Allstate New Jersey Insurance Company v. Gregorio Lajara , 433 N.J. Super. 20 ( 2013 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5684-11T4
ALLSTATE NEW JERSEY INSURANCE
COMPANY, ALLSTATE INSURANCE
COMPANY, ALLSTATE INDEMNITY
COMPANY, ALLSTATE PROPERTY APPROVED FOR PUBLICATION
AND CASUALTY INSURANCE COMPANY,
ALLSTATE NEW JERSEY PROPERTY October 9, 2013
AND CASUALTY INSURANCE COMPANY
and ENCOMPASS INSURANCE, f/k/a APPELLATE DIVISION
CONTINENTAL INSURANCE COMPANY,
and COMMERCIAL INSURANCE
COMPANY OF NEWARK, NJ,
Plaintiffs-Respondents,
v.
GREGORIO LAJARA; PEDRO GONZALEZ;
MILEYDIS T. DIAZ a/k/a MILLY
DIAZ; AWILDA D. RODRIGUEZ a/k/a
AWILDA D. GONZALEZ; KENNETH J.
VIAFORA; JOSE ORLANDO HERNANDEZ;
FRANCISCA HERNANDEZ; FRANCISCO
CABA; AQUALINA RAMOS; ASHRAF Y.
AZIR; MUHAMMAD A. SHAMSHAIR;
MICHAEL C. GOLOWSKI; ELVIA BEDOYA;
NYDIA MARTINEZ; NEREDA ZUNIGA;
ALEXANDRA GALLEGOS; BIBARS KAGHDOU,
D.C.; STEPHEN LOMANTO, D.C.; DAVID
STEPHENS, D.C.; THOMAS J. BONACUSO,
D.C.; MICHAEL CARLESIMO, D.C.;
BRYAN SIEGEL, D.C.; KEITH
LEWANDOWSKI, D.C.; WEI JU; LUCY
LIU; JIANMIN LI, a/k/a JIAN MIN
LI; SHAN S. NAGENDRA, M.D.;
ALEKSANDR LEVIN, M.D.; MANOJ D.
PATHARKAR, M.D.; ALFRED REZK
TAWADROUS, M.D.; HOWARD KESSLER,
M.D.; NATALIO DAMIEN, M.D.; DAVID
WALKER, ESQ.; MEDICO MANAGEMENT
CO., INC.; UNION COLLECTIONS, LLC;
PLAINFIELD MEDICAL MANAGEMENT,
INC.; SPINAL ADJUSTMENT CENTER,
P.C. f/k/a SPINAL ADJUSTMENT
CENTER, INC.; RAHWAY SPINAL INJURY
P.C. f/k/a RAHWAY SPINAL CENTER
CORP; ADVANCED SPINAL CARE, P.C.;
MILLENNIUM TOTAL HEALTH, P.C.;
ALEVE CHIROPRACTIC, P.C.; IN-LINE
CHIROPRACTIC, P.C.; BAYVIEW HEALTH,
P.C. a/k/a BAYVIEW HEALTH SERVICE,
P.C.; BOUND BROOK CHIROPRACTIC,
P.C.; NEW WAVE CHIROPRACTIC, P.C.;
ABSOLUTE CHIROPRACTIC, P.C.; BACK
PAIN P.C.; AM PAIN CARE, P.C.;
ACUPUNCTURE ACADEMY P.C.; TCM
ACUPUNCTURE, P.C.; AMERICAN
ACUPUNCTURE ACADEMY, P.C.; CONVERY
MEDICAL GROUP, P.C.; RARITAN PAIN
MANAGEMENT AND REHAB CENTER, P.C.;
ASBURY MEDICAL AND REHABILITATION
P.C.; PAIN MANAGEMENT ASSOCIATES
OF CENTRAL JERSEY, P.A.; BEST
HEALTH MEDICAL, P.C.; PERTH AMBOY
HEALTH CARE, LLC d/b/a "PERTH
AMBOY DIAGNOSTIC IMAGING"; LIBERTY
SUPPLIES, L.L.C.; K-MED SERVICES,
INC.; PRESTIGE MEDICAL SUPPLIES,
LLC; THERAPEUTIC DEVICES, INC.,
Defendants-Respondents,
and
A.P. DIAGNOSTIC IMAGING, INC. and
DR. HARSHAD PATEL,
Defendants-Appellants.
___________________________________
Argued April 30, 2013 – Decided October 9, 2013
Before Judges Messano, Lihotz and Ostrer.
2 A-5684-11T4
On appeal from the Superior Court of New
Jersey, Law Division, Union County, Docket
No. L-4091-08.
Carl A. Salisbury (Kilpatrick Townsend &
Stockton, LLP) argued the cause for
appellants.
Thomas O. Mulvihill argued the cause for
respondents Allstate New Jersey Insurance
Company, Allstate Insurance Company,
Allstate Indemnity Company, Allstate
Property and Casualty Insurance Company,
Allstate New Jersey Property and Casualty
Insurance Company and Encompass Insurance,
f/k/a Continental Insurance Company, and
Commercial Insurance Company of Newark, NJ
(Pringle Quinn Anzano, P.C., attorneys; Mr.
