative hearing is
                 denied, the Commission shall issue
                 detailed findings of fact and
                 conclusions of law. These findings
                 and conclusions shall become the
                 Commission's final administrative
                 determination that may be appealed
                 to the Superior Court, Appellate
                 Division.

                 2. If the appeal involves disputed
                 facts, the Commission shall approve
                 an administrative hearing request
                 and transmit the matter to the
                 Office of Administrative Law. Upon
                 completion of this hearing, the
                 Administrative   Law   Judge   will
                 submit to the Commission an initial
                 decision that the Commission may
                 adopt, reject or modify.     If the
                 Commission rejects or modifies the
                 initial decision, it shall issue
                 detailed findings of fact and
                 conclusions of law that will become
                 the Commission's final administra-
                 tive determination that may then
                 be appealed to the Superior Court,
                 Appellate Division.

                 [N.J.A.C. 17:9-1.3.]

The   language   in   Horizon's   handbook   tracks   the   regulatory

language adopted by the SHBC.          Further, as already noted, we

                                  13                          A-1311-12T3
have consistently recognized the statutory and regulatory scheme

that   requires     disputes    over     eligibility      and   benefits     to   be

submitted first to the SHBC, and, only thereafter, to this court

for resolution.       See Burley, supra, 251 N.J. Super. 493; Green,

supra, 373 N.J. Super. 408; Murray v. State Health Benefits

Comm'n.,     337    N.J.     Super.      435,    439-40    (App.    Div.      2001)

(explaining the statutory and regulatory scheme).

       Plaintiff     contends       he   is     not   challenging     the      SHBC

determination in his present complaint, but rather is asserting

contract   and     tort    claims   against     the   Program   administrators.

Plaintiff essentially argues that the SHBC final agency action

is irrelevant to his asserted causes of action.                      Defendants

argue that the language in plaintiff's complaint shows plainly

that, irrespective of the causes of action asserted, plaintiff

is simply seeking coverage for his son's inpatient substance

abuse treatment, and that a reversal of the SHBC determination

is essential to plaintiff's complaint.                Our examination of the

causes of action set forth in plaintiff's complaint is therefore

pivotal to our determination of jurisdiction.

       We begin with an examination of the authority cited                         by

plaintiff and thereafter we shall examine the language of the

complaint.

                                         14                                A-1311-12T3
       In   Rinaldo,     plaintiffs          brought     an   action    against       a

neighboring       landowner    who    had    obtained     a   freshwater   wetlands

permit from the Department of Environmental Protection (DEP) to

construct     an    access    road        over   protected    wetlands.    Rinaldo,

supra, 387 N.J. Super. at 392-93.                   Plaintiffs had not received

notice of the permit application and brought an action to enjoin

the construction of the road and a corresponding "mitigation

project" required by the DEP.                    Ibid.   Plaintiffs also sought

money damages for injury to their farm, and asserted claims

against     the    landowner     and       its    contractors    for   negligence,

trespass, conversion and intentional interference with property

rights.     Id. at 393-94.

       On   motion,   the     Chancery      Division     transferred   the    entire

case to the Appellate Division as, in effect, an appeal from a

final decision of the DEP.                  Id. at 394.         We held that the

Chancery     Division   erred        in    concluding    that   plaintiffs'      tort

claims against the landowner and other private parties should

have been transferred to the Appellate Division.                       Id. at 399-

400.   We stated, in part,

                Plaintiffs could have filed a notice of
             appeal to this court from the DEP's wetlands
             permit and mitigation project approvals and
             filed a separate action in the Chancery
             Division asserting their tort claims against
             the   private   defendants.  The  fact  that
             plaintiffs    elected   to  challenge  state
             administrative agency decisions and assert

                                            15                               A-1311-12T3
             tort claims against private parties in a
             single complaint does not vest this court
             with jurisdiction over claims that the Court
             Rules allocate to the jurisdiction of the
             Chancery or Law Division. See Maisonet v.
             N.J. Dep't of Human Servs., 140 N.J. 214,
             226-28 (1995).

