Court Opinion

ID: 9899213
Source: CourtListenerOpinion
Date Created: 2023-11-16 15:08:27.110874+00
Date Added: 2024-06-11T09:19:57.630852
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-0978-21

HUDSON REGIONAL
HOSPITAL, on assignment
of GJS, RW, JL, LD, and YV,

          Plaintiff-Appellant,

v.

NEW HAMPSHIRE INSURANCE
COMPANY, a subsidiary of the
CHARTIS GROUP, owned by
AMERICAN INTERNATIONAL
GROUP, INC. (AIG),

     Defendant-Respondent.
______________________________

                   Argued December 7, 2022 – Decided November 16, 2023

                   Before Judges Gooden Brown and DeAlmeida.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Hudson County, Docket No. L-2936-21.

                   Christa Michele Spinelli argued the cause for appellant
                   (Callagy Law, PC, attorneys; Christa Michele Spinelli,
                   on the briefs).
            Matthew E. Selmasska argued the cause for respondent
            (Goldberg Segalla LLP, attorneys; John Michael
            McConnell, Paul Steven Danner and Matthew E.
            Selmasska, on the brief).

      The opinion of the court was delivered by

DeALMEIDA, J.A.D.

      Plaintiff Hudson Regional Hospital (Hudson Regional) appeals from the

November 5, 2021 order of the Law Division dismissing its complaint against

defendant New Hampshire Insurance Company (NHIC) with prejudice for lack

of subject matter jurisdiction and failure to state a claim upon which relief can

be granted. We affirm.

                                       I.

      Hudson Regional operates a hospital in Secaucus. Its staff provided

medical treatment to five New York residents, identified in the record only as

G.J.S., R.W., J.L., L.D., and Y.V., for injuries they suffered while working in

New York for their New York employers. The patients have no connection to

New Jersey other than having received medical treatment in Secaucus for their

work-related injuries.

      Hudson Regional obtained an assignment of workers' compensation

benefits from each of the patients. The hospital sought compensation for the

medical treatment it provided to its patients before the New York Workers'

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                                       2
Compensation Board (NYWCB).          In each instance, the NYWCB awarded

compensation in accordance with the New York Workers' Compensation Act

Fee Schedule, N.Y. COMP. CODES R. & REGS. tit. 12 § 329-1.3, established

pursuant to the New York Workers' Compensation Law, N.Y. WORKERS' COMP.

LAW (McKinney 2023). In each instance, the amount awarded was less than

what Hudson Regional had billed for its treatment. Under Section 13 of the New

York Worker's Compensation Law, the medical provider is obligated to write

off the unpaid balance of what it billed after receipt of the award under the fee

schedule. N.Y. WORKERS ' COMP. LAW § 13 (McKinney 2023).

      New York law provides a mechanism for disputing medical treatment

reimbursements awarded by the NYWCB. See N.Y. COMP. CODES R. & REGS.

tit. 12 §§ 325-6.1 and 328, et seq. Available avenues of review include both an

adjudication at NYWCB and arbitration. Hudson Regional did not dispute the

compensation awarded by NYWCB for the treatment of the five patients.

      Instead, Hudson Regional filed claims with the New Jersey Division of

Workers' Compensation (Division), alleging it was entitled to compensation for

its medical treatment of the five patients at the rate provided by the New Jersey

Workers' Compensation Act (WCA), which does not limit reimbursement for

medical treatment to a fee schedule. See N.J.S.A. 34:15-15 (providing that

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payment for physician, surgeon, and hospital services "shall be reasonable and

based upon the usual fees and charges which prevail in the same community for

similar physicians', surgeons' and hospital services."). Hudson Regional sought

the difference between what was awarded by NYWCB and what it would be

entitled to under the WCA. NHIC, the workers' compensation insurance carrier

for the employers of the patients, appeared on behalf of the employers.

      A judge of compensation issued orders dismissing three of Hudson

Regional's claims for want of jurisdiction.      In written opinions, the judge

concluded that N.J.S.A. 34:15-15, which provides that "[e]xclusive jurisdiction

for any disputed medical charge arising from any claim for compensation for a

work-related injury or illness shall be vested in the division[,]" does not vest in

the Division jurisdiction over a claim for benefits by a New York employee of

a New York employer injured in New York, merely because the employee

received medical treatment at a New Jersey hospital.

      The judge noted that our Supreme Court recognized six possible bases to

assert jurisdiction in New Jersey for a workers' compensation claim: (1) place

where the injury occurred; (2) place of making the contract of employment; (3)

place where the employment relationship exists or is carried out; (4) place where

the industry is located; (5) place where the employee resides; and (6) place

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whose statute the parties expressly adopt by contract. See Williams v. Port Auth.

of N.Y. and N.J., 175 N.J. 82, 87-88 (2003). Finding that the only connection

to New Jersey was that the patients were treated in Secaucus, the judge

determined the Division lacked jurisdiction over Hudson Regional's claims.