Mulvihill, on the brief).
The Law Office of Jeffrey Randolph, LLC,
attorneys for respondents Plainfield Medical
Management, Pedro Gonzalez and Awilda D.
Rodriguez a/k/a Awilda D. Gonzalez, join in
the briefs of appellants.
Bubb Grogan & Cocca, LLP, attorneys for
respondents Shan Nagendra, M.D., Convery
Medical Group, P.C., and Raritan Pain
Management and Rehab Center, P.C., join in
the briefs of appellants.
Archer & Greiner, P.C., attorneys for
respondents Dr. Manoj Patharkar and Pain
Management Associates of Central Jersey,
P.A., join in the briefs of appellants.
The opinion of the court was delivered by
OSTRER, J.A.D.
On leave granted, defendants appeal from the trial court's
order (1) granting plaintiffs' motion to withdraw their jury
3 A-5684-11T4
demand in their action under the Insurance Fraud Prevention Act
(Act), N.J.S.A. 17:33A-1 to -30; and (2) striking defendants'
jury demand. The Act is silent on the right to trial by jury.
We therefore must determine whether the Act implied that right,
or whether the Constitution's right to trial by jury, N.J.
Const. art. I, par. 9, encompasses a private action under the
Act.
After considering the Act's plain language, its legislative
history, and the legislative intent, and applying well-settled
principles of statutory construction, we conclude the Act does
not create a right to a jury trial. Also, as the equitable
nature of the statutorily created right to relief was unknown at
common law before adoption of the State Constitution, we
conclude the Constitution does not guarantee a right to a trial
by jury. We therefore affirm the trial court's order.
I.
Given the purely legal nature of the question before us,
the pertinent facts may be briefly stated. Plaintiffs alleged
they paid $8.2 million in personal injury protection (PIP)
benefits under the Unsatisfied Claim and Judgment Fund Law
(UCJFL), N.J.S.A. 39:6A-1 to -91, as a result of violations of
the Act. The forty-two count complaint included as defendants
individual physicians and chiropractors; medical and
4 A-5684-11T4
chiropractic practices; management companies of medical
practices; medical equipment companies; attorneys; and
unlicensed individuals.
Among their allegations, plaintiffs asserted that Gregorio
Lajara, who was neither a licensed physician nor a chiropractor,
directed a scheme to defraud plaintiffs. He allegedly did so,
in part, by controlling and effectively owning chiropractic
facilities, which plaintiffs alleged violated the law.
Plaintiffs alleged various defendants performed services in
violation of professional regulations; billed for various
services performed by unlicensed persons; engaged in unlawful
fee-splitting; knowingly and intentionally concealed facts
concerning services provided; billed for services and equipment
not actually provided, or medically unreasonable or unnecessary;
failed to charge co-pays; paid persons who intentionally caused
accidents in order to generate fraudulent bills; and paid
kickbacks to attorneys who referred clients.
The complaint sought a declaratory judgment that plaintiffs
were not obligated to pay PIP benefits to defendants;
disgorgement of sums already paid to defendants; imposition of a
constructive trust and equitable lien on defendants' assets
until they disgorged the sums sought; and damages allowed under
the Act.
5 A-5684-11T4
Plaintiffs initially demanded a jury trial. However, after
answers were filed, plaintiffs moved for leave to withdraw their
prior demand. Defendants opposed the motion and demanded a jury
trial, some of them for the first time, having omitted the
demand from their answers. The Commissioner of Banking and
Insurance, who had earlier intervened in the suit, moved to
strike the jury demand as it related to the Commissioner's
claims. See N.J.S.A. 17:33A-7d (authorizing the Commissioner to
join in an insurance company's private action, in order to
recover civil penalties authorized by N.J.S.A. 17:33A-5).
Judge Kenneth J. Grispin granted plaintiffs' motion, and
struck defendants' jury demand. Defendants sought leave to
appeal, which another panel granted.
Renewing arguments they presented to the trial court,
plaintiffs urge us to find an implied jury trial right under the
Act, just as the court found an implied jury trial right under
the analogous Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -109,
in Zorba Contractors, Inc. v. Housing Authority of Newark, 362
N.J. Super. 124 (App. Div. 2003). In response, plaintiffs
distinguish Zorba, supra, based on differences between the
relief available under the CFA and the Act. They also argue
that the inherently equitable nature of relief authorized by the
Act compels a non-jury trial. They rely on our prior holding
6 A-5684-11T4
that actions under the Act by the Commissioner, as opposed to
private parties, are not subject to a jury trial right, given
the restitutionary, and hence, equitable nature of relief
available to the Commissioner. State v. Sailor, 355 N.J. Super.
315, 323-24 (App. Div. 2001).
II.
A.
We apply a de novo standard of review to the trial court's
determination that there does not exist a right to trial by
jury. See id. at 320 (citing Manalapan Realty, L.P. v. Twp.
Comm. of Manalapan, 140 N.J. 366 (1995)).