             [Id. at 400.]

We   added     that    even      if     plaintiffs          were     unsuccessful        in

challenging the DEP wetlands permit in the Appellate Division,

this would "not foreclose them from pursuing their tort claims

against the private defendants."               Ibid.

     In      Burley,   plaintiff,        a     State        employee       with    health

insurance under the Program, brought suit in the Law Division

against Prudential, the State's claims administrator,                             for bad

faith   in     declining    to    pay    the        full    amount       sought   by    her

physician for a procedure he had performed, and in its refusal

to advise in advance of the "customary fee" it would approve for

her son's prescribed tonsillectomy.                        Burley, supra, 251 N.J.

Super. at 494-96.          The suit was dismissed in the Law Division

based   upon    plaintiff's      failure       to    exhaust       her   administrative

remedies.      Id. at 494-95.

     On appeal, we affirmed, but modified, the ruling in the Law

Division.      We observed that

             plaintiff   must  first  seek   recourse   by
             administrative appeal to the SHBC.       Both
             sound principles of administrative law and
             the relevant contract provisions require the

                                          16                                      A-1311-12T3
            plaintiff to seek administrative relief
            before attempting to sue for damages.    All
            available   and   appropriate administrative
            remedies generally should be fully explored
            "before judicial action is sanctioned."
            Abbott v. Burke, 100 N.J. 269, 296 (1985).
            The "exhaustion" principle ensures that
            claims will be heard as a preliminary matter
            by a body with expertise, a factual record
            may be created for appellate review, and
            there is a chance that the agency decision
            may satisfy the parties and keep them out of
            court.    Atlantic City v. Laezza, 80 N.J.
            255, 265 (1979).

            [Id. at 498.]

We transferred the matter to the SHBC for a hearing on the

merits of plaintiff's claim under the Program, and added that

"[o]ur action, is of course, without prejudice to any claim

plaintiff may wish to assert administratively or at law against

either Prudential or the SHBC."          Id. at 500.

    Here, by contrast, plaintiff has explicitly stated that his

complaint   is   brought     to   recover    "unpaid   benefits"    under      the

Program.     Accordingly, to recover, plaintiff must necessarily

secure a reversal of the SHBC final agency action upholding the

denial of those same benefits.               Plaintiff cannot      avoid this

obvious    conclusion   by    cloaking      his   claims   under   the    mantle

of contract and tort.

    The New Jersey Constitution of 1947 provides that "persons

aggrieved by action or inaction of state or local administrative

agencies could seek review . . . in the Superior Court '. . . on

                                      17                                 A-1311-12T3
terms and in the manner provided by rules of the Supreme Court

. . . .'"    Pascucci v. Vagott, 71 N.J. 40, 51-52 (1971) (quoting

N.J. Const. art. VI, § 5, ¶ 4).                  Pursuant to that authority, the

Court adopted Rules 2:2-3 and 2:2-4, with the intention that

"every proceeding to review the action or inaction of a state

administrative      agency     would       be     by    appeal               to    the   Appellate

Division."        Cent. R.R. Co. v. Neeld, 26 N.J. 172, 185, cert.

denied, 357 U.S. 928, 78 S. Ct. 1373, 2 L. Ed. 2d 1371 (1958).

Specifically, Rule 2:2-3 states that "appeals may be taken to

the   Appellate     Division    as     of       right       .       .    .    to    review    final

decisions    or    actions    of     any    state           administrative               agency   or

officer."    R. 2:2-3(a)(2).          So too, "the Appellate Division may

grant leave to appeal, in the interest of justice, . . . from an

interlocutory      decision     or    action           of       a       state      administrative

agency or officer, if the final judgment, decision or action

thereof is appealable as of right pursuant to R. 2:2-3(a) . . . ."

R. 2:2-4.

      To be sure, "some actions or inactions of State agencies

and officers do not constitute 'administrative' agency action or

inaction that is subject to review by the Appellate Division

under Rule 2:2-3(a)(2)."           D.J. Miller & Assocs., Inc. v. State,

Dep't of Treasury, 356 N.J. Super. 187, 191 (App. Div. 2002).

