A New Jersey appellate court determined that a medical provider waived its right to appeal the lower court's vacatur of a of Personal Injury Protection (PIP) arbitration award because it agreed to arbitration under New Jersey's Alternative Procedure for Dispute Resolution Act (APDRA).

In New Jersey Manufacturers Ins. Co. v. University Physicians Associates, No. A-1491-06T1, 2008 WL 238518 (N.J. Super. Ct. App. Div. Jan. 30, 2008), New Jersey Manufacturers Insurance's (NJM) insured, Montagano, was injured in a car accident. Thereafter, Montagano was admitted to a hospital for emergency medical care from University Physicians Associates (UPA). UPA submitted its medical bills for Montagano's treatment to NJM for payment of PIP benefits.

NJM paid UPA the amount it considered customary and reasonable, which was less than the total amount UPA had billed. Pursuant to the APDRA, UPA issued a demand for arbitration to NJM to recover the difference.

NJM objected because UPA had not executed an assignment designating it as Montagano's assignee. The arbitrator was not persuaded by this argument, and awarded UPA unpaid medical costs, fees, and other costs. NJM filed a complaint seeking vacatur of the arbitration award.

The lower court vacated the arbitration award on the grounds that there was no privity of contract between UPA and NJM. On appeal, UPA argued that the lower court erred in holding that UPA lacked standing to make a claim for PIP benefits.

In response, NJM argued that, procedurally, the Court could not review the judgment on appeal because New Jersey law and the APDRA bar any appeal of an order from the lower court affirming, modifying, or vacating an arbitration award determining PIP benefits.

The Court determined that by seeking arbitration the parties waived the right to both a jury trial and an appeal. The Court noted that it had previously held that the right to appeal could be waived by voluntarily selecting APDRA dispute resolution.

All evidence in the record indicated that UPA voluntarily chose to enter arbitration in accordance with the Rules for No Fault Arbitration, which is governed by the APDRA. Thus, UPA waived its constitutional right to appeal the decision below. Further, UPA did not allege any circumstances grounded in public policy that would allow the Court to grant its limited appellate review.

UPA argued that under the APDRA, the Court retains its authority to correct the legal errors of lower courts. In rejecting this contention, the Court noted that the APDRA prevents evaluation of whether or not the lower court committed an erroneous and prejudicial application of the law to the facts. Thus, the Court determined it could not review the lower court's determination on the merits of the action and dismissed UPA's appeal.