At the outset we note that those defendants who omitted a
jury demand in their answers did not waive their right to a jury
trial. In instances where a jury trial is permitted, a
defendant is entitled to rely on a plaintiff's demand,
notwithstanding that, generally, a party who neglects to timely
demand a jury waives his right to do so. R. 4:35-1(c). Once
one party demands a jury trial on all issues, "the waiver
provisions of subsection c of the rule [4:35-1] cannot be the
basis for denying a jury trial to a party who has not demanded
such a trial." 500 Columbia Tpke. Assocs. v. Haselmann, 275
N.J. Super. 166, 170 (App. Div. 1994). Consequently, trial by
jury could be "dispensed with only by consent of all the parties
7 A-5684-11T4
or their counsel," including that of plaintiff. Ibid. See also
Pressler & Verniero, Current N.J. Court Rules, comment 1.1 on R.
4:35-1 (2014) ("Once demanded by any party, a trial by jury can
be dispensed with only by consent of all parties. Paragraph (d)
expressly so provides."). On the other hand, a court may grant
a party's late request to withdraw a jury demand over an
adversary's opposition if the court finds there exists no
statutory or constitutional right to a jury trial.
B.
Turning to the issue before us, we start with the
undisputed premise that the Act does not expressly grant a jury
trial right. In that respect, it is distinct from numerous
enactments in which the Legislature has both created a new
statutory cause of action, and expressly provided a right to
trial by jury.
When conferring a right to a jury trial for
newly-created statutory causes of action,
the Legislature has a history of doing so by
express provision. See, e.g., N.J.S.A.
2A:15-56 (labor dispute injunctions);
N.J.S.A. 2A:62-4, 2A:62-18 (quiet-title
actions); N.J.S.A. 2A:62-21 (actions to
determine the existence and validity of
covenants, conditions, agreements, or
restrictions in deeds to real estate);
N.J.S.A. 2A:62-24 (actions to determine
title to riparian lands and lands under
water); N.J.S.A. 3B:12-24 (civil proceedings
to determine mental incompetency); N.J.S.A.
40:189-3 (actions for abatement of
nuisances); and N.J.S.A. 45:14B-42 (actions
8 A-5684-11T4
regarding confidentiality of patient
information by psychologists); see also
State v. Tenriero, 183 N.J. Super. 519, 521
(Law Div. 1981) (plaintiff denied a right to
jury trial in action brought under statute
that provided Superior Court with
jurisdiction over gambling offenses: "[h]ad
the Legislature intended otherwise, it would
have made provision in the same manner as
for the disorderly persons obscenity
offense.")
[Shaner v. Horizon Bancorp., 116 N.J. 433,
443 (1989).]
At this point, we review the plain language of the Act as
it will weigh heavily in determining whether the Act impliedly
requires a jury trial, or creates a cause of action and right to
relief subject to the constitutional right to trial by jury.
The Act "interdicts a broad range of fraudulent conduct."
Liberty Mut. Ins. Co. v. Land, 186 N.J. 163, 172 (2006).
However, "the Legislature . . . did not codify common law fraud
but rather supplemented that action because, standing alone, it
had proven to be insufficient in combating and deterring
insurance fraud." Id. at 174. The Act does not require proof
of a showing that the maker of a false statement intended that
the other party rely, the other party did reasonably rely, and
suffered damages. See id. at 174-75 (noting that the elements
of legal fraud are: a material representation of a present or
past fact, made knowing it is false, and intending the other
party rely on it, resulting in the party's reasonable reliance
9 A-5684-11T4
and resulting damages). Rather, a violation of the Act is more
akin to equitable fraud, which does not require proof of
knowledge of falsity or "an intention to obtain an undue
advantage." See Jewish Ctr. of Sussex Cnty. v. Whale, 86 N.J.
619, 624-25 (1981).1 However, even equitable fraud requires
proof of detrimental reliance. Ibid. The Act does not.
It is a violation if a person or practitioner:
(1) Presents or causes to be presented
any written or oral statement as part of, or
in support of or opposition to, a claim for
payment or other benefit pursuant to an
insurance policy or the [UCJFL], P.L.1952,
c. 174 (C.39:6-61 et seq.), knowing that the
statement contains any false or misleading
information concerning any fact or thing
material to the claim; or
(2) Prepares or makes any written or
oral statement that is intended to be
presented to any insurance company, the
[UCJF] or any claimant thereof in connection
with, or in support of or opposition to any
claim for payment or other benefit pursuant
to an insurance policy or the [UCJFL],
P.L.1952, c. 174 (C.39:6-61 et seq.),
knowing that the statement contains any
false or misleading information concerning
any fact or thing material to the claim[.]
. . . .
(4) Prepares or makes any written or
oral statement, intended to be presented to
1
Negligent misrepresentation also requires proof of detrimental
reliance and resulting damages. Kaufman v. i-Stat Corp., 165
N.J. 94, 109-10 (2000).
10 A-5684-11T4
an insurance company or producer for the
purpose of obtaining:
. . . .
(b) an insurance policy, knowing that
the statement contains any false or
misleading information concerning any fact
or thing material to an insurance
application or contract[.]