One obvious example is tortious conduct that subjects a State

                                            18                                             A-1311-12T3
agency or officer to liability under the Tort Claims Act (TCA),

N.J.S.A. 59:1-1 to 12-3.                    Ibid.       Another example is an action

for   breach         of    contract       under     the       Contractual        Liability       Act

(CLA), N.J.S.A. 59:13-1 to -10, "which does not constitute State

administrative            agency        action   within       the    intent      of    Rule   2:2-

3(a)(2) and thus jurisdiction over such a claim resides in the

appropriate          trial    court       rather       than    the   Appellate         Division."

Id. at 192.

      In    a     thinly          disguised      effort        to    fit    within      the    Law

Division's jurisdiction and divest this court of ours, plaintiff

framed his claims as those alleging breach of contract, breach

of fiduciary duty, consumer fraud under the CFA, and                                       unjust

enrichment.           Ordinarily,           if   properly        pled      and   substantively

based, these claims might be sufficient to vest the Law Division

with jurisdiction.                 However, our "exclusive jurisdiction does

not turn on the theory of the challenging party's claim or the

nature of the relief sought."                     Mutschler v. N.J. Dep't of Envtl.

Prot., 337 N.J. Super. 1, 8 (App. Div.) (citing Neeld, supra, 26

N.J. at 184-85), certif. denied, 168 N.J. 292 (2001)).                                        Here,

stripped        to        their     barest       essentials,         plaintiff's          claims,

sounding     in       tort        and    contract,       amount      to    no    more     than    a

collateral challenge to the November 14, 2011 SHBC final agency

action     upholding         the        limitation      of     coverage     for       plaintiff's

                                                  19                                     A-1311-12T3
health benefit claims.          Indeed, absent an attack on that final

agency action, plaintiff's tort and contract claims are patently

without basis in fact or law.

    As we stated in Mutschler:

            The Appellate Division has been vested with
            exclusive jurisdiction to review any action
            or   inaction   of  a  state   administrative
            agency. Pascucci v. Vagott, 71 N.J. 40, 51-
            54 (1976); Equitable Life Mortgage & Realty
            Investors v. New Jersey Div. of Taxation,
            151 N.J. Super. 232, 237-38, (App. Div.),
            certif. denied, 75 N.J. 535 (1977).       The
            Appellate Division's exclusive jurisdiction
            does   not   turn  on  the   theory   of  the
            challenging party's claim or the nature of
            the relief sought.     Central R.R. Co. v.
            Neeld, 26 N.J. 172, 184-85, cert. denied,
            357 U.S. 928, 78 S. Ct. 1373, 2 L. Ed. 2d
            1371 (1958).    Thus, this court's exclusive
            jurisdiction extends to claims of state
            agency inaction, Hospital Ctr. at Orange v.
            Guhl, 331 N.J. Super. 322, 329-30 (App. Div.
            2000), and to claims that are essentially
            declaratory in nature.        Equitable Life
            Mortgage & Realty Investors v. New Jersey
            Div. of Taxation, supra, 151 N.J. Super. at
            238. It also extends to claims that are
            joined with claims within the jurisdiction
            of another court or division of this court.
            Pascucci v. Vagott, supra, 71 N.J. at 52-54.

            [Mutschler, supra, 337 N.J. Super. at 9].

Plaintiff's arguments which seek to avoid the application of

this well-recognized principle are unpersuasive.