      Hudson Regional's other claims were dismissed by judges                   of

compensation on the same basis. Hudson Regional, however, did not appeal the

decisions dismissing their claims to this court. See R. 2:2-3(a)(2) (allowing for

appeals to this court from final decisions of State administrative agencies).

      Instead, Hudson Regional filed a complaint in the Law Division against

NHIC, alleging the patients it treated, whose rights it was assigned, are third-

party beneficiaries under the insurance policies NHIC issued to their employers

and are, as a result, entitled to workers' compensation benefits at the rate

authorized by the WCA for medical treatment they received in New Jersey.

Hudson Regional alleged that because NHIC provided benefits only at the

amounts awarded by NYWCB pursuant to the New York fee schedule, and not

the amounts permitted under the WCA, NHIC: (1) breached the contractual

rights of the five patients; (2) was unjustly enriched; (3) engaged in bad faith

and unfair claim settlement practices; and (4) breached the implied covenant of

good faith and fair dealing in its policies.

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                                         5
      Hudson Regional sought an award of $386,961.32, what it alleged was the

difference between what NHIC paid for the medical treatment it provided to the

patients and what it would have received under the WCA. In support of its

jurisdictional allegations, Hudson Regional alleged that NHIC and the

employers conduct business in New Jersey.

      NHIC moved to dismiss the complaint pursuant to Rule 4:6-2(a) for lack

of subject matter jurisdiction, and Rule 4:6-2 (e) for failure to state a claim upon

which relief can be granted.

      On November 5, 2021, the trial court entered an order granting NHIC's

motion and dismissing the complaint with prejudice. In an oral opinion, the trial

court concluded that pursuant to N.J.S.A. 34:15-15, the Division has exclusive

jurisdiction over claims for reimbursement for medical treatment arising from

work-related injuries and a challenge to a decision by the Division to not award

such benefits must be through an appeal to this court. See R. 2:2-3(a)(2). The

trial court concluded that Hudson Regional could not recharacterize its patients'

claims for workers' compensation benefits as allegations of breach of contract

in an action in the Superior Court in lieu of appealing the Division's decisions.

      This appeal follows. Hudson Regional argues that the Law Division has

jurisdiction to hear its patients' contract claims against NHIC.

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                                        II.

      We review the trial court's jurisdictional decision de novo. Beaver v.

Magellan Health Srvs., Inc., 433 N.J. Super. 430, 437 (App. Div. 2013). The

focus of our inquiry is "whether plaintiff can assert [its] causes of action in the

Law Division under the circumstances presented." Id. at 437-38.

      We apply a de novo standard of review to trial court's order dismissing a

complaint under Rule 4:6-2(e). See Stop & Shop Supermarkets Co. v. Cty. of

Bergen, 450 N.J. Super. 286, 290 (App. Div. 2017) (quoting Teamsters Loc. 97

v. State, 434 N.J. Super. 393, 413 (App. Div. 2014)). Under the rule, we owe

no deference to the motion judge's conclusions. Rezem Fam. Assocs., LP v.

Borough of Millstone, 423 N.J. Super. 103, 114 (App. Div. 2011). "[O]ur

inquiry is limited to examining the legal sufficiency of the facts alleged on the

face of the complaint." Printing Mart-Morristown v. Sharp Elecs. Corp., 116

N.J. 739, 746 (1989). "A pleading should be dismissed if it states no basis for

relief and discovery would not provide one." Rezem Fam. Assocs., 423 N.J.

Super. at 113.

      We have carefully considered the record and are not persuaded by Hudson

Regional's arguments that the trial court erred when it dismissed its complaint.

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      The Legislature has unequivocally vested "[e]xclusive jurisdiction" in the

Division "for any disputed medical charge arising from any claim for

compensation for a work-related injury or illness . . . ." N.J.S.A. 34:15-15.

Hudson Regional pursued claims for workers' compensation benefits in the

Division on behalf of its patients. The Division concluded that it did not have

jurisdiction over the claims of New York employees of New York employers

who were injured at work in New York. The Division rejected the argument

that the employees' election to receive medical treatment at a New Jersey

hospital was sufficient to vest jurisdiction in the Division to adjudicate a claim

for benefits under the WCA. Hudson Regional did not appeal the Division's

decision.

      It elected instead to file a breach of contract action against NHIC on behalf

of its patients in the Superior Court. It cannot, however, transmogrify the

employees workers' compensation claims into breach of contract claims . The

WCA compensates employees for personal injuries caused "by accident arising

out of and in the course of employment . . . ." N.J.S.A. 34:15-7. The WCA

authorizes benefits "irrespective of the fault of the employer or contributory

negligence and assumption of risk of the employee." Harris v. Branin Transp.,

Inc., 312 N.J. Super. 38, 46 (App. Div. 1998). In addition, recovery under the

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                                        8
statute is "the exclusive remedy for an employee who sustains an injury in an

accident that arises out of and in the course of employment." McDaniel v. Lee,

419 N.J. Super. 482, 490 (App. Div. 2011) (quoting Ahammed v. Logandro, 394

N.J. Super. 179, 190 (App. Div. 2007)).