[N.J.S.A. 17:33A-4a(1), (2), and (4).]
A violation of paragraphs (1), (2), or (4)(b) may occur without
any intent the insurer rely, or proof the insurer reasonably
relied and was damaged.
The law also penalizes the concealment or knowing failure
"to disclose the occurrence of an event which affects any
person's . . . right or entitlement to [an] insurance benefit or
payment" or the amount thereof. N.J.S.A. 17:33A-4a(3). This
also need not rise to legal fraud. See Strawn v. Canuso, 271
N.J. Super. 88, 105 (App. Div. 1994) (stating that fraud by
concealment is "[n]ondisclosure of a material fact where there
is a duty to speak."), aff'd, 140 N.J. 45, 49 (1995); Berman v.
Gurwicz, 189 N.J. Super. 89, 93-94 (Ch. Div. 1981) (stating that
claim for fraud by concealment lies where there is duty to
disclose to correct a previous statement or where there is a
special relationship), aff'd o.b., 189 N.J. Super. 49, 50 (App.
Div.), certif. denied, 94 N.J. 549 (1983).
11 A-5684-11T4
The statute also makes it a violation to misstate a
person's principal place of residence for the purpose of
obtaining automobile insurance. N.J.S.A. 17:33A-4a(4)(a).
Although the violator must intentionally present the statement
to the insurer, the Act does not require proof that the person
knew the statement was false. Ibid. The Act also makes it a
violation for a person to assist or effectively facilitate
another person's violation of the Act. N.J.S.A. 17:33A-4b, and
-4d. It is also a violation for a person or practitioner to
knowingly benefit from the proceeds of another person's
violation of the Act. N.J.S.A. 17:33A-4c.
The Act as originally adopted authorized the Commissioner
to bring a civil action to recover penalties for each violation
of the Act, to be determined by the court subject to the Act's
monetary limits.2 L. 1983, c. 320, § 5 (codified at N.J.S.A.
17:33A-5); see also Merin v. Maglacki, 126 N.J. 430, 440 (1992)
(holding that the penalty may be imposed for each false
2
The amount per civil penalty originally was not to exceed
$2,500 for the first violation, $5,000 for the second violation,
and $10,000 for each subsequent violation. L. 1983, c. 320, § 5
(codified at N.J.S.A. 17:33A-5a). In 1987, the Legislature
increased the penalties to their present amounts of $5,000,
$10,000, and $15,000, respectively. L. 1987, c. 358, § 5
(codified as amended at N.J.S.A. 17:33A-5a). The penalties now
apply both to administrative actions and civil proceedings
brought by the Commissioner. L. 1997, c. 151, § 5 (codified as
amended at N.J.S.A. 17:33A-5b, and -5c).
12 A-5684-11T4
statement, as distinct from each false claim). The statute also
empowered the court to assess court costs and reasonable
attorney's fees. L. 1983, c. 320, § 5 (codified at N.J.S.A.
17:33A-5).
In 1997, the Legislature broadened the Commissioner's
powers by authorizing him or her, in an administrative
proceeding, to determine whether there was a violation, and levy
penalties. Significantly, the Commissioner is also empowered
administratively to "order restitution to any insurance company
or other person who has suffered a loss as a result of a
violation." L. 1997, c. 151, § 4 (codified as amended at
N.J.S.A. 17:33A-5c). A respondent may seek a hearing before the
Office of Administrative Law (OAL). Ibid. The Commissioner may
then seek enforcement in a summary proceeding pursuant to the
penalty enforcement law, N.J.S.A. 2A:58-10 to -12. Ibid.
The Act also authorizes insurers "damaged as the result of
a violation" to bring a civil action "to recover compensatory
damages." N.J.S.A. 17:33A-7a. The Act, as amended in 1997,
states that such damages "shall include reasonable investigation
expenses, costs of suit and attorneys fees." L. 1997, c. 151, §
5 (codified as amended at N.J.S.A. 17:33A-7a). As originally
enacted in 1983, the law stated damages "may include" such
elements. L. 1983, c. 320, § 7. Now, damages shall be trebled
13 A-5684-11T4
"if the court determines that the defendant has engaged in a
pattern of violating this act." N.J.S.A. 17:33A-7b. "Pattern"
was not defined in the Act until 1997; the word now means "five
or more related violations" where "related" means the violations
involve the "same victim" or "same or similar actions" by the
violator. L. 1997, c. 151, § 2 (codified as amended at N.J.S.A.
17:33A-3).
An insurer must notify the Commissioner when it brings a
civil action. The Commissioner may then intervene and seek
penalties and cost recovery. N.J.S.A. 17:33A-7d. However,
there is no explicit provision allowing an insurer to intervene
in an administrative proceeding brought by the Commissioner,
notwithstanding the Commissioner's power to seek restitution of
the insurer's losses.
The Act does not expressly address the right to a jury
trial in civil actions brought by the Commissioner or an
insurer. However, as noted, the Act permits the Commissioner to
administratively levy a penalty and order restitution, and
litigate such an order before the OAL if the order is contested.