    In   our   view,   neither      Rinaldo     nor    Burley   stand   for   the

proposition    that,   in       circumstances      like     those   before    us,

plaintiff   may   pursue    a    private   cause      of   action   against   the

                                      20                                A-1311-12T3
SHBC's claims administrators that is necessarily dependent upon

the merits of his challenge to the SHBC's final agency action

rejecting his claim for health care coverage.              Notwithstanding

plaintiff's     energetic   arguments   to   the   contrary,   plaintiff's

complaint in the Law Division is squarely predicated upon the

contention that defendants "wrongfully den[ied]" coverage for

the health care claims advanced, and plaintiff in his complaint

explicitly averred that "[t]his is an action for unpaid benefits

and injunctive relief."1

     In Rinaldo, for example, we explained that plaintiffs were

entitled   to   pursue   their   claims   against    the   holder   of    the

wetlands permit and its contractors because the issuance of the

1
  We observe that plaintiff's complaint may be subject to other
procedural and substantive infirmities.   For example, plaintiff
asserts that defendants "breached their contract" with him, yet
it is clear that defendants were merely contractually bound to
the SHBC - not to plaintiff.          Further, while the CFA
"encompass[es] the sale of insurance policies as goods and
services that are marketed to consumers," "the payment of
insurance benefits is not subject to the CFA."      Lemelledo v.
Benefit Mgmt. Corp., 150 N.J. 255, 265 (1997) (citing Nikiper v.
Motor Club of Am., 232 N.J. Super. 393, 401 (App. Div.), certif.
denied, 117 N.J. 139 (1989)); Pierzga v. Ohio Cas. Grp. of Ins.
Cos., 208 N.J. Super. 40, 47 (App. Div.), certif. denied, 104
N.J. 399 (1986); see also In re Van Holt, 163 F.3d 161, 168 (3d
Cir. 1998)("The mere denial of insurance benefits to which
. . . plaintiffs believe[] they [are] entitled does not comprise
an unconscionable commercial practice."). Also, it is apparent
that plaintiff failed to allege a claim of breach of duty of
good faith with the required specificity.      See R. 4:5-8(a).
However, because such issues were not presented to the motion
court, we do not address them here. Nieder v. Royal Indem. Ins.
Co., 62 N.J. 229, 234-35 (1973).

                                   21                               A-1311-12T3
wetlands permit did not insulate the permittee from liability

for damaging its neighbor's property in undertaking its work.

Rinaldo, supra, 387 N.J. Super. at 400.                                     Here, by contrast,

plaintiff's      claim      is    that          he    was     damaged       by    the    denial     of

benefits     –   a     claim     fully          adjudicated           on    the    administrative

level,    and    for      which       plaintiff            has    abandoned        his    right    to

appellate review.

       Plaintiff's focus at oral argument upon the errant claim of

Magellan's physician advisor that a Caron physician had agreed

that the son needed only outpatient treatment is unavailing.

That    claim    was      addressed         and       corrected        at    the       second    level

appeal by Horizon's Member Appeals Subcommittee, and plaintiff's

coverage was extended to March 4 – after the date of the alleged

telephone conversation with the Caron doctor.                                      Plaintiff thus

challenged       that      claim           on        the     administrative             level,     and

succeeded.

       Our   conclusion          in    Burley,             that   a   plaintiff         must     first

pursue an administrative appeal from a denial of coverage under

the program, before pursuing an action at law, and that the

dismissal of a premature suit must be "without prejudice" to a

later    action      at    law        is    not       authority        for       the    proposition

plaintiff advances here.                   Burley, supra, 251 N.J. Super. at 500.

As noted, plaintiff's claims in the Law Division are dependent

                                                     22                                     A-1311-12T3
upon the resolution of an issue contrary to the final agency

action     of     the   SHBC     -    an   issue   fully   adjudicated       on    the

administrative appeal before the SHBC - as to which plaintiff

has abandoned his appeal.              Accordingly, plaintiff's complaint in

the Law Division must be dismissed for lack of jurisdiction.                        To

hold otherwise would permit plaintiff to collaterally attack a

State administrative determination in the Law Division.                      The Law

Division is without jurisdiction to adjudicate such claims.                          R.

2:2-3(a).2

     The        remainder   of       plaintiff's     arguments   on     appeal     are

without    sufficient       merit     to   warrant    discussion   in    a   written

opinion.     R. 2:11-3(e)(1)(E).

     Affirmed.

2
  Cf. R. 2:5-5(b)(authorizing the Appellate Division, but only in
"exceptional instances," to order the record on appeal of a
state agency decision to be supplemented by a specially-
designated trial court judge).

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