      The WCA "accomplished a 'historic trade-off whereby employees

relinquished their right to pursue common-law remedies in exchange for

automatic entitlement to certain, but reduced, benefits whenever they suffered

injuries by accident arising out of and in the course of employment.'" Van Dunk

v. Reckson Assocs. Realty Corp., 210 N.J. 449, 458-59 (2012) (quoting Millison

v. E.I. du Pont de Nemours & Co., 101 N.J. 161, 174 (1985)).

      An employee who receives an unfavorable decision from the Division

cannot circumvent the comprehensive statutory structure enacted by the

Legislature to address work-related claims by filing a suit alleging breach of

contract in the Superior Court against their employers' workers' compensation

carrier seeking workers' compensation benefits denied by the Division. Hudson

Regional's available avenue of review of the Division's decision was to file an

appeal on behalf of its patients in this court. 1

1
 We offer no view on whether any such appeal would have been successful.
We note, as well, that claims were filed on the patients' behalf before the

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                                          9
      Hudson Regional correctly notes that a New Jersey medical provider may

file an action in the Superior Court to recover fees for medical services it

provided to an out-of-State patient for a work-related injury, even if that patient

received workers' compensation benefits in their home State. See D'Ascoli v.

Stieh, 326 N.J. Super. 499 (App. Div. 1999). In that case, a Pennsylvania

resident, employed by a Pennsylvania employer, was injured while working in

Pennsylvania. Id. at 500. She received medical treatment from D'Ascoli, a

surgeon, in New Jersey and signed an agreement to pay the fees for the services

she received, irrespective of insurance coverage. Id. at 501. D'Ascoli received

payment for a portion of his fees from the Pennsylvania workers' compensation

insurance carrier for the patient's employer. Ibid. D'Ascoli thereafter filed a

complaint in the Superior Court against the patient to collect the outstanding

balance of the charges for his services. Ibid.

      "There [was] no question that [the patient's] workers' compensation claim

[was] governed by Pennsylvania's workers' compensation law." Id. at 500.

            There is also no question that a component of
            Pennsylvania's workers' compensation law is 77 Pa.

NYWCB, which awarded benefits to them for the services provided by Hudson
Regional. No appeal was taken in New York from the decision of the NYWCB.
There was, therefore, more than one path through which Hudson Regional could
have challenged what it viewed to be unfavorable decisions of adjudicative
bodies with respect to its patient's claims for benefits for medical treatment.
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                                       10
              Stat. § 531 (7), which bars a medical provider from
              seeking to hold the employee liable for all or any
              portion of the medical costs incurred in treating a
              compensable injury, the provider's exclusive payment
              remedy being against the insurer.

              [Ibid.]

      The patient moved for summary judgment, arguing that the protection

provided by Pennsylvania's workers' compensation law from having to pay the

outstanding balance of her medical treatment costs immunized her from

D'Ascoli's suit in a New Jersey court. Id. at 501. The trial court denied the

motion and the matter proceeded to entry of judgment in favor of the surgeon.

Id. at 500.

      On appeal, the patient raised the same argument rejected by the trial court.

We affirmed. As we explained,

              [a] New Jersey licensed physician who renders medical
              services in this State should be able to rely on the
              contract laws of this State in seeking payment. It is also
              arguable that by deciding to have her treatment outside
              of Pennsylvania, defendant waived the benefit of this
              aspect of the Pennsylvania workers' compensation law.
              We are satisfied that the reasonable expectations of
              both parties in respect of the rendering of medical
              treatment here were or should have been consistent with
              defendant's agreement to pay for the medical services
              rendered by plaintiff.

              [Id. at 504.]

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                                         11
      This precedent is of no assistance to Hudson Regional here. Although the

facts underlying the present matter are substantively similar to those before the

court in D'Ascoli, a crucial distinction renders the holding in that case

inapplicable to Hudson Regional's claims. Hudson Regional is not suing the

five patients it treated for the outstanding portion of the hospital's charges for

the medical services it rendered to them. Under D'Ascoli, such a suit might well

be viable in a New Jersey court.          Instead, Hudson Regional, having been

assigned the claims of its patients, is suing NHIC for workers' compensation

benefits it alleges the insurance carrier is obligated to pay the patients because

they received medical treatment in New Jersey. The claims raised in Hudson

Regional's Superior Court complaint are nothing more than a thinly veiled

attempt to recast the patients' claims for workers' compensation benefits as

breach of contract claims. Such claims may be raised only in the Division

pursuant to its exclusive jurisdiction.

      Affirmed.

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