Likewise, the Act expressly states that a court shall determine
whether a person or practitioner has engaged in a pattern of
violating the act. N.J.S.A. 17:33A-7b.
14 A-5684-11T4
C.
Defendants ask us to find that the Act implies a right to a
jury trial. Alternatively, we must consider whether, even
absent any statutorily implied right, the Constitution
guarantees a jury trial. We consider the statutory question
first, given our reluctance to address constitutional questions
unless necessary. See O'Keefe v. Passaic Valley Water Comm'n,
132 N.J. 234, 240 (1993). Based on well-settled rules of
statutory construction, we decline to find by implication a
right that does not exist in the statute's plain language, nor
is compelled by the legislative history or the intent of the
statute.
In interpreting a statute, "our overriding goal must be to
determine the Legislature's intent." Jersey Cent. Power & Light
Co. v. Melcar Util. Co., 212 N.J. 576, 586 (2013) (JCP&L)
(internal quotation marks and citation omitted). We begin with
the statute's plain language, and look beyond that only if the
Legislature's intent cannot be derived therefrom. Id. at 587
(citations omitted). "We turn to extrinsic interpretative aids
in search of legislative intent when the statute is ambiguous,
leading to more than one plausible interpretation; it leads to
an absurd result inconsistent with any legitimate public policy
objective; or it is at direct odds with an overall statutory
15 A-5684-11T4
scheme." Murray v. Plainfield Rescue Squad, 210 N.J. 581, 592
(2012) (citing DiProspero v. Penn, 183 N.J. 477, 492-93 (2005)).
"[A] court may not 'presume that the Legislature intended
something other than that expressed by way of the plain
language." JCP&L, supra, 212 N.J. at 586 (quoting O'Connell v.
State, 171 N.J. 484, 488 (2002)). We may not "rewrite a
plainly-written enactment[.]" O'Connell, supra, 171 N.J. at
488. As noted, the Legislature has demonstrated the ability to
assure a right to a jury trial in numerous statutes; yet it was
silent on the subject in the Act. "When the Legislature has
carefully employed a term in one place and excluded it in
another, it should not be implied where excluded." In re Plan
for Abolition of Council on Affordable Hous., 214 N.J. 444, 470
(2013) (internal quotation marks and citation omitted). We may
not "engraft onto [a] statute a[] . . . provision that the
Legislature pointedly omitted. . . . We are charged with
interpreting a statute; we have been given no commission to
rewrite one." Murray, supra, 210 N.J. at 596.
Although our courts have sometimes found implied provisions
— such as implied repealers, or implied rights of action — we
have been reluctant to do so. See, e.g., R.J. Gaydos Ins.
Agency, Inc. v. Nat'l Consumer Ins. Co., 168 N.J. 255, 271
(2001) ("New Jersey courts have been reluctant to infer a
16 A-5684-11T4
statutory private right of action where the Legislature has not
expressly provided for such action."); In re Comm'r of Ins.'s
Issuance of Orders, 137 N.J. 93, 99 (1994) (stating "there is a
strong presumption in the law against implied repealers and
every reasonable construction should be applied to avoid such a
finding") (citation omitted).
The Legislature is empowered to confer a right to a jury
trial where it otherwise would be unavailable. JCP&L, supra,
212 N.J. at 590. However, the JCP&L Court quoted with approval
our statement, "'When the Legislature wants to provide for the
right to a jury trial, it has done so by express provision.'"
Ibid. (quoting Sailor, supra, 355 N.J. Super. at 322). "Thus,
in Sailor, it was observed that 'since 1951, the right to a jury
trial for newly created statutory causes of action has been
denied unless the statute so provides.'" Ibid. (quoting Sailor,
supra, 355 N.J. Super. at 320). As the Shaner Court recognized,
and the JCP&L Court reaffirmed, in the absence of an express
provision, our courts have consistently denied a right to a jury
trial for newly created statutory causes of action.3 The Court
3
See Shaner, supra, 116 N.J. at 448 (citing N.J. Sports &
Exposition Auth. v. Del Tufo, 230 N.J. Super. 616 (App. Div.
1989) (affirming denial of jury trial right in stockholders'
action to determine fair value of their shares); Manetti v.
Prudential Prop. & Cas. Ins. Co., 196 N.J. Super. 317, 320–21
(App. Div. 1984) (denying jury trial right involving
(continued)
17 A-5684-11T4
held that the Legislature's silence is "highly indicative" of an
intent not to confer a jury trial right. Shaner, supra, 116
N.J. at 443. With respect to civil actions by the Commissioner
under the Act, we held "the lack of provision authorizing a jury
trial under the Act means that the Legislature did not intend to
create such a right." Sailor, supra, 355 N.J. Super. at 322.
The Constitution does not guarantee a trial by jury for a
statutory claim that was unknown to the common law. See Shaner,
supra, 116 N.J. at 447. In such cases, when the Legislature
statutorily guarantees a trial by jury, it adopts a right in
derogation of the common law. We generally strictly construe
statutes in derogation of the common law. See, e.g., White v.
