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Reversing a trial court's decision to vacate an arbitration award, a New Jersey appellate court held that a party waives its right to object to the untimely issuance of an award if not done before the arbitrator issues the award.
In Novak v. Liberty Mutual Insurance Co., 2007 WL 4179106 (N.J. Super. Ct. App. Div. Nov. 28, 2007), Novak suffered injury in a car accident on March 11, 2002, and submitted requests for Personal Injury Protection (PIP) benefits totaling $249,707.45. Liberty argued that medical treatment was unnecessary or not casually related to Novak's accident. Novak filed an arbitration claim with the American Arbitration Association (AAA).
The arbitrator awarded Novak $1,475 plus attorney fees and costs. Novak challenged the award in court, asserting the award was invalid because it violated the applicable arbitration rules, which require an arbitrator to issue an award within 45 days of the hearing. Liberty opposed the motion, arguing Novak had not objected to the untimely receipt of the award before issuance. The trial judge vacated the award because the arbitrator had lost jurisdiction to render a decision by failing to follow the 45-day rule. Liberty appealed.
Reversing the trial court, the Court held that Novak had waived her right to challenge the untimely receipt of the award because she failed to do so before the arbitrator issued the award. New Jersey Statute 2A:23A-12(b) states, "a party waives its right to object that an award was not made within the time required unless the party notifies the umpire of the party's objection prior to the delivery of the award." Because Novak did not object to the untimely issuance of the award before the arbitrator issued the award, she waived her right to do so.
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