In re Proceedings By the Comm'r Banking
| Decision Date | 22 February 2019 |
| Docket Number | DOCKET NO. A-2223-17T2 |
| Parties | IN THE MATTER OF PROCEEDINGS BY THE COMMISSIONER OF BANKING AND INSURANCE, STATE OF NEW JERSEY TO FINE CHARLES BOAS PURSUANT TO THE NEW JERSEY INSURANCE FRAUD PREVENTION ACT, N.J.S.A. 17:33A-1 to -30. |
| Court | New Jersey Superior Court — Appellate Division |
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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.
Before Judges Accurso, Vernoia and Moynihan.
On appeal from the New Jersey Department of Banking and Insurance.
Brach Eichler LLC, attorneys for appellant Charles Boas (Keith J. Roberts, of counsel and on the briefs; Shannon M. Carroll, on the briefs).
Gurbir S. Grewal, Attorney General, attorney for respondent Commissioner of Banking & Insurance (Melissa H. Raksa, Assistant Attorney General, of counsel; Adam B. Masef, Deputy Attorney General, on the brief).
Appellant Charles Boas appeals from New Jersey Department of Banking and Insurance (Department) orders denying his motion to vacate a final order directing that he pay $500,000 in civil and administrative penalties for his submission of 1011 fraudulent insurance claims, a $1000 statutory insurance fraud surcharge, $53,384.52 in restitution and $3459 in attorneys' fees, and denying his motion for reconsideration. Based on our review of the record in light of the applicable law, we are convinced the Department's orders are supported by substantial credible evidence and are not arbitrary, capricious or unreasonable, and affirm.
Boas is a licensed chiropractor in the State of New Jersey. In 2012, he was charged in an indictment with sixty counts of second-degree health care claims fraud, N.J.S.A. 2C:21-4.3(a), and one count of third-degree theft by deception, N.J.S.A. 2C:20-4, for allegedly billing Horizon Blue Cross Blue Shield (Horizon) for services he did not render. In April 2014, Boas pleaded guilty to third-degree health care claims fraud and was sentenced in July 2014 to a two-year term of probation.
In September 2014, the Department's Commissioner commenced an administrative proceeding by filing an order to show cause alleging Boas violated N.J.S.A. 17:33A-4(a)(1), which in pertinent part provides that a person violates the New Jersey Insurance Fraud Protection Act (Act)1 by "[p]resent[ing] or caus[ing] to be presented any written or oral statement as part of, or in support of . . . a claim for payment or other benefit pursuant to an insurance policy . . . knowing that the statement contains any false or misleading information concerning any fact or thing material to the claim."
The order to show cause alleged that from 2003 to 2007 Boas submitted claims for insurance payments to Horizon for chiropractic services he did not provide. More particularly, count one of the order to show cause alleged Boas submitted claims for payment for 498 dates of service for patient A.O.2 from 2003 through 2007 and received $28,962.40 in payments from Horizon, but A.O. had only seen Boas a total of seven to fourteen times and had not seen Boas since 2004. Count two alleged Boas submitted claims to Horizon for 531 dates of service between June 2003 and January 2007 for patient A.O., Jr., andreceived $16,759 from Horizon, but Boas provided treatment to A.O., Jr., during only two to three months in 2003. In count three, it was alleged Boas submitted seventy-two claims to Horizon for dates of service between October 2005 and July 2006 for E.M. and received $4650 in payments from Horizon, but Boas only saw E.M. for an initial consultation and never saw E.M. again. Count four alleged Boas submitted claims for providing services to E.M., Jr., on fifty-eight separate dates and received $3013.12 from Horizon, but E.M., Jr., "had never been treated by Boas."
The order to show cause set forth the statutory penalties and surcharge that could be imposed for the alleged violations, and explained Boas was liable for the Department's attorneys' fees and restitution of the sums he received from Horizon for services he did not provide. The order to show cause further explained that Boas had twenty days from his receipt of the order to show cause to request a hearing and that, if he failed to do so, his right to a hearing would be deemed waived and the allegations would be deemed admitted.
The Department served, and Boas received, the order to show cause in September 2014.3 The Department again served Boas with the order to showcause in December 2014,4 and at that time informed Boas that if he did not respond within seven days, his right to a hearing would be deemed waived and the Commissioner would dispose of the matter.