Twp. of N. Bergen, 77 N.J. 538, 559 (1978) ("A strict
construction of a statute in derogation of the common law
(continued)
statutorily-created PIP benefits); Van Dissel v. Jersey Cent.
Power & Light Co., 181 N.J. Super. 516 (App. Div. 1981) (finding
no jury trial right in inverse condemnation action), certif.
denied, 89 N.J. 409 (1982), cert. granted and vacated on other
grounds, 465 U.S. 1001, 104 S. Ct. 989, 79 L. Ed. 2d 224 (1984);
Peterson v. Albano, 158 N.J. Super. 503 (App. Div.) (denying
jury trial right in summary dispossess action), certif. denied,
78 N.J. 337 (1978); State v. Tenriero, 183 N.J. Super. 519 (Law
Div. 1981) (finding no right to jury trial for gambling offenses
under statute giving jurisdiction to Superior Court); Quinchia
v. Waddington, 166 N.J. Super. 247, 249 (Law Div. 1979) (finding
no jury trial right in action to recover from Unsatisfied Claim
and Judgment Fund); Kugler v. Banner Pontiac–Buick, Opel, Inc.,
120 N.J. Super. 572, 582 (Ch. Div. 1972) (finding no right to
jury trial for CFA action by Attorney General).
18 A-5684-11T4
requires that the legislative intent be clearly and plainly
expressed in order to effectuate a change."). Therefore, we
should be reluctant to find an implied right to a jury trial, if
the right is not already protected by the Constitution.4
In Shaner, the Court also engaged in a two-step analysis,
first finding that no right to a jury trial was implied by the
Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42, nor
was the right grounded in the Constitution. Shaner, supra, 116
N.J. at 455.5 With respect to an implied right, the Court
examined the evil that the LAD was intended to address; the
structure of the statute, which authorized administrative and
judicial actions by both the State and private litigants; and
the remedies available to different parties in the different
forums. The Court concluded that the generally equitable nature
of the relief authorized was inconsistent with a finding of an
implied right to a jury trial. Id. at 445-46.
4
We recognize that the IFPA is also a remedial statute, which we
liberally construe. Land, supra, 186 N.J. at 173 (stating "we
must construe the Act's provisions liberally to accomplish the
Legislature's broad remedial goals."). However, as we discuss
below, a jury trial mandate would not necessarily further the
remedial goals of the Act. Therefore, regarding the jury trial
issue, the limiting canon of statutory interpretation, dealing
with statutes in derogation of the common law, would prevail
over the expansive canon, addressing remedial statutes.
5
The Legislature subsequently amended the LAD to provide a right
to a jury trial. L. 1990, c. 12, § 2 (codified as amended at
N.J.S.A. 10:5-13).
19 A-5684-11T4
Following Shaner, supra, we found no right to a jury trial
in Sailor. In Sailor, supra, the Commissioner brought a civil
action pursuant to N.J.S.A. 17:33A-5a, seeking civil penalties,
costs, fees, and restitution of $13,000 to the affected insurer,
Allstate.6 We relied on the Legislature's silence on the issue
of a jury trial right. We noted the Legislature knows how to
require a jury trial, but did not expressly require one in the
Act. 355 N.J. Super. at 322. We concluded on that basis there
was no statutory right. Ibid.Applying these principles, we conclude there is no
statutorily implied right to a jury trial in an insurer's action
under N.J.S.A. 17:33A-7, where none is expressly provided.
Although the Legislature's silence is not dispositive, it is a
significant factor weighing against the finding of a statutorily
implied right. As noted above, we should be reluctant to infer
statutory provisions of law when the Legislature has not seen
fit to expressly include them.
The structure of the Act, and the remedies provided also do
not clearly compel the conclusion that the Legislature
6
The court did not address the basis for the Commissioner
seeking restitution in a civil action, as the Act appears to
authorize the Commissioner to seek only penalties, court costs
and attorney's fees in a civil action; and to authorize pursuit
of restitution only in an administrative order. Compare
N.J.S.A. 17:33A-5b (civil actions), with N.J.S.A. 17:33A-5c
(administrative orders).
20 A-5684-11T4
contemplated jury trials. First, the Act has expressly
authorized, since 1997, the Commissioner's resort to an
administrative forum where jury trials are precluded. We
recognize defendants' argument that the implied jury trial right
pertains only to an insurer's action for damages. However, the
Act permits the Commissioner to issue restitutionary orders — to
restore any losses to an insurer, which may only be challenged
before the OAL, and then in a summary proceeding, which
precludes a jury.
We also attach significance to the Act's explicit
designation of the court as the finder of fact regarding the
presence of a pattern of violations, a prerequisite to imposing
treble damages. Had the Legislature intended parties to be
entitled to a jury, it would not have carved out this critical
fact issue for the court's determination.
