STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY VS. STOKES PHARMACY(L-0097-14, BURLINGTON COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-5102-14T2
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Plaintiff-Respondent/
Cross-Appellant,
v.
STOKES PHARMACY,
Defendant-Appellant/
Cross-Respondent.
______________________________________________
Argued January 24, 2017 – Decided October 13, 2017
Before Judges Messano and Guadagno.
On appeal from the Superior Court of New
Jersey, Law Division, Burlington County,
Docket No. L-0097-14.
Michael Confusione argued the cause for
appellant/cross-respondent (Hegge &
Confusione, LLC, attorneys; Mr. Confusione,
of counsel and on the briefs).
Ann Dee Lieberman argued the cause for
respondent/cross-appellant (Newman &
Andriuzzi, attorneys; Ms. Lieberman and
Suzanne E. Mayer, on the briefs).
PER CURIAM
On December 18, 1990, Joseph Brian Quick sustained serious
injuries when he was struck by a car while riding his bicycle.
State Farm Mutual Automobile Insurance Company provided
automobile insurance to Joseph under a policy issued to his
father, Robert C. Quick.
Defendant Stokes Pharmacy provided medical services
including medication and durable medical equipment to Joseph
which were billed to and paid for by State Farm. In November
2012, State Farm claimed it overpaid Stokes $165,465.20, for
services billed between April 5, 2012, and July 31, 2012. State
Farm demanded reimbursement but Stokes refused.
State Farm filed a complaint in the Law Division seeking
reimbursement. After a three-day bench trial, the trial judge
entered an order awarding State Farm $134,934.62. Stokes now
appeals, claiming it was denied a trial by jury; the evidence
failed to demonstrate State Farm's right to recovery; State
Farm's right to recovery was foreclosed by N.J.S.A. 26:2J-8.1
and N.J.S.A. 39:6A-9.1; and the trial judge erred in admitting
certain testimony and evidence. State Farm cross-appeals and
maintains the judge erred in not awarding the full amount
sought, $165,465.20.
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Stokes first claims that it was denied the right to a trial
by jury. Without actually conceding that it never made a demand
for a jury trial, Stokes attempts to piggyback on the demand for
a jury trial made by State Farm in its complaint. We find this
argument not only lacks merit but is somewhat disingenuous.
Rule 4:35-1(a) provides in pertinent part,
any party may demand a trial by jury of any
issue triable of right by a jury by serving
upon the other parties a demand therefor in
writing not later than 10 days after the
service of the last pleading directed to such
issue. Such demand may be appended to the
party's pleading.
Failure of a party to serve a demand for trial by jury
constitutes a waiver. R. 4:35-1(c).
Stokes relies on 500 Columbia Turnpike Associates v.
Haselmann, 275 N.J. Super. 166 (1994), in arguing that once a
jury trial demand has been made by one party the consent of all
parties is required before it can be dispensed with. We find
Columbia Turnpike distinguishable and Stokes' reliance on it
misplaced.
In Columbia Turnpike, the plaintiff instituted litigation
against three defendants alleging tortious interference and
breach of a commercial lease. Id. at 169. One of the
defendants, Feist & Feist, requested a trial by jury. After a
jury was empaneled, counsel for another defendant, Haselmann,
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requested a bench trial on the claims against his client and
that a jury trial be conducted as to Feist & Feist. Ibid. When
the judge ruled that all issues would be tried before a jury,
counsel for Feist & Feist waived trial by jury for his client.
Ibid. The plaintiff's counsel objected, arguing that Rule 4:35-
1(d) required the consent of all parties to a waiver once a
party has requested a trial by jury. The judge ruled that
because plaintiff had not requested a jury trial, it had no
right to demand a jury its waiver was not required under the
rule. Ibid.
We reversed, noting that once a party requests a jury trial
the Rule requires all parties to consent by trial by the court
and "once Feist & Feist demanded a jury trial on all the issues,
trial by jury could be dispensed with only by consent of all the
parties or their counsel." Id. at 170.