Boas failed to respond to the order to show cause. On November 16, 2015, the Commissioner rendered a final agency decision, entering a detailed final order finding Boas violated the Act by submitting at least 1011 fraudulent claims for payment to Horizon for services he did not provide. The final order also directed that Boas pay $500,000 in civil and administrative penalties pursuant to N.J.S.A. 17:33A-5 and N.J.A.C. 11:16-7.6, a $1000 statutory insurance fraud surcharge in accordance with N.J.S.A. 17:33A-5.1, $3459 in attorneys' fees pursuant to N.J.S.A. 17:33A-5(c) and N.J.A.C. 11:16-7.9(c), and $53,384.52 in restitution pursuant to N.J.S.A. 17:33A-5(c) and N.J.A.C. 11:16-7.9(c).
Four months later, in March 2016, Boas filed a motion to vacate the final order. In support of the motion, Boas submitted a certification asserting that upon his receipt of the order to show cause on September 26, 2014, he called the attorney who represented him in the criminal proceeding, forwarded the order to show cause to the attorney by telefax, and was assured by the attorney that he"would handle the matter." Boas also certified that he received the December 2014 "second notice" concerning the order to show cause and forwarded it by telefax to the attorney. Boas annexed to his certification telefax transmission receipts he claimed confirmed that he forwarded the order to show cause to the attorney in September and December 2014.
Boas also certified that, "[o]ver time, [he] received assurances from [the attorney] that [the administrative] matter would be handled." He said the attorney "eventually requested an additional retainer" to represent Boas in the matter and that he paid the attorney $2000 "to represent [him] on this matter and a matter before the Board of Chiropractic Examiners." Boas annexed to his certification a July 6, 2015 check in the amount of $2000 that is payable to the attorney.
Boas further certified that when he learned of the November 2015 final order, he "was shocked to learn that the application was unopposed" because he had the attorney's "assurances that [he] was being represented on this matter." Boas stated that he "reached out to" the attorney but "did not receive a response." According to Boas, he then retained different counsel.
Boas's certification offered the conclusory assertion that he "had a clear defense to this case." He did not identify the putative defense or provide anyfacts supporting a defense to the allegations contained in the order to show cause.
The Department opposed Boas's motion, arguing he failed to make any showing, beyond his bald assertion, that he had a meritorious defense to the allegations in the order to show cause. The Department also argued Boas did not demonstrate excusable neglect for his failure to respond to the order to show cause because the telefax reports he supplied do not identify the documents sent to the attorney and Boas did not exercise reasonable diligence by following up with his attorney after service of the order to show cause in September and December 2014 and prior to entry of the final order in November 2015. The Department claimed Boas did not provide a retainer agreement showing the attorney was retained to represent him in the Department's proceeding and there was no evidence corroborating Boas's claim the $2000 check was for his retention of the attorney for the Department's proceeding.
In a detailed and comprehensive November 7, 2016 written order, the Commissioner denied Boas's motion to vacate the final order. The Commissioner noted that although the New Jersey Court Rules do not govern administrative agency proceedings, agencies have used the principles in the Rules as a guide to determine requests for relief from final orders. In hisconsideration of Boas's motion to vacate the final order, the Commissioner utilized Rule 4:50-1 as a guide. Indeed, in support of his motion to vacate, Boas argued he was entitled to relief from the final order under the principles in Rule 4:50-1(a), which allows relief from a final order due to "mistake, inadvertence, surprise, or excusable neglect." To obtain relief from a default judgment under Rule 4:50-1(a), a moving party must demonstrate "that the neglect to answer was excusable under the circumstances and that he [or she] has a meritorious defense." Bernhardt v. Alden Café, 374 N.J. Super. 271, 277 (App. Div. 2005) (quoting Mancini v. EDS, 132 N.J. 330, 334 (1993)).
The Commissioner determined that "a default judgment will not be disturbed unless the failure to answer or otherwise appear and defend was excusable under the circumstances and unless the defendant has a meritorious defense[,] either to the cause of action itself, or . . . to the quantum of damages." The Commissioner noted that in his motion to vacate the final order, Boas did not challenge the penalties imposed and failed to present any evidence establishing a meritorious defense to the charges in the order to show cause. The Commissioner further determined Boas did not establish excusable neglect for his failure to timely respond...
To continue reading
Request your trial