Although we discuss at greater length in our constitutional
analysis the nature of the cause of action and relief, we reject
defendants' argument that the Legislature must have contemplated
jury trials because an insurer's civil action under the Act is
grounded in legal fraud-like claims, and an insurer seeks
monetary compensatory damages. Defendants argue these are
analogous to a claim at common law of legal fraud for which a
jury right attaches. Suffice it to say here the analogy is too
21 A-5684-11T4
weak to support a finding of an implied statutory right. As we
discussed, a violation may fall far short of legal fraud. Also,
although an insurer is entitled to seek "compensatory damages,"
the Commissioner may seek "restitution" of an insurer's losses.
A general purpose of the statute is also expressly
restitutionary in nature. N.J.S.A. 17:33A-2. Restitution is an
inherently equitable form of relief. Sailor, supra, 355 N.J.
Super. at 323-24 (citing Wanaque Borough Sewerage Auth. v. Twp.
of W. Milford, 144 N.J. 564, 575 (1996)).
Nor does the broader intent of the Act, or its Legislative
history compel a finding of an implied jury trial right. The
Act is expressly intended to "confront aggressively the problem
of insurance fraud . . . by facilitating the detection of
insurance fraud, eliminating the occurrence of such fraud
through the development of fraud prevention programs, requiring
the restitution of fraudulently obtained insurance benefits, and
reducing the amount of premium dollars used to pay fraudulent
claims." N.J.S.A. 17:33A-2. The Legislature's apparent goal to
create a swift and cost-effective remedy is evident in the 1997
amendments, which authorized non-jury administrative actions.
Although trial by jury holds a position of high regard in our
system of justice, Lyn-Anna Props. v. Harborview Dev. Corp., 145
N.J. 313, 332-33 (1996), speed and efficiency are usually not
22 A-5684-11T4
included among its many strengths. See Shaner, supra, 116 N.J.
at 442 (noting the "attendant delays" of jury trials).
Finally, we are not persuaded that Zorba compels a
different result. We need not address whether we agree with the
panel's statutory analysis of the CFA. Although the court in
Zorba expressly avoided a constitutional analysis, finding
instead a jury right was implied by that statute, the Supreme
Court recently re-interpreted the holding as based on the
constitutional right to a jury. In JCP&L, supra, the Court
noted that the panel in Zorba "inferred that a jury trial right
should attach." 212 N.J. at 592 (citing Zorba, supra, 362 N.J.
Super. at 137). However, after describing the panel's analysis
of the bases for, and nature of, CFA relief, the Court
characterized the holding as constitutionally grounded. "For
those reasons the Appellate Division concluded that a trial by
jury constitutionally was required for this common-law fraud-
based cause of action." JCP&L, supra, 212 N.J. at 593 (emphasis
added) (citing Zorba, supra, 362 N.J. Super. at 140).
We also decline to apply Zorba because of distinctions
between the CFA and the Act. The Zorba panel likened treble
damages, available under the CFA, to punitive damages; they,
along with compensatory damages and attorney's fees were the
"hallmark of a legal action." Zorba, supra, 362 N.J. Super. at
23 A-5684-11T4
138. However, unlike the Act, the CFA does not assign to the
court the task of finding the predicate fact for awarding treble
damages. Compare N.J.S.A. 56:8-19 (stating, under the CFA, the
court shall award threefold the compensatory damages sustained,
without stating who shall determine the quantum of damages),
with N.J.S.A. 17:33A-7b (stating, under the Act, the court shall
determine whether there is a pattern of violations, and then
shall award treble the damages sustained, which includes
investigative costs and attorney's fees).
Moreover, the Zorba panel did not address the tension
between inferring a jury trial right, and authorizing the
administrative award of restitution. Compare N.J.S.A. 56:8-15
(stating Attorney General may seek restoration to a "person in
interest" of "moneys or property . . . acquired by means of an
unlawful practice"), with N.J.S.A. 17:33A-5c (stating
Commissioner may seek restitution of insurer's losses).
In sum, we find no statutorily implied right to a jury
trial in the Act.
D.
We therefore consider whether — despite the legislative
silence — the right to a jury is guaranteed by the Constitution,
which states that "right of trial by jury shall remain
inviolate." N.J. Const., art I, ¶ 9. "It is well-established
24 A-5684-11T4
that this protection applies to civil cases only where the right
to a jury trial existed at common law and does not normally
apply to cases in equity." JCP&L, supra, 212 N.J. at 589
(citation omitted). "'Only those actions that triggered the
right of a jury trial that predated our State Constitutions, and
those that were created anew with enactment of New Jersey's 1776
Constitution, the 1844 Constitution, or the 1947 Constitution
serve as the basis for that constitutional right today.'" Ibid.
(quoting Ins. Co. of N. Am. v. Anthony Amadei Sand & Gravel Co.,
162 N.J. 168, 175-76 (1999)). "Generally, the New Jersey
Constitution protects the right of trial by jury in legal, but
not equitable, actions." Ins. Co. of N. Am., supra, 162 N.J. at
176.
In determining whether a right to a jury trial attaches to
a statutory action, a court must apply a historical analysis.
"When determining if a jury trial is required under the State
Constitution, both the historical basis of the cause of action
and the relief sought must be considered. The remedy sought
'remains the most persuasive factor.'" JCP&L, supra, 212 N.J.
at 589 (citation omitted) (quoting Weinisch v. Sawyer, 123 N.J.
