INSURANCE LAW
23-2-5481 North Jersey Brain & Spine Center v. Hereford Insurance Company, App. Div. (per curiam) (16 pp.) In March 2011, a New Jersey resident suffered injuries while a passenger in a livery car insured under a New York automobile policy issued by defendant Hereford Insurance Co. The policy provided no-fault, personal injury protection (PIP) benefits up to a limit of $200,000. After she was admitted to Hackensack University Medical Center, spinal surgery was performed by doctors affiliated with plaintiff North Jersey Brain and Spine Center. On April 12, the patient assigned “all payments for medical services rendered” to plaintiff. Meanwhile, plaintiff submitted claims to Hereford for services rendered in the amount of $280,575. Hereford completed “final verification” of the claim on April 22. Hereford’s offer was $66,034.02. Plaintiff refused the recommended payment. On July 14, 2011, Hereford paid $150,000 to the hospital. On the same day, Hereford denied plaintiff’s entire claim because the policy limit of $200,000 under New York State No-Fault law had been exhausted. Plaintiff filed suit against Hereford, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, as well as bad faith, and seeking the equitable remedy of reformation. The judge granted Hereford summary judgment. The appellate panel concluded that plaintiff was entitled to partial summary judgment on its breach of contract claim and Hereford was entitled to assert the defense of exhaustion, despite that breach. However, the panel rejected Hereford’s argument that it was free to pay either verified bill and found that a remand is necessary because it is not clear from the record when plaintiff provided its services to the patient, and whether at least some of those services were provided prior to those provided by the hospital.