While it is clear that State Farm demanded a jury trial in
its complaint, it is equally clear that Stokes made no request
for a jury trial in either its initial or in an amended answer.
In the limited record before us, there is no indication it ever
made such a demand before the trial judge or objected to a bench
trial.
In a Rule 104 hearing held on March 31, 2015, the trial
judge indicated that he has "engaged in some conferencing with
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counsel not for the purpose of settlement, but for the purpose
of . . . exploring presentation and seeing what the issues
happen to be." We were not provided with transcripts of those
conferences, but it is apparent that by the time of the March
31, 2015 hearing, the parties were anticipating a bench trial.1
This is evident from a statement made that day by the trial
judge after he denied State Farm's request to adjourn the trial
date: "it is a non-jury trial, and I will see that justice is
done." Certainly, if Stokes was under the impression that the
case would be tried to a jury, or had any objection to a bench
trial, its counsel had the opportunity to raise the issue with
the trial judge at that time and failed to do so. Stokes has
not provided any proof that it ever requested a trial by jury or
objected the bench trial.
In State Farm's brief, it alleges that during a pretrial
conference2 before the trial judge, "both parties agreed that the
matter should proceed as a bench trial not a trial by jury." No
transcript of this conference has been provided, but if this
1
Later in the transcript, the attorney for Stokes stated that he
had spoken earlier with the judge in chambers "regarding how the
trial will be handled by [the attorney] and [his co-counsel]."
2
Court records indicate that, before trial began on April 28,
2015, there were motion hearings scheduled on July 25, 2014,
October 10, 2014, October 24, 2014, March 31, 2015, and March
30, 2015.
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occurred, there was an oral waiver of the right to trial by jury
which is permissible by Rule 4:35-1(d). If there was a jury
trial waiver, it is troubling that appellate counsel, who does
not deny State Farm's claim of such a waiver, argues before us
that Stokes was entitled to a jury trial. We acknowledge that
appellate counsel did not represent Stokes at trial and no
transcripts of pretrial conferences have been produced.
Nevertheless we caution counsel that misrepresentation, "even
when carried out in the name of zealous representation," is not
permissible. In re Seelig, 180 N.J. 234, 250 (2004).
Because State Farm's claim that both parties waived the
right to trial by jury is not contested by Stokes and there is
ample support in the record indicating Stokes consented to a
bench trial, we reject the argument that Stokes was denied the
right to trial by jury.
Stokes next claims State Farm's complaint failed to specify
the cause of action under which it sought recovery from Stokes.
In its complaint, State Farm alleged:
For dates of service from April 5, 2012
through July 12, 2012, agents, servants and
employees of Defendant Stokes Pharmacy,
provided medical services in the form of
medication to Joseph Brian Quick. These
services were erroneously and/or over-billed
and/or duplicatively billed to State Farm
Mutual Automobile Insurance Company. As a
result of these erroneously billed and/or
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over-billed and/or duplicatively billed dates
of service, State Farm Mutual Automobile
Insurance Company thereafter over paid Stokes
Pharmacy, the sum of $165,492.94 for these
services.
In its answer, Stokes denied the allegations, but failed to
raise any defenses. During the March 31, 2015 hearing, the
judge permitted Stokes to amend its answer to raise the defense
of accord and satisfaction. Stokes now argues that the judge
failed to apply the legal requirements for unjust enrichment to
State Farm's claim. State Farm did not seek restitution for a
payment made under a mistake of fact, but sought to recoup
overpayments as a result of Stokes' overbilling. Stokes only
sought to include accord and satisfaction in its amended answer
and did not raise the issue of unjust enrichment before the
trial judge.
It is well-settled that we will not consider questions or
issues not properly presented to the trial court when an
opportunity for such a presentation is available unless the
questions so raised on appeal go to the jurisdiction of the
trial court or concern matters of great public interest. Nieder
v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). We decline
to consider the issue now.
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Stokes also claims the trial judge's finding that more than
$130,000 in overpayments were made to Stokes is not supported by
adequate, substantial and credible evidence. We disagree.
State Farm called Diane Zazzaro at the Rule 104 hearing and
as a witness at trial. Zazzaro identified each claim submitted
by Stokes and the corresponding payments made by State Farm.
There were no objections to any of these exhibits by Stokes.
While Stokes attempted to prove through its co-owner/manager,
Michael Tursi, that the payments received from State Farm on
behalf of James Quick were applied to outstanding balances,
Tursi was unable to provide any documents to support his claim
or to rebut State Farm's proofs of overpayment. The evidence
introduced by State Farm provided compelling support for the
judge's conclusions.
Stokes next argues that State Farm's right to sue Stokes
for overpayments is foreclosed by the Health Claims
Authorization, Processing and Payment Act (HCAPPA), N.J.S.A.
26:2J-1 to -47 and the New Jersey Automobile Reparation Reform
Act (No Fault Law), N.J.S.A. 39:6A-1 to -35. Again, we
disagree.
HCAPPA provides certain adjudicative or administrative
procedures by which health maintenance organizations should
resolve claims for unpaid or improperly paid claims. Stokes now
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argues HCAPPA requires a carrier to file a claim for overpayment
within eighteen months of payment. That section, N.J.S.A.
26:2J-8.1(d)(12), provides in pertinent part:
No health care provider shall seek
reimbursement from a payer or covered person
for underpayment of a claim submitted pursuant
to this section later than 18 months from the
date the first payment on the claim was made,
except if the claim is the subject of an appeal
submitted pursuant to subsection e. of this
section or the claim is subject to continual
claims submission.
Stokes claims State Farm's complaint was filed more than
eighteen months after the "prescription period" and a remand is
required to determine if these were payments of PIP benefits or
health insurance benefits subject to HCAPPA.
State Farm maintains that it has paid and continues to pay
PIP benefits to Brian Quick, which are not subject to the
restrictions contained in N.J.S.A. 26:2J-8.1(d)(12) and N.J.S.A.
17B:27-44.2. Stokes suggests that the payments to Quick may not
be PIP benefits but provides no proof to support this claim.
Rather, Stokes, who did not raise this issue before the trial
judge, now seeks a remand for that determination to be made. As
there is no indication in the record that these payments were
anything other than PIP benefits, we find no merit to Stokes'
argument and see no need for a remand.
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Stokes next argues for the first time on appeal, that
nothing in N.J.S.A. 39:6A-9.1, permits State Farm to sue a
"health provider like Stokes." State Farm did not rely on this
statute in seeking recovery from Stokes and Stokes failed to
raise this argument before the trial judge. We see no relevance
of N.J.S.A. 39:6A-9.1, which addresses the ability of an insurer
paying PIP benefits to recover from insured and uninsured
tortfeasors, to the action brought by State Farm and no merit to
Stokes' argument. R. 2:11-3(e)(1)(E).
Finally, Stokes challenges evidentiary rulings made by the
trial judge permitting State Farm to call a witness, Carla
Salmonson, who was not identified during discovery, and
admitting a spread sheet prepared by Salmonson under the
supervision of State Farm's counsel.
Just before trial began, State Farm moved to bar any
testimony regarding outstanding balances claimed by Stokes
because no affirmative defense was ever raised in its answer.
Counsel for Stokes explained its proposed defense:
Your Honor my client's position in this matter
is basically they got the monies from State
Farm, applied it to the open accounts
receivable, and at this point in time there's
no other monies due to State Farm.
The judge then permitted Stokes to amend its complaint to
allege "full accord and satisfaction" and denied a request by
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counsel for State Farm to adjourn the trial. During the Rule
104 hearing prior to trial, Tursi testified that during 2012,
State Farm provided "partial payments" to Stokes and subsequent
payments received from State Farm were applied to outstanding
balances. Tursi relied in part on a spread sheet listing
$434,833.08 in payments made by State Farm to Stokes from
November 7, 2011 to September 28, 2012, well beyond the time
frame of claimed overpayments alleged in State Farm's complaint.
State Farm objected to the introduction of the spread sheet at
trial. The judge admitted the spread sheet in evidence but
adjourned the trial thirty days to permit State Farm to inspect
Stokes' computer and compare the items on the Stokes spread
sheet with State Farm's billing records for the expanded period.
When trial resumed3 on April 28, 2015, State Farm recalled
Tursi and Zazzaro. Zazzaro testified that, as a result of the
judge's March 31, 2015 decision, she requested that her claims
processor, Carla Salmonson, gather all invoices, explanation of
benefits (EOBs), and drafts on the Quick account for the
expanded period of November 7, 2011 through September 28, 2012.
These were then compared to the Stokes spread sheet and three
documents were created: the first contained items listed on
3
After the Rule 104 hearing, the judge converted the hearing and
accepted the testimony of Zazzaro and Tursi as trial testimony.
11 A-5102-14T2
Tursi's spread sheet but never billed to State Farm totaling
$130,069.47 (PA-1); a second exhibit listed all items actually
billed to State Farm, totaling $291,071.43 (PA-2); and a third
listed all payments made by State Farm to Stokes for the
expanded period on Tursi's spread sheet totaling $434,833.08
(PA-3).
These documents established that between November 7, 2011
and September 28, 2012, State Farm paid out $434,833.08 on the
account, but State Farm never received bills for $130,069.47.
When counsel for State Farm attempted to move the exhibits into
evidence, the judge sustained Stokes' objection, as Zazzaro did
not prepare them. The judge gave State Farm the opportunity to
call a witness to authenticate the documents and trial was
continued to June 2, 2015.
State Farm proposed calling Patricia Cox-Obeid and
Salmonson but Stokes objected to Salmonson as she was not named
in discovery and had not been deposed. The judge overruled the
objection and permitted counsel for Stokes to meet with
Salmonson before she testified.
Cox-Obeid testified she was the State Farm claim
representative assigned to the Quick account and, working with
Salmonson, gathered the EOBs, medical billings, and proofs of
payment from November 2011 through April 2012.
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Salmonson explained how she accessed the State Farm
electronic claim system, which contains a scanned copy of "every
single document that comes into the file," and printed out the
documents from the Quick account. Counsel for State Farm then
again moved to enter the three exhibits into evidence. Over
Stokes' objection they were admitted.
Stokes now argues that the judge erred in allowing
Salmonson to testify and in admitting the three exhibits. We
find these arguments lack sufficient merit to warrant further
discussion in our opinion beyond these brief comments. R. 2:11-
3(e)(1)(E).
We generally defer the rulings of our trial court judges as
to the admission or exclusion of proffered evidence and will not
disturb those rulings absent a clear abuse of discretion. Dinter
v. Sears, Roebuck & Co., 252 N.J. Super. 84, 92 (App. Div.
1991). State Farm compiled the three challenged exhibits and
was compelled to call Salmonson as a witness to authenticate
them, only after Stokes presented a spread sheet through Tursi
which exceeded the time frame of the claims made by State Farm
and was completely devoid of authentication. There was no way
for State Farm to anticipate the Tursi document and we see no
reason to disturb the judge's rulings here.
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State Farm's cross-appeal raises five points. We find all
five lack merit and address only the claim that the trial judge
erred in not awarding State Farm all of its claimed amount of
$165,465.20.
The trial judge based the award primarily on exhibit PA-1,
the list of items not billed to State Farm, which he referred to
as a "smoking gun" and his finding that Zazzaro, Cox-Obeid, and
Salmonson were credible witnesses. The judge awarded the amount
contained in this exhibit, $130,069.47.
Final determinations made by the trial court sitting in a
non-jury case are subject to a limited and well-established
scope of review: "we do not disturb the factual findings and
legal conclusions of the trial judge unless we are convinced
that they are so manifestly unsupported by or inconsistent with
the competent, relevant and reasonably credible evidence as to
offend the interests of justice." Seidman v. Clifton Sav. Bank,
S.L.A., 205 N.J. 150, 169 (2011) (internal quotations omitted).
Our task is to "ponder[] whether . . . there is substantial
evidence in support of the trial judge's findings and
conclusions." Ibid.
Informed by this standard of review, we find no reason to
disturb the trial judge's decision.
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Affirmed.
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