333, 344 (1991)). However, the mere availability of monetary
relief is not decisive. Shaner, supra, 116 N.J. at 451. The
Court has considered whether, despite the availability of
25 A-5684-11T4
compensatory monetary damages, other forms of available relief
are equitable in nature. Weinisch, supra, 123 N.J. at 344-45;
Shaner, supra, 116 N.J. at 453 (noting forms of relief under LAD
are "predominantly equitable in nature").
The Court may also consider whether the statute is
"distinctively oriented to the achievement of . . . broad
objectives" that go beyond the remedy of an individual wrong.
Shaner, supra, 116 N.J. at 453. The Court has "eschewed a focus
solely on the remedy sought and [has] espoused a more eclectic
view of the standards that serve to characterize the essential
nature of a cause of action in giving meaning and scope to the
right to a jury trial" under the Constitution. Id. at 450.
The Court "consider[s] the nature of the underlying
controversy as well as the remedial relief sought in determining
whether the cause of action has been historically primarily
equitable or legal in nature." Id. at 450-51. "[W]here actions
created by statute have distinctive features with respect to
substantive and procedural standards that would render them
virtually unknown to the common law, there is no right to jury
trial." Shaner, supra, 116 N.J. at 451.
Consistent with this approach, we have held there is no
constitutional jury trial right under the New Jersey Antitrust
Act, N.J.S.A. 56:9-1 to -19, although both money damages and
26 A-5684-11T4
injunctive relief are available remedies. Boardwalk Props.,
Inc. v. BPHC Acquisition, Inc., 253 N.J. Super. 515, 529-30
(App. Div. 1991). Viewing the remedies available to the
Attorney General, together with those available to private
litigants, we concluded the remedies were "predominantly
equitable." Id. at 530. We also gave weight to the broad
purpose of the statute. "While a private litigant may
financially gain from a suit under the statute, the overriding
purpose of the Act is to advance the public policy in favor of
competition." Ibid. Finally, we noted the statute's
"'distinctive features . . . virtually unknown to the common
law[.]'" Ibid. (quoting Shaner, supra, 116 N.J. at 451).
Applying these principles, we find no constitutional right
to a trial by jury under the Act. Focusing first on the
individual relief, an insurer-plaintiff may recover not only
money damages if incurred, but also attorney's fees and costs of
investigation, regardless of whether it suffered damage. The
recovery of attorney's fees and costs is equitable in nature.
See Shaner, supra, 116 N.J. at 451 ("[E]ven though plaintiff
contends that he seeks only monetary relief, he claims
attorney's fees, a distinctive statutory and equitable form of
compensation.").
27 A-5684-11T4
Moreover, the monetary relief available to an insurer —
although denominated as compensatory damages in N.J.S.A. 17:33A-
7a — is in the nature of restitution. Plaintiffs seek the
refund of wrongfully paid PIP benefits; they seek no further
consequential damages. As we have noted, restitution is an
equitable remedy. See Shaner, supra, 116 N.J. at 444 n.1
(stating that "not all monetary relief is legal relief but may
be considered equitable relief if it is discretionary and
considered a form of restitution rather than damages" (citation
omitted)); Ramirez v. Autosport, 88 N.J. 277, 288 (1982)
(referring to the "equitable doctrine of restitution the purpose
of which is to restore plaintiff to as good a position as he
occupied before the contract"); Sailor, supra, 355 N.J. Super.
at 323; Kugler, supra, 120 N.J. Super. at 581 (noting that
remedies under CFA "are injunction, restitution and appointment
of a receiver, all clearly equitable in nature").
The nature of the cause of action is significantly
different from legal fraud. A private action under the Act —
which does not require proof of scienter — is more akin to
equitable fraud, to which no jury trial right attaches. See
Weintraub v. Krobatsch, 64 N.J. 445, 455 (1974) (stating that
claim seeking rescission based on equitable fraud is for the
trial judge, not a jury). However, even elements of equitable
28 A-5684-11T4
fraud — proof of reasonable reliance and damage — are jettisoned
by the Act. In sum, the cause of action has "'distinctive
features . . . virtually unknown to the common law[.]" Shaner,
supra, 116 N.J. at 451.
The Act's broad public policy objectives also support our
conclusion. The Act enlists insurers in the fight against
insurance fraud. The Act requires insurers to develop plans to
combat insurance fraud and threatens insurers with sanctions if
they do not comply. N.J.S.A. 17:33A-15c. The Legislature was
motivated in significant part by the goal of controlling the
cost of insurance for insurance consumers generally. The
Legislature concluded that undeserved and wrongfully obtained
insurance or benefits imposed a significant cost upon insurers
which they passed on to other consumers in their rate-setting
process. N.J.S.A. 17:33A-2. Like the broad public policy goals
of the LAD and the Antitrust Act, the Act's general purpose to
combat fraud and control insurance rates supports the conclusion
that defendants have no constitutional right to a jury trial.
In sum, we discern no constitutional right to a trial by
jury for private claims under the Act.
Affirmed.
29 A-5